Decentralized Co-Creation of Value as a New Paradigm in Commerce and Culture

David Bollier has produced a new report that distills the proceedings of a conference of the Aspen Institute and is entitled, The Rise of Collective Intelligence.

Here is a summary of some of the topics covered by the report, from David Bollier:

bottom-up knowledge empowers ordinary individuals to approach market transactions on a more equal footing with sellers, who have historically had greater market power and knowledge. The commoners are able to capture more of the knowledge they create, and use it to their own advantage. Indeed, the commons can be regarded as a source of cutting-edge R&D for companies, as MIT professor Eric von Hippel has shown in his book, Democratizing Innovation.

The phrase that the conference used to describe this phenomenon is “decentralized co-creation of value.” It means that the market is not the sole source of value-creation; dispersed online communities are now sources of value that businesses must collaborate with in order to generate value. The commons stands on a more equal footing with the market. Instead of all “value” coming from centralized players like corporations, increasingly, value is coming from the “ends” of the Internet – the periphery, where new ideas and innovations first materialize. Value comes from individuals, and groups of individuals, operating in the free space of the commons, where overhead is low to nonexistent, and creativity is not regimented to service prearranged market niches. Thanks to the Internet, social niches are becoming “staging areas” for viable niche markets, a phenomenon also known as the “Long Tail.”

All of these developments create a real crunch for traditional large corporations because large companies like to have extreme control. That’s how they deliver predictable results to investors and protect their brand reputation. But on the Internet, control and predictability are not viable strategies. In fact, they are counter-productive. Value is generated by having less control. Customers won’t trust a company that tries to use digital rights management or bullying tactics to assert too much control. In a sense, companies are not just competing against other companies, but against the freedoms of the commons.

The challenge for businesses, then, is to develop new sorts of “open business” models that can respect the social dynamics of the Internet, while still monetizing certain forms of value (e.g., selling advertising to the Web users who like your site). Companies have to realize that brands are forms of socially created value; brands are not simply the result of advertising and image campaigns. Online communities create and promote a brand every bit as much as mass media.”

3 Comments Decentralized Co-Creation of Value as a New Paradigm in Commerce and Culture

  1. Jon Awbrey

    I really hate to be the constant party pooper, but we’ve been hearing all about the Bazaar and the Cathedral for years now, then came Wikipedia and Citizendium to show us the Bizarre tragedies of dysfunctional coalition formation in the Commons.

    Until our best-loved peer pundits start showing us that they have lowered their visions to the level of the very real obstructions to peersonhood that have reared their ugly heads over the last decade, then I’m afraid that their visions will remain more in the realm of pleasant hallucinations than realizable dreams.

  2. Michel Bauwens

    Co-creation of value is simply there, and is in the process of becoming a very important part of our social processes. The point is therefore: how can we efficient and democratic co-creation processes as opposed to dysfunctional ones. It’s pretty much like representational democracy: we know it is usually better than dictatorship, but it can be very dysfunctional. Similary, we can recognize that peer governance is a potential social advance, while recognizing it pitfalls and working to remove them. David Bollier, if you check onthecommons.org is all but a naive pundit, and has been working hard around issues of the governance of the commons.

  3. S Rhodes

    To add to Michel’s point, you seem to have it a bit backward, Jon. To expect perfection may be naive, but that’s no reason not to strive for it. Failures are always far more common than successes, and they provide a lot of insight. Successes are BUILT on the lessons of failures, and they can only be built when vision sees past them to some untapped potential.

    We can learn a lot from Wikipedia, such as the importance of transparency and guiding principles, one of which should have been “DO NOT DELETE MATERIAL.” In our analysis of failures, we can certainly come up with smarter ways to identify them early, if not significantly prevent them.

    I don’t know if we have any entries that provide an overview of the “real obstructions to peersonhood,” but I’d be interested in seeing one. I haven’t seen any problems so big as to not have potential solutions waiting to be tested and revised. We can get the conversation going right here on the wiki.

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