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Wikinomics: Thoughts on how social networking and “the cloud” changes our society and how we make business

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Wikinomics During the summer, I read the book “Wikinomics” by Don Tapscott and Anthony Williams. The book is perfect reading for anyone who's working with interactive media and services, or if you're just interested in how social networking and “the cloud” changes our society and how we make business.

If you have time to read only one book for the remainder of this year, read this one!

In short, the book describes new means for making business and challenges "the old way". The principles of wikinomics are:

  • Being open: Transparency is a powerful new force for business success. Transparency is critical to business partnerships and for lowering transaction costs between firms. Employees of open firms have higher trust among each other and with the firm, resulting in lower cost, better innovation and increased loyalty. And when companies are open with customers, they gain trust.
  • Peering: People increasingly self-organize to design goods or services, create knowledge, or simply produce dynamic, shared experiences.
  • Sharing: Firms in electronics, biotechnology, and other fields finds maintaining and defending a proprietary system of intellectual property often cripples their ability to create value. Smart firms are creating intellectual property like a mutual found – they manage a balanced portfolio of IP assets, some protected and some shared.
  • Acting globally: On the economic front, the ongoing integration of economies into a borderless world and the surprisingly fast and furious rise of new titans such as China, India and South Korea will continue to broaden and flatten the playing field.

The book describes new ways of making business, and a new type of enterprise, “Enterprise 2.0”, is described. Some highlights:

  • In february 2007 the Swiss drug maker Novartis released all its raw data on the Internet, for free. “These discoveries are but a first step. To translate this study's provocative identification of diabetes related genes into the invention of new medicines will require a global effort”
  • P&G use ideagoras, but they also employ a network of tehnology scouts that literally scour the globe for new consumer products and technologies.
  • Lego has become a flagship for how to get your customers deeply involved in co-creating and co-innovating products.
  • Always strive to be the best at what your customer value most and partner for everything else.
  • Outsourcing is increasingly a way to gain speed, innovation and knowledge.
  • The Net Generation norms: speed, freedom, openness, innovation, mobility, authenticity and playfulness.
  • Peer production is a way of producing goods and services that relies entirely on self-organizing, communities of individuals who come together voluntarily to produce a shared outcome. Companies that will benefit from peer production needs to invest in infrastructures for collaboration while carefully considering issues such as Intellectual property diligence and indemnity.

The book is full of interesting examples of movements towards wikinomics. Some of those that were new to me are:

  • Marketocracy is a company started in 2000 by Bruce Horn and Ken Kam, with the view of isolating top stock market investors around the world in head to head competition so they can run real mutual funds around these soon to be discovered investment super-stars.
  • TakingITGlobal.org or (TIG) is a global non-governmental organization (NGO) that runs a large online community and social network for young people interested in social, political and global issues. TakingITGlobal also runs a number of offline engagement projects and partnerships that are strongly linked to or supported by its online initiatives.
  • InnoCentive is an "open innovation" company that takes research and development problems in a broad range of domains (such as Engineering, Computer Science, Math, Chemistry, Life Sciences, Physical Sciences and Business), frames them as "challenge problems", and opens them up for anyone to solve them. It gives cash awards for the best solutions to solvers who meet the challenge criteria.
  • The Fab Lab (fabrication laboratory) is a small scale workshop with the tools to make almost anything. This includes technology-enabled products generally perceived as limited to mass production. It has everything you need to make just about anything, including nifty gadgetry such as laser cutters to etch out 2D and 3D structures, digital carving tools for making circuit boards and other precision parts, and a suite of electronic components and programming tools for constructing cheap microcontrollers.

Some figures and thoughts that I found interesting:

  • During the worst natural disaster, the hurricane Katrina, people organized a project for finding information on their beloved, (the People Finder project) that would have the cost loads of money and years to execute. Three thousand people, lightly coordinated, made a huge data collection effort during four days with absolutely no cost to the taxpayer. Mass collaboration at it’s finest.
  • Each Wikipedia article has been edited an average of twenty times.
  • Globalization doesn’t just lead to rationalized supply chains. It also affects the geography of innovation. An estimated 20 to 30 percent of worldwide clinical research already takes place in Asia.
  • 40 percent of the goods on eBay are now uploaded automatically from the inventory system of third-party stores that use eBay as an alternative sales channel.
  • Deepening supplier involvement has significantly boosted the efficiency of the design process. When Boeing sent the specs to the electronic supplier for the 777, the document was twenty-five hundreds page long. The equivalent spec for Boeing 787 is a mere 20 pages.
  • The blogsphere is “the World`s biggest coffeehouse”.
  • The new private spaces are increasingly found online.
  • The modus operandi of R&D dept is to invent, not to aquire outside ideas.
  • What happens when the modifications and extensions that customer develop conflict with a company´s business imperatives?

For those who like to listen instead of reading I recommend an interview on YouTube. The wikinomics blog is also o good place to find information.

Happy reading!

/Ingrid Domingues