Using the Crowd as an Innovation Partner

Published on August 21, 2018


From Apple to Merck to Wikipedia, more and more organizations are turning to crowds for help in solving their most vexing innovation and research questions, but managers remain understandably cautious. It seems risky and even unnatural to push problems out to vast groups of strangers distributed around the world, particularly for companies built on a history of internal innovation. How can intellectual property be protected? How can a crowdsourced solution be integrated into corporate operations? What about the costs?

These concerns are all reasonable, the authors write, but excluding crowdsourcing from the corporate innovation tool kit means losing an opportunity. After a decade of study, they have identified when crowds tend to outperform internal organizations (or not). They outline four ways to tap into crowd-powered problem solving—contests, collaborative communities, complementors, and labor markets—and offer a system for picking the best one in a given situation. Contests, for example, are suited to highly challenging technical, analytical, and scientific problems; design problems; and creative or aesthetic projects. They are akin to running a series of independent experiments that generate multiple solutions—and if those solutions cluster at some extreme, a company can gain insight into where a problem’s “technical frontier” lies. (Internal R&D may generate far less information.)


Karim Lakhani

Karim R. Lakhani is a Professor of Business Administration at the Harvard Business School and one of the Principal Investigators of the Laboratory for Innovation Science at Harvard (LISH). He specializes in the management of technological innovation in firms and communities. His research is on distributed innovation systems and the movement of innovative activity to the edges of organizations and into communities. He has extensively studied the emergence of open source software communities and their unique innovation and product development strategies. He has also investigated how critical knowledge from outside of the organization can be accessed through innovation contests. Currently, Professor Lakhani is investigating incentives and behavior in contests and the mechanisms behind scientific team formation through field experiments on the Topcoder platform and the Harvard Medical School.

Kevin Boudreau

In his research, Dr. Boudreau studies how firms, markets and other more novel approaches to innovation can be used to solve especially challenging problems. He is especially interested in innovation problems in applied science, digital products, natural sciences, software, IoT and data science, and the production of useful knowledge, more generally.

He is an expert on platform design and in engineering innovation systems with the goal of harnessing the efforts of large numbers of problem-solvers using open innovation and crowdsourcing approaches. This has led too to an interest in academic research and science and how universities act as “platforms” for knowledge production.

His research involves large-scale field experiments and econometric analysis of observational data to advance our theory and understanding of fundamental processes of the engineering of our innovation systems shape knowledge production.

Dr. Boudreau is an Associate Professor at Northeastern University, with primary affiliation at the D’Amore McKim School of Business in the Entrepreneurship and Innovation Department, and is also affiliated with the Department of Economics, and the College of Computer and Information Science. He is also a member of the IoT Research Cluster with the College of Engineering at the Interdisciplinary Science & Engineering Complex.

Beyond Northeastern, he is a Research Affiliate of the National Bureau of Economic Research’s Program on Productivity, Innovation and Entrepreneurship and a Research Fellow at Harvard University’s Institute of Quantitative Social Science.

Dr. Boudreau’s earliest career began in engineering research, where he designed and carried out experiments in heat transfer of microelectronics and statistical analysis of the lithographic production of silicon chip wafers, with Bell Northern Research and Nortel. Later experience in operations, management and strategy in a number of industry sectors led to an interest in economics, management, competition and the practice and organization of innovation. This breadth of experience was made possible by beginning early, by participating in the University of Waterloo’s Engineering Cooperative Education program, in Canada. (Northeastern, his current institution, is the leading Cooperative Education institution in the United States.) In his career prior to studying Economics and Behavioral Policy Sciences in graduate school, he held positions at the Economist Group, Qualcomm, NASA, the Canadian Space Agency, Qualcomm, Braxton Associates, Deloitte Consulting, Nortel, and Bell Northern Research. He has since collaborated with companies and governmental agencies on topics close to his research, including G.E., Harvard Medical School, Babbage Innovation and Analytics, Zain, Syngenta, Altx Hedge Funds, TopCoder, and many others.

His research has been generously supported by Google, the National Bureau of Economic Research (NBER), Microsoft, the Paris Chamber of Commerce, Harvard Business School, the Institute for Innovation and Entrepreneurship, the M-Lab, the Kauffman Foundation, and HEC-Paris.

Kevin’s research has been published in journals such as Management Science, the RAND Journal of Economics, the Strategic Management Journal, Nature, Organization Science, Research Policy, Innovation Policy and the Economy, the Review of Economics and Statistics. He is an associate editor of Management Science in both Innovation and Entrepreneurship and in Business Strategy departments. He is on the editorial board of the Strategic Management Journal.

He has degrees from the Sloan School at the Massachussets Institute of Technology (Behavioral and Policy Sciences), the University of Toronto (Economics) and the University of Waterloo (Engineering).

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