carl esposti introduces crowdsourcing
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THE INDUSTRY WEBSITE TM
CROWDSOURING AS A STRATEGY FOR ECONOMIC AND SOCIAL
IMPACT IN THE DIGITAL WORLD
28 Jan 2013 Presentation for the Multilateral Investment Fund/Inter-America Development Bank
Carl Esposti, Founder & CEO
© 2013 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 2
INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING AND CROWDFUNDING STRATEGIES
Industry think tank, massolution specializes in research, design and implementation of crowdsourcing and crowdfunding solutions for private, public, and social enterprises. massolution also operates The Industry Website™ Crowdsourcing.org.
For crowdsourcing, massolution provides research and analysis covering Crowdsourcing Service Providers (CSPs), use cases and the adoption of crowdsourcing by nations, governments, enterprises, and institutions.
For crowdfunding, massolution provides research and analysis covering Crowdfunding models, platforms (CFPs), implementation strategies, entrepreneurs, investors and campaign data and analysis.
massolution’s unique data assets, fact-based research and proprietary intellectual property, drive forward-looking and actionable insights that inform the strategies and operations of business leaders and market stakeholders.
© 2013 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 4
INSIGHTS. RESEARCH. ADVISORY.
Micro-Tasks are short-duration tasks completed by online workers. Micro-Tasks require no specialized knowledge or expertise other than a basic level of comprehension and cognitive judgment.
CROWDSOURCING IS AN ONLINE DISTRIBUTED MODEL FOR
PRODUCTION, PROBLEM SOLVING AND CAPITAL FORMATION.
CROWDSOURCING CATEGORIES
Expertise-based tasks are completed by online workers who are widely recognized as a reliable source of a technique or skill, or are accorded authority and status by their peers, or possess theoretical or practical knowledge of a subject based on a familiarity with someone or something and/or skills acquired through experience or education.
Crowdfunding is a type of capital formation where both funding-needs and funding-purposes are communicated broadly via an open call in a forum where the call can be evaluated by a large group of individuals, the crowdfunders.
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Ideation-based tasks are completed by online workers engaged in the creative process of generating, developing, and communicating new ideas, where an idea is understood as a basic element of thought that can be visual, concrete, or abstract. Ideation is all stages of a thought cycle, from innovation, to development, to actualization.
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© 2013 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 5
INSIGHTS. RESEARCH. ADVISORY.
FOUR UNDERLYING MODELS FOR ENGAGING THE CROWD
CROWDSOURCING DEFINITION (NEW)
Daren C Brabham, Ph.D. 2010): dbrabham.wordpress.com/crowdsourcing/] Assistant Professor, University of North Carolina at Chapel Hill
Broadcast Search
Distributed Human Intelligence Tasking Managed Asset Discovery
Peer Vetted Creative Process
© 2012 Crowdsourcing, LLC | contact@crowdsourcing.org November 2012 PAGE 6
INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING; THE NEXT DISRUPTIVE PARADIGM
OUTSOURCING, OFFSHORING AND CROWDSOURCING
Reliable and fast technology (broadband and mobile) connecting a potential workforce of 3 billion people who will be online by 2016
Changes in workforce structure that both enable and demand flexible working patterns driving a shift from “captive labor” to “crowd-based” labor models
New payment systems and regulatory oversight making the transfer of small payments affordable
Cloud-based technologies (SaaS, BPaaS, etc.) driving the standardization and externalization of key business activities and processes
Specialized providers organizing, harnessing and enabling on-demand access to labor and expertise
Enablers:
© 2012 Crowdsourcing, LLC | contact@crowdsourcing.org November 2012 PAGE 7
INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING – THE NEXT DISRUPTIVE PARADIGM
CROWDSOURCING
The outsourcing industry is poised for a disruptive shift that has the potential to be larger than the shifts that drove the outsourcing of work and the distribution of work offshore.
Crowdsourcing is already being leveraged by leading enterprises across many business activities and processes. Starting now, large elements of enterprise models will be moved into crowdsourced models for service delivery will be managed very differently.
© 2013 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 8
INSIGHTS. RESEARCH. ADVISORY.
Micro Tasks
Defense Advanced Research Projects Agency (DARPA) - Updating machine translation technology by informal language used on social media DARPA was able to translate 1.5MM words in two months, for a cost of around $0.03 per word, one-tenth the cost of using professional translators.
Pennsylvania Department of Revenue - Eliminating the cost and burden of staffing and supervising seasonal workers and improving the accuracy of highly sensitive data and information. Technology to breakdown and distribute sensitive data such as social security numbers and credit card numbers to distribute as unidentifiable packages of work to a crowd which are processed and then re-compiled.
Expertise-based Tasks
Microsoft – Reducing Contingent labor Spend via Enterprise Crowdsourcing - Microsoft was able to achieve a spend reduction across data entry, transcription of audio and video content, translation, data verification and de-duplication, classification and keyword tagging of up to 30% and improved cycle time by up to 200%
Target – Building an on-line product catalogue of 40,000 products - Via traditional methods it would require six years of effort for a single FTE or nine-months dedicated work from the internal content team. Using crowdsourcing to build a team of researchers, editors and content writers, Target was able to complete the task in two months.
Mobiliar – Testing of a Window-based application for pensions and insurance - Crowdtesting was not only more cost effective but does things that companies cannot reproduce in a lab environment,. There were multiple software versions, processors (32 and 64 bit) and 9 languages, including Arabic, Chinese, English, and Russian, resulting in more than 60 different configurations and over 1,000 permutations in just the desktop environment alone.
Ideation-based Tasks
IBM - This multinational computer, technology and IT consulting corporation implemented an ideation platform to power the IBM Data Governance Council online community, providing Council members a means to collaborate and identify solutions on information governance best practices.
Fiat Mio - Brazil’s most popular automotive brand called upon the powers of crowd-sourcing to build a new car. Working with Sao Paulo-based digital agency Agencia Click Isobar, Fiat built a web platform and assembled a group of contributors “that outstripped their expectations.” Fiat‟s website received over 10,000 suggestions from over 160 countries, which were then vetted by the team and presented to Fiat. Suggestions included what people want most from their cars - like size, environmental specifications and entertainment options.
CROWDSOURCING USE CASES
© 2012 Crowdsourcing, LLC | contact@crowdsourcing.org November 2012 PAGE 9
INSIGHTS. RESEARCH. ADVISORY.
MARKET GROWTH AND REVENUE COMPOSITION BY
SECTOR
Source: Massolution
ENTERPRISE CROWDSOURCING MARKET COMPOSITION
Detailed analysis of crowdsourcing revenues by size of enterprise reveals that the adoption pattern varies for each category of crowdsourcing.
Expertise-based crowdsourcing is the most diversified in terms of target client segments, it exhibits almost equal share of every segment.
Ideation is focused primarily on large and medium size enterprise
clients that have matured to the point that they are looking to innovate and engage constituents in the process of product and service development. They are also using crowdsourcing to create meaningful engagement with customers.
The utilization of crowdsourcing in the form of Micro-tasks are heavily utilized by medium size enterprises companies often experiencing high-growth.
THE ADOPTION OF CROWDSOURCING VARIES
BY SIZE OF ENTERPRISE
Source: massolution Crowdsourcing Industry Report – Enterprise Crowdsourcing: Market, Provider and Worker Trends. http://crowdsourcing.org/l/8346
EXPERTISE-BASED
IDEATION MICRO- TASKS
24% 20%
81%
53% 31%
25%
30%
15%
13% 21%
35%
40%
3%
5%
23% 40% 10% 2%
30%
Start-ups & small businesses (<$10M in Revenues)
Small enterprise ($10M - $100M in Revenues)
Medium enterprise ($100M - $1B in Revenues)
Large enterprise (>$1B in Revenues)
Crowdsourcing Industry revenue growth 2009-11
© 2012 Crowdsourcing, LLC | contact@crowdsourcing.org November 2012 PAGE 10
INSIGHTS. RESEARCH. ADVISORY.
151.3% 133.1%
90.6% 88.5% 67.0%
1.34 3.10
6.29
2009 2010 2011
Total number of crowdsourcing workers continues growing explosively, in most cases due to new companies entering the market. After posting an impressive 131% increase in 2010 over 2009, the industry continued signing up new workers at a pace of 103% growth in 2011 over 2010.
The fastest growing areas of the crowdsourcing workforce are Software services and Micro-tasks, which posted 151% and 133% growth respectively in 2011 over 2010 numbers.
NUMBER OF CROWDSOURCING WORKERS GROWS FAST, PRIMARILY
IN SOFTWARE SERVICES AND MICRO-TASKS
WORKER TRENDS AND COMPOSITION
Total number of crowdsourcing workers 2009-2011 Number of workers, based on a sample of 26 CSPs
Source: Crowdsourcing.org, 2011
Growth in the total number of crowdsourcing workers in 2010-2011 by crowdsourcing category
Number of workers, based on 26 providers sample
EXPERTISE-BASED
SOFTWARE SERVICES
IDEATION MICRO-TASKS FREELANCE
103%
165%
© 2012 Crowdsourcing, LLC | contact@crowdsourcing.org November 2012 PAGE 11
INSIGHTS. RESEARCH. ADVISORY.
Overall average salaries of crowdsourcing workers across all categories of crowdsourcing show clear alignment with global labor arbitrage with Western Europe leading at $15.8 per hour, closely followed by the US, with India trailing at $7.2 per hour1.
Typical salary of a crowdsourcing worker is dependent on multiple factors, including skills, crowdsourcing category and type of work performed. For example Micro-task workers earn ~50% less than an average worker in every geography and some workers earn as little as $1.50 per hour.
SALARIES OF CROWDSOURCING WORKERS REFLECT GLOBAL LABOR
ARBITRAGE
WORKER TRENDS AND COMPOSITION
Source: Crowdsourcing.org, 2011
Average worker salary per geographical location1
$US per hour
15.8 15.2 13.5
9.0 7.2
WESTERN EUROPE
U.S. EASTERN EUROPE
CHINA INDIA
Average worker salary per location for Micro-Task category only $US per hour
10.2 10.6 8.6
5.2 4.1
WESTERN EUROPE
U.S. EASTERN EUROPE
CHINA INDIA
Notes: 1 Data excludes Ideation category where salary of
workers varies dramatically, based on the specific nature of work.
2 The Eastern European salaries are higher on average as a result of the faster adoption of crowdsourcing in the higher income Central European countries (e.g., Poland, Czech Republic), rather than in their lower income Eastern European counterparts (e.g., Ukraine)
2
2
© 2012 Crowdsourcing, LLC | contact@crowdsourcing.org November 2012 PAGE 12
INSIGHTS. RESEARCH. ADVISORY.
TARGET SALARIES OF CROWDSOURCING WORKERS VARY
SIGNIFICANTLY
WORKER TRENDS AND COMPOSITION
Source: Crowdsourcing.org, 2011
Depending on type of work, number of hours and the workers’ efficiency in performing the work, crowdsourcing workers can earn a broad range of salaries. For example, the top five workers by total earnings, earn on average from $500 per month on Micro-task platforms to an average of more than $8,000 per month on Expertise-based and Software services platforms.
This illustrates clearly one of the most fundamental characteristics of crowdsourcing from the workers’ point of view: flexibility.
Monthly earnings of top five workers by crowdsourcing category $US per month
500
4105
8300
MINIMUM AVERAGE MAXIMUM
Micro-tasks Expertise & Software-based services
© 2012 Crowdsourcing, LLC | contact@crowdsourcing.org November 2012 PAGE 13
INSIGHTS. RESEARCH. ADVISORY.
THE EVOLUTION OF WORK INTO THE CROWD
MARKET EVOLUTION
OUTSOURCING GLOBALIZATION CLOUD CROWD
Technology
Scope
Pricing Model
Benefits
Savings
IT Infrastructure Applications
Horizontal BPO Vertical BPO
Remote Infrastructure/Applications Support
BPO Specialties (e.g., CRM / F&A)
SaaS BPaaS
Platform BPO
> 68 Use Cases and growing
Sophistication systems monitoring, reporting and
governance tools
Separation of systems from people (e.g., RIM / ERP
Integration)
Highly scalable cloud-based technologies Workflow, adjudication and
worker management
Input Based evolving to output based
FTE/Staff Augmentation evolving to deliverable based (sometimes with performance incentives)
On-demand and usage based
Can reach full variability and up to 100%
performance based
Accountability Flexibility a Myth
Accountability at lower cost Flexibility still a Myth
Scalability and improved efficiency and speed
Changes the paradigm for existing and new scope
15%-20% ( up to ~30% for
transformational OS)
30%-40% (driven by labor arbitrage) ~30%50% ~30%-90%
Processes Defined and
selectively retained and sourced
Improved with shifting end-to-end accountability
Standardized and externalized Further optimized
Crowdsourcing.org: Crowdsourcing and Crowdfunding Resources
ABOUT MASSOLUTION
Industry think tank, massolution specializes in research, design and implementation of crowdsourcing and crowdfunding solutions for private, public, and social enterprises. massolution also operates The Industry Website™ Crowdsourcing.org.
For crowdsourcing, massolution provides research and analysis covering Crowdsourcing Service Providers (CSPs), use cases and the adoption of crowdsourcing by enterprises.
For crowdfunding, massolution provides research and analysis covering Crowdfunding Platforms (CFPs), enterprise implementations, entrepreneur, investor and campaign data and analysis.
Crowdsourcing Inc.
Carl Esposti, Founder and CEO +1 310.948.1258
Email: carl@crowdsourcing.org www.massolution.com
Twitter: @Crowdsourcing_ www.crowdsourcing.org
massolution’s unique data assets, fact-based research and proprietary intellectual property, drive forward-looking and actionable insights that inform the strategies and operations of business leaders and market stakeholders.
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