SHARING FOR FASTER GROWTH Roberto Vitalini

1
SHARING FOR FASTER GROWTHRoberto Vitalini WFSF
World Conference August 2005Corvinus University,
Budapest
2
WHY AM I HERE?
3
LEARN

• The future belongs to those who prepare for it
  today.
• Malcolm X (1925 - 1965)

4
CHANGE

• To change a system, out there, in any
  significant way, you need first to change
  yourself!

5
Agenda

• The Cooperative Force
• One Billion People Online
• Connect and Share Community Supercomputing
• Communities of Prosumers
• Why Share?
• Contribution Economies
• Peer Production
• A new way of Organizing Production
• Distributed Economies of Scale
• Knowledge Pools, Collective Memory
• Online Crowds are the Product Managers

6
How do we recognize the future?

• Does it have to land on you?
• Analogies help
• Its like X, but with Y
• Its like radio, but with two-way communications
• Nothing goes away, but it can get repurposed
• Technologies enable people to act together in
  new ways in situations where collective action
  was not before possible

7
NOKIAConnecting People
8
(No Transcript)
9

• File-sharing, blogs, wikis, participatory
  journalism, social networking services,
  open-source software, net-dating, free Internet
  telephony - these are each disrupting
  multibillion-dollar industries and reshaping the
  landscape of business, relationships and mankind
  dreams.

10
(No Transcript)
11
Connect!ALL TO ALL
12
(No Transcript)
13
What makes this special?

• The Willingness of Individuals to Improve the
  Collective Experience

14
The Cooperative Force

• Mass cooperation across time and space is
  feasible and economical.
• 1 billion people online worldwide can conduct
  themselves as one gigantic organism.

15
Connect and Share Community Supercomputing

• Skype allows you to make free calls over the
  internet. But it also allows your spare computing
  power and net connection to be borrowed by the
  Skype Network, which then uses this resource
  collectively to route other calls.

16
Imagine a world where a citizen could search the
globe to assemble my government, the ultimate
in customized,customer-centric services. Health
care from the Netherlands, business incorporation
in Malaysia Don Tapscott
17
Open Spectrum

• The two major means of organizing for economic
  production are
• the market
• the firm
• Open Source, is pointing toward a third means of
  organizing for production
• Peer-to-peer production is a new way of
  organizing production

18
What is Peer Production?

• Communities of prosumers or amateurs who
  collaborate to make things
• Wikipedia
• Metafilter
• Flickr
• OhMyNews
• By
• Sharing information about inputs and outputs
• which creates pooled knowledge
• ...which increases the efficiency of future
  production
• And having open access to the means of production

19
Why Share?

• Altruism
• Because we care
• Reputation
• Because there are spillover signalling effects
• Reciprocity
• Because of implicit or explicit social control
• Money
• Because there are explicit incentives
• Fun
• Because we derive social utility from doing so
• Etc
• .No definitive answer (yet).
• Empirical effects are unambiguous
• File-sharing, Wikipedia, threadless, etc
  demonstrate that peers do share

20
Peer Production Economics

• Distributed Economies of Scale
• and the Atomization of Production

Source Umair Haque // bubblegeneration.com
21
Traditional Value Creation
Traditionally, value activities were integrated
because market transaction costs were high
Management mediates transactions between primary
value activities Management coordinates and
exploits complementaries between supporting value
activities
Production creation, editing, finishing
Publishing finance, marketing, procurement
Source bubblegeneration.com
22
DisintermediationIntegration to Disintegration
Cheap information disintegrates traditional value
chains value activities rearrange in horizontal
layers, yielding efficiency gains
Disintermediation Markets mediate transactions
between primary value activities
Management coordinates and exploits
complementaries between supporting value
activities
Production creation, editing, finishing
Publishing finance, marketing, procurement
Source bubblegeneration.com
23
MicroproductionDisintegration to Atomization
Cheap coordination atomizes disintegrated value
chains value activities rearrange in
microchunks, yielding efficiency gains
Community mediates transactions between primary
value activities Community coordinates and
exploits complementaries between supporting value
activities
Production creation, editing, finishing
Publishing finance, marketing, procurement
Source bubblegeneration.com
24
MicroproductionDistributed Economies of Scale
Microchunks have a positive supply-side network
externality a peers private productivity is
less than his social productivity Why? User N
contributes blue microchunk G. This microchunk
is reusable. Microchunk reuse increases marginal
productivity Gs complementarity with other
microchunks reduces the marginal cost of future
productivity. This microchunk is modular.
Microchunk modularity explodes production set.
Gs complementarity with other microchunks
creates explosion in product set possibilities.
Source bubblegeneration.com
25
Knowledge Pool
Knowledge is an externality of value activities
learning-by-doing Knowledge pools when
information and preferences shared during peer
production are stored This knowledge enhances
future productivity by informing peers about how
to most efficiently modify inputs in order to
produce the most-desired outputs
Value activities (brown) have a knowledge
externality, which flows into knowledge pool
(silver).
26
Knowledge Pools

• Knowledge pools are repositories
• for information sharing mechanisms about inputs
  and/or outputs
• They store the communitys aggregated preferences
  and expectations
• To act as a collective memory for the PP
  community
• Examples
• Product/feature reviews (Yahoo! Finance msg
  boards)
• Tutorials, guides, and walkthroughs (GameSpy
  walkthrus)
• User reputation systems (eBay seller feedback)
• Stored product rankings (Amazon product rankings)
• Archived playlists, tags, links (Blogdex
  archives)
• Metainfo about community production
  (Metatalk.metafilter)
• Other metainfo

Source bubblegeneration.com
27
Knowledge Resources

• Why is knowledge important?
• Knowledge enhances productivity by more efficient
  use of inputs
• Knowledge is an experience effect a result of
  learning-by-doing
• Knowledge pool is the key resource for PP
  communities
• Users will select PP communities where they their
  marginal productivity is maximized
• Knowledge pool is strongest signal of potential
  productivity gains
• Signals potential productivity gains of joining
  community independent of network size
• Or signals current productivity per peer
• And since microchunks are non-rival in production
• Knowledge resources dont get exhausted they
  grow
• Knowledge pool is a resource stock
• That accumulates according to flow of knowledge
  externalities

28
Addictive and Cumulative

• Initial knowledge pool is additive
• My productivity increases when you join the
  network
• Ongoing knowledge pool is cumulative
• Every time we collaborate to produce a good, new
  knowledge is produced

29
Contribution Economies Peer Production

• Sharing information about inputs and outputs and
  having open access to the means of production.
• This is the first time in history that you can
  have distributed economies of scale (massively
  distributed and ultra-specialized
  microproduction).

30
Peer Production Rules

• Knowledge in a peer production community is a
  public good
• New users are attracted in proportion to the size
  of the knowledge pool
• New users increase everyone else's
  productivity,growing the knowledge pool

31
Look at the AD
32
(No Transcript)
33

• Doing and making cool stuff makes doing and
  making cooler stuff more efficient

34
(No Transcript)
35
(No Transcript)
36
(No Transcript)
37
(No Transcript)
38
A new economic system

• A collective action in which individuals arent
  consciously cooperating.
• When you link to a site, you are not really
  thinking  Im now contributing to Googles page
  rank .

39
Online Crowds become the Product Managers

• No more market surveys. Customers collectively
  volunteer information on what they want. Large
  online entities determine the products that
  companies manufacture.
• Meta-moderation
• Reputation Systems
• Collaborative Filtering

40

• Information for Fulvio ValsangiacomoFirst Name
  FulvioLast Name ValsangiacomoDescription
  Find out about the reputation of Fulvio
  Valsangiacomo at Repcheck.com

41
RepCheck

• In this electronic age, where face-to-face
  meetings are few and far between, reputation is
  becoming progressively more difficult to
  ascertain, but no less important.
• RepCheck allows users to review, rate and search
  our database of people's reputations for both
  business and social purposes.

42
EGOtrends

• The industry of the self will emerge and we will
  consume products that we helped create/shape.
• Personalized shoes, shirts
• Timbuk2, Build your own bag
• NikeiD, Build your own shoe

43
(No Transcript)
44
Conclusion

• In the contribution economy, sharing information
  and ideas may enrich our lives in ways we cant
  measure - yet. The next 60 years will be the
  most interesting times preceding transhumanism.
  We will constantly choose among infinite virtual
  possibilities.
• Choice Fatigue
• Give to get
• Pay to play

45
(No Transcript)
46
rob_at_wheii.comlinkedin.com // OpenBC.com //
CIWI.biz