book.chapter 1. The four pillars of collaborative economics .

In the late 1990s, goldcorp revolutionized the mining industry by openly sharing its data, inviting global collaboration through the "goldcorp challenge," which led to significant gold discoveries. This approach, emphasizing openness, peering, sharing, and acting globally, showcases the transformative power of mass collaboration in business. Radical transparency and openness. Peer production refers to a decentralized model of production where individuals voluntarily cooperate as equals to achieve a shared goal. Participants self-select tasks that match their skills and interests. There is no hierarchical management structure directing activities. Peer production leverages the power of collective intelligence, allowing large, complex projects to be tackled that would not be feasible using traditional organizational models. Successful examples of peer production include open source software projects like linux and apache http server, where global communities of developers collaborate to build and maintain the infrastructure powering much of the internet. Wikipedia is another prominent case, having been created and expanded into one of the largest encyclopedias in history entirely through the efforts of volunteers. Commons-based peer production more specifically refers to peer production focused on non-profit ends and building shareable goods. Peer production provides opportunities to harness distributed human creativity for tackling problems. The cambia institute used public biological open source licenses to freely share their research on genetically modified crops. This allows anyone to build on their work to develop crops that can help feed people in need. Marketocracy has crowdsourced stock trading expertise by having over 70,000 virtual traders compete. The best performers guide investments for a mutual fund that regularly beats stock market benchmarks. Peer production over hierarchy. In the past, companies closely guarded trade secrets and intellectual property to maintain a competitive advantage. However, a new business philosophy called wikinomics is emerging that embraces openness, peering, sharing, and global collaboration. Smart companies are realizing that opening their boundaries and sharing intellectual property can actually accelerate innovation and boost revenues. Amazon, ebay, and google have pioneered this approach by providing open access to their technology platforms. This allows outside developers to build new products and services leveraging their infrastructure. For amazon, 30% of annual revenue now comes from third party sellers using its e-commerce engine. Other success stories highlight the power of open boundaries. Facing declining sales in the early 2000s, procter & gamble initiated a program to source 50% of new product innovations from external partners. This open model generated hundreds of new products, some of which became big hits. Mit offers free access to its entire curriculum online through opencourseware, enabling aspiring students anywhere in the world to access a world-class education. Rather than hoarding knowledge, mit generously shares it to empower learning. The key principles powering the wikinomics approach are openness, peering, sharing, and global collaboration: Openness means companies openly share intellectual property, data, and technology platforms to spur innovation. Peering involves collaborating as equals rather than in traditional hierarchical structures. Sharing implies freely exchanging knowledge, resources, and capabilities across company boundaries. Finally, global collaboration leverages insights and talents from partners worldwide. This open, participatory approach harnessing collective intelligence and effort can drive rapid innovation. Rather than tightly controlling ip, smart companies are opening boundaries to expand markets and accelerate success. Wikinomics offers a new model for the hyper-connected world. Pooling resources openly. Smart firms today are intent on sharing their intellectual property with others, rather than keeping it locked away. By doing so, these companies are positioning themselves at the center of a vast system for wealth creation. They encourage others to take what they've done and build upon it, allowing everyone to benefit from customer-driven innovation and creativity. While there are some critical trade secrets that firms should keep proprietary, companies cannot effectively collaborate with others if everything they have is kept hidden. Sharing knowledge builds a vibrant business ecosystem that will help everyone achieve growth through further innovation. Some noteworthy examples of the power of sharing include Skype, an Internet-based telephone service that grew to 100 million registered users in two years without any capital investment. The company's reach expanded because its users were willing to share their computing power with each other. Skype was later acquired by eBay for $2.6 billion in September 2005. Another example is the California Department of Education, which open-sources its textbooks for students. This not only puts high-quality educational material within reach of everyone who wants it, but it also saves Californian taxpayers more than $400 million per year. By sharing their intellectual property, companies can foster collaboration, drive innovation, and create value for themselves and others. While some trade secrets should remain proprietary, the benefits of open sharing often outweigh the risks, leading to growth and success for all involved. Behaving as global enterprises. Forward-thinking companies today recognize the value of sharing intellectual property rather than solely relying on patents and trade secrets to protect their assets. By openly disseminating some of what they know, these firms position themselves at the center of a broader innovation ecosystem that ultimately benefits all participants. Although critical proprietary information still requires safeguarding, excessive secrecy precludes the productive collaborations needed for continued growth. A prime example is skype, the popular internet-based phone service. Skype attracted 100 million registered users within just two years, without needing any capital investment. This phenomenal expansion derived from users' willingness to share computing resources with each other through the platform. Skype's model proved so effective that ebay acquired the company for $2.6 billion in 2005. Similarly, california's open sourcing of public education textbooks exemplifies the power of knowledge sharing. Making high-quality educational materials freely available to all not only promotes learning but also saves state taxpayers more than $400 million annually. Students can access course content on day one instead of waiting until they can afford textbooks. While sharing intellectual property does require balancing commercial interests, companies that judiciously open up proprietary information can foster innovation ecosystems that ultimately benefit all participants. Collaboration and creativity thrive when firms move beyond an insular focus on protecting assets and instead disseminate knowledge to spur further advancement. Although secrecy still has its place, companies cannot effectively partner with others if everything remains hidden from view. By sharing what they know, forward-leaning enterprises cultivate vibrant business ecosystems where collective growth emerges from ongoing innovation.