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Opportunities and Challenges of Crowdsourcing for Smart Regions

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By Birgitta Bergvall-Kåreborn & Anna Ståhlbröst, Luleå University of Technology, LTU. Presented at CSW Summit Arctic Circle 2015. Learn more and join us at our next event: www.crowdsourcingweek.com

Publicada em: Economia e finanças
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Opportunities and Challenges of Crowdsourcing for Smart Regions

  1. 1. Opportunities and Challenges with Crowdsourcing in Smart Regions Birgitta Bergvall-Kåreborn Luleå University of Technology Luleå Birgitta.Bergvall-Kareborn@ltu.se Anna Ståhlbröst Luleå University of Technology Luleå Anna.Ståhlbröst@ltu.se
  2. 2. Agenda • Smart Regions • Living Lab • Crowdsourcing: hobby, labor, work, or exploitation • The case of IoT Lab • The case of Apple and Google • Reflections
  3. 3. What do we mean by Smart Regions? Smart refers to when investments and innovations contribute to sustainable growth with a high quality of life and a wise use of natural resources through active and open involvement of citizens
  4. 4. Strengths in our region • Strong economical growth • Entrepreneurial people • Unique natural resources • A magnificent nature • Broadband for “all” • Attractive living environments • Changing and rich cultural life • Collaboration between the university and the society • Cold, Dark, Slippery, Snowy, Silent, Distances • Small villages and cities – shorter ways to decision, trust
  5. 5. Challenges for the region • Geographical distances – most remote in Europe • Decreasing population – decreasing tax income • Growing amount of elderly– increased societal costs • Power structures –increase young peoples influence • Need of infrastructure (transport/IT/service) • Cold, Dark, Slippery, Snowy, Peripheral • Small villages and cities – many want their own solution – unhealthy competition/protectionism
  6. 6. People Places/spa ces Education eHealth Transport eGovernment Infrastructures Living eBusiness Digitalization enabling a “smarter” region
  7. 7. Background of EnoLL • Started to emerge in 2003 in Europe • About 420 Living Labs today – Work in different thematic areas, e.g. energy, e-manufacturing, e- participation, rural LL • EnoLL office situated in Belgium, IBBT – Yearly waves of LL recruitment • Build on the assumption that large user communities situated in real-life contexts and build on Public-Private Partnership can support the innovation process
  9. 9. Living Lab - An Open environment for human-centric ICT development
  10. 10. Characteristics of Living Lab approach • Design, test and experiment in real-life contexts • Encourage humans (e.g. potential users) to be engage to take active part in innovation processes form early needfinding to market launch • Design digital service innovation with humans and their needs in the center • Adopts an open approach and strives to elicit resources of different types from the environment • Partly distributed • Multi-stakeholder involvement
  11. 11. Living Lab A Living Lab is a user-centric innovation environment, built on realistic activities and research where all relevant partners are involved in open processes, with objective to generate sustainable values for LL partners and stakeholders
  12. 12. Living Lab as a Milieu • ICT & Infrastructure: the role technology play in innovation processes • Management: ownership & organisation • Partners & Users: The collective knowledge • Approach: methods and techniques for LL practice • Research: learning and reflections
  13. 13. Key-Principles in practice Openness;  Engage multi stakeholders to participate  Openly share ideas and designs  Have an open mind Influence:  The input from stakeholders must be used  The results of the input should be communicated  Users are active, competent partners and domain experts Value  Experienced value of the innovation  Focus on understanding needs and motivators  Values arising from experiences and reflection of use
  14. 14. Key-Principles in practice Realism:  Make real world implementations  Stimulate real use situations  Understand stakeholders different views on reality Sustainability:  Continuous learning – development of theories, models and methods  Minimise environmental impact by developing sustainable innovation processes
  15. 15. Living Lab Activities Happens wherever the people are or could be
  16. 16. Different types of involvement Design for Users Design with Users Design by Users
  17. 17. Crowdsourcing – Hobby, Labour, Work, or Exploation
  18. 18. Crowdsourcing • In 2006 Jeff Howe presented crowdsourcing as a new level of outsourcing, arguing that instead of sending jobs to countries such as India and China, companies now outsource functions once performed by employees to an amorphous and generally large pool of individuals
  19. 19. Crowdsourcing • In the beginning many of the crowdsourcing activities were not perceived as ‘work’ in the traditional sense, but interpreted as socialising, blogging, or contributing towards creativity and innovation. • US Berkerlys SETI@home (lending processing power from millions of computers to search for extra terrestrial life) • Wikipedia • MySpace
  20. 20. Crowdsourcing • Crowdsourcing are often portrayed as the ‘democratization’ of idea generation and as a form of creative commons • BUT the significant commercial value some of these platforms have created is not shared equally
  21. 21. IoT Labs: The power of the crowd och IoT
  22. 22. Example: The Living Lab process of citizens outreach and end-user involvement User-recruitment by invitation User engagement User interaction and support Dataanlysis and closing 1. Define user-activities 2. Find people to be invited 3. Invite users and ensure the right users to be engaged 1. Choose users 2. Contact and commit users 3. Formalize user- involvement with the individual users 1. Stimulate user-actions 2. Support users 3. Gather user-data 1. Analyse result 2. Finalize user- involvment with users 3. Report result to users 4. Archive user-data Researcher/ Industry/Public auth. propose investigations ? LL user-panel operator
  23. 23. Opportunities with crowdsourcing in IoT Lab • Empowerment of citizens • Gather human data - Knowledge about peoples movement etc, to accomplish social change • Inspiration for future innovation/research areas • Direct feedback on ideas, concepts, prototypes, solutions from the crowd • Creative and innovative research processes • Real life experiences
  24. 24. Crowdsourcing & Privacy
  25. 25. Crowdsourcing • Crowdsourcing are often portrayed as the ‘democratization’ of idea generation and as a form of creative commons • BUT the significant commercial value some of these platforms have created is not shared equally • Huffington Post, launched in 2005, was sold to AOL in 2011 for $315 million
  26. 26. Crowdsourcing as a labor model • at iStockphoto a photo of typical size and quality can be purchased, royalty-free from between 1-5 US dollars (50 dollars). • The crowd photographers receive 20% of the purchased price any time one of their images are downloaded.  iStockphoto’s revenue increased with 14% per month in 2005 and they estimated a bulk of 10 million photos available in 2006  Many companies such as IBM and United Way, have used iStockphoto for many years • It is also clear that the contributions from crowd are essential for the company.
  27. 27. Crowdsourcing • In 2006 Threadless was selling 60.000 T-shirts a month, had a profit margin of 35 percent, and were close to gross $18 million, all with less than 20 employees. • Winning designers receive $2000 but sacrifice all rights to their design in the process. • Over roughly five years Threadless has acquired 500 designs, about 15 percent of which have been reprinted in response to demand within Threadless' community of 350,000 users
  28. 28. Crowdsourcing • Elance-oDesk as an example reveals both the scale of operations and global reach of crowd employment platforms. • 2013 more than two million businesses used the site (Microsoft, Unilever, Walt Disney), with eight million freelancers within 180 countries completing asks and generating revenues of $750 million.
  29. 29. Crowdsourcing • Differences between crowdsourcing and traditional workforce – its flexibility in scalability and on-demand labor access, – the broad range of skills and experiences of the workforce, – the absence of physical job sites, work performed and compensated entirely in cyberspace, – involve many-to-many relationships between employees and employers, – the low reimbursement cost for jobs carried out, the low overhead coast, low personal and administrative costs, – lack of employment regulations and employer security
  30. 30. The Apple and Google Case
  31. 31. Apple and Google Case • In 2008 Apple introduced a development and distribution platform and the rest is history… • Opened up a new market for micro and small companies (before the carriers worked as gate keepers) • Platforms offer development tools, customer base, strong brand, paying function, … • Created a new market for the platform owners and strengthened their existing products
  32. 32. The Apple and Google Case • Hobby – Some people watch TV, I develop software program • Labor – As a micro company one need to enter new markets early, before the big companies take over – I see it as competence development – I have my normal job and do this on the side • Work – We moved our business to mobile platforms and apps • Exploitation – Why should we pay 30% of our revenues to the platform owner when we create great value to the platform and take all the risk
  33. 33. Value Creation and Capturing • Value creation enhanced by platform ‘ – “If third-party software applications and services cease to be developed and maintained for the Company’s products, customers may choose not to buy the Company’s products” (Apple 2012: 13) • Apple significantly increase their proportion of value by avoiding the direct costs of software development • Apple extract rents of 30% of price or in-app advertising revenue
  34. 34. Power asymmetries • The platform owner: – Is the one in charge – future strategies are not disclosed; cyclical nature of IT industry – ultimately decides whether applications are permitted on the App Store – apps can be easily replaced and often have a short shelf life, marketplace is crowded and highly competitive
  35. 35. Reflections • Based on Apple, Google, AMT, Task Rabbit • Democracy • Power asymmetry • Value Creation and Value Capture • Risk (Economic, Personal, Social) • Hobby, Labour, Work and Exploitation