''Wikinomics: How Mass Collaboration Changes Everything'' is a book by Don Tapscott and Anthony D. Williams, first published in December 2006. It explores how some

companies A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared go ...

in the early 21st century have used

mass collaboration Mass collaboration is a form of collective action that occurs when large numbers of people work independently on a single project, often modular in its nature. Such projects typically take place on the internet using social software and computer-s ...

and open-source technology, such as

wiki A wiki ( ) is an online hypertext publication collaboratively edited and managed by its own audience, using a web browser. A typical wiki contains multiple pages for the subjects or scope of the project, and could be either open to the pub ...

s, to be successful. The term 'Wikinomics' describes the effects of extensive collaboration and user-participation and how relationships between businesses and markets have changed as a result.

Concepts

According to Tapscott, the use of mass collaboration in a business environment in recent history can be seen as an extension of the trend in business to outsource: externalize formerly internal business functions to other business entities. The difference however is that instead of an organized business body brought into being specifically for a unique function, mass collaboration relies on free individual agents to come together and cooperate to improve a given operation or solve a problem. This kind of outsourcing is also referred to as crowdsourcing, to reflect this difference. This can be incentivized by a reward system, though it is not required. The book also discusses seven new models of mass collaboration, including: *

Peering In computer networking, peering is a voluntary interconnection of administratively separate Internet networks for the purpose of exchanging traffic between the "down-stream" users of each network. Peering is settlement-free, also known as "bill-and ...

: For example, page 24, "

Marketocracy Marketocracy Capital Management, is the investment advisor for the Marketocracy family of mutual funds and uses the research generated by Marketocracy Data Services. Marketocracy has recruited over 70,000 people to manage over 100,000 model portfoli ...

employs a form of peering in a mutual fund () that harnesses the collective intelligence of the investment community... Though not completely open source, it is an example of how meritocratic, peer-to-peer models are seeping into an industry where

conventional wisdom The conventional wisdom or received opinion is the body of ideas or explanations generally accepted by the public and/or by experts in a field. In religion, this is known as orthodoxy. Etymology The term is often credited to the economist John ...

favors the lone super-star stock advisor." * Ideagoras: For example, page 98, linking experts with unsolved research and development problems. The company InnoCentive is a consulting group that encapsulates the idea of ideagoras. * Prosumers: For example, page 125, where it discusses the social video game

Second Life ''Second Life'' is an online multimedia platform that allows people to create an avatar for themselves and then interact with other users and user created content within a multi player online virtual world. Developed and owned by the San Fra ...

as being created by its customers. When customers are also the producers, you have the phenomenon: Prosumer. * New Alexandrians: This idea is about the Internet and sharing knowledge. The last chapter is written by viewers, and was opened for editing on February 5, 2007.

Central Concepts of Wikinomics in the Enterprise

According to Tapscott and Williams, these four principles are the central concepts of wikinomics in the enterprise: #Openness, which includes not only open standards and content but also financial transparency and an open attitude towards external ideas and resources; #Peering, which replaces hierarchical models with a more collaborative forum. Tapscott and Williams cite the development of Linux as the "quintessential example of peering"; #Sharing, which is a less proprietary approach to (among other things) products, intellectual property, bandwidth, scientific knowledge; #Acting globally, which involves embracing globalization and ignoring "physical and geographical boundaries" at both the corporate and individual level.

Coase's Law

In the chapter ''The Perfect Storm'', the authors give an overview of the economic effects of the kind of transactions

Web 2.0 Web 2.0 (also known as participative (or participatory) web and social web) refers to websites that emphasize user-generated content, ease of use, participatory culture and interoperability (i.e., compatibility with other products, systems, and ...

permits. According to the authors, Coase's Law (see

Ronald Coase Ronald Harry Coase (; 29 December 1910 – 2 September 2013) was a British economist and author. Coase received a bachelor of commerce degree (1932) and a PhD from the London School of Economics, where he was a member of the faculty until 1951. ...

) governs the expansion of a business:

A firm will tend to expand until the cost of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market.Wikinomics: How Mass Collaboration Changes Everything, 56

However, because of the changing usage patterns of Internet technologies, the cost of transactions has dropped so significantly that the authors assert that the market is better described by an inversion of Coase's Law. That is:

A firm will tend to expand until the cost of carrying out an extra transaction on the open market become equal to the costs of organizing the same transaction within the firm.

Thus, the authors think that with the costs of communicating dramatically dropping, firms who do not change their current structures will perish. Companies who utilize mass collaboration will dominate their respective markets.

Reception

A review of this book in the ''Harvard Business Review'' states "like its title, the book's prose can fall into breathless hype." A review of this book in ''Choice'' recommends the book for "general readers and practitioners," but cautions that the authors "present an optimistic overview of successful collaborations and business ventures", "use unique terms (e.g.,

marketocracy Marketocracy Capital Management, is the investment advisor for the Marketocracy family of mutual funds and uses the research generated by Marketocracy Data Services. Marketocracy has recruited over 70,000 people to manage over 100,000 model portfoli ...

, prosumption, knowledge commons)", should have given "more consideration othe darker sides of human motivation as well as

groupthink Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Cohesiveness, or the desire for cohesiveness ...

and mass mediocrity", and "primarily draw on their own observations of businesses and trends for the ideas presented". Tapscott and Williams released a followup to Wikinomics, titled ''Macrowikinomics: Rebooting Business and the World'', on September 28, 2010.

References

External links

* {{official website, http://wikinomics.com/book
''Mass collaboration could change way companies operate''
article in ''

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