The New Reality of Social Production

Don Peppers on LinkedIn: “…Waze is yet another example of social production, or the increasingly common use of connected people working together to create value with little or no actual economic incentives involved. Instead, social production is based on a completely different set of principles – sharing and giving, rather than trading and selling. It is an important aspect of what some are now calling the “sharing economy,” and systems like Waze are ever more rapidly replacing or supplementing large portions of the commercial economy, as Martha Rogers and I document in our book Extreme Trust.

In the commercial economy, where profit-making entities operate, what you pay for determines what you get. I pay you, and you give me something of value. I may be a customer buying a product or service, or you may be the boss paying my salary, but either way neither of us is volunteering. We are trading our time or money for value in return. In the commercial economy, we all expect to pay for the things we want. When you pay the grocer $6 for a 12-pack of Diet Coke by the can, you don’t begrudge him the money. And you wouldn’t even consider asking the grocer to give you the soda voluntarily, for free – the way a Waze participant voluntarily reports a new hazard for other participants.

An economic system based on money, as ours is, facilitates the efficient division of labor, enabling us to accomplish more and more complex tasks by dividing them into simple components. The end result is that you don’t have to wire your own smartphone together or harvest your own wheat for your morning bagel. The division-of-labor principle has allowed technology to become so complex that none of us today could ever make even the simplest manufactured products all by ourselves.

But because of the very efficient way in which people are now electronically connected, many social production tasks can also be parsed up and allocated bit by bit among assorted different players – just talk to any of the 3.4 million volunteer coders and developers who work on the more than 300,000 different open-source software projects now registered at Sourceforge, for example. Moreover, these tasks are sometimes so complex, diffused, or difficult that accomplishing them with a commercial model just wouldn’t be practical. Imagine what it would have taken for Waze’s organizers to identify and monitor traffic hazards across the nation on their own, for instance. A small army of paid scouts or robotic monitors would have been required, continually updating the system, and the cost would have made the whole project completely unrealistic…”

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