The Future of Co-Creation and CrowdsourcingDocument Transcript
DRAFT THE FUTURE OF co-creation AND crowdsourcing – 15-05-2013 Copyright
2013® Nick van Breda & Jan Spruijt
The Future of Co-creation and
Nick van BREDAa,1
, Jan SPRUIJTa,b
Academy of Marketing, Avans University of Applied Sciences, The Netherlands
Professorship of Innovative Entrepreneurship, Avans University of Applied Sciences,
Abstract: This article reviews how co-creation is developing over the world and how
different businesses are able to use co-creation. To give a clear sight of that, stories of
companies, marketers and trend watchers will be used to tell about this phenomenon called
crowdsourcing and co-creation. Marketers found a method to combine co-creation with the
existing method of creating something new. Based on research we can now predict how
co-creation will develop over the following years.
The evolution of co-creation is more exciting than we previously thought and we think that
these results have to do with how the internet and social media have developed. A
revolution is coming up and organizations will see an increase in turnover based on fast
innovation and participation by the crowd.
We are living a world with a new dimension: a dimension where large organizations have
no reason for existence when customers aren’t satisfied with their purchase, the
organization’s service and most of all their feeling of participation. Consumers feel that
they should have the power to change visions and missions of the old fashioned marketing
way: the manipulative way to earn money. A dimension where 24/7 online is the key to
succeed, fast responses to questions and remarks. In this time if continuous changes,
creativity is a must.
Keywords: Innovation, co-creation, crowdsourcing, open source, management system,
progress, trends, opportunities, prosumers, participation, globalization, consumers, open
innovation, collaborative innovation.
This research started its way by an organization called Edcom which started an
open contest to write a paper about co-creation. Recently co-creation and
crowdsourcing, which is a form of open innovation as well, has been an increasing
topic of interest in the market and therefore we have searched for the link between
different forms of co-creation and how both forms could impact today’s business.
Platforms on co-creation and crowdsourcing, like 99designs and Crowdsite, have had a
big rise in interest over the years (see table 1). This article will explain how co-creation
and crowdsourcing could have its impact and could be implemented in the management
of organizations in the upcoming years.
per month Designers Growth in designers Growth in contests
2009 75 6.325 141,04% 200,00%
2010 150 8.921 175,78% 166,67%
2011 250 15.681 156,85% 160,00%
2012 400 24.595 128,57%* 130,00%*
2013* 520* 31.623* 120,00%* 130,00%*
2014* 676* 37.948* 116,67%* 130,00%*
2015* 879* 44.273* 120,00%* 130,00%*
Year Contests per month Designers
2008 1.214 22.685 14.568 233,60% 123,69%
2009 1.502 52.993 32.587 163,10% 142,90%
2010 2.146 86.431 58.337 154,54% 193,58%
2011 4.154 133.571 108.185 135,30% 147,85%
2012 6.142 180.716 181.884 124,08%* 124,68%*
2013 7.658* 224.232* 212.514* 116,21%* 116,23%*
2014 8.900* 260.576* 276.555* 115,77%* 113,48%*
2015 10.100* 301.663* 328.720* 114,00%* 110,00%*
*Prognose of growth
Table 1. Growth number of crowdsourcing platforms (Crowdsite, 99designs)
Co-creation is a term introduced by Barbara Marx Hubbard in 1980 (Hubbard,
1989). In the beginning it didn’t become popular, but that changed in 2000 when the
term was reintroduced in marketing being described as consumers that are enabled to
contribute in the development of a product. Prahalad and Venkat Ramaswamy refined
the definition with being an extension to companies’ products and services to create an
additional economic value (Prahalad & Ramaswamy, 2004). In short “an interactive
more valuable product or service made by a meaningful, creative and inclusive
engagement with all stakeholders” .
There are two forms of co-creation. The first is described as outside-in and the
second as inside-out. Outside in means that “the enterprise ports a platform on top of
which the stakeholders can engage in the various activities” (Ramaswamy, 2011). As
an example we take Apple that made their iTunes store where people could sell their
songs on with a share of profit and create value to the customer by selling single songs
instead of CDs. Inside out means that the organization is searching for solutions within
their organization, actively working and engaging employees to collect their idea.
Every idea is being showed in the progress so that the employees interact and add more
value into ideas of other. This progress can be tracked all the way to the realization.
Idea Click and T-Mobile are great examples here: they managed the employees to
participate and employees felt that they were doing something meaningful
Why should organizations use co-creation? There are several reason why it is good
to use co-creation in organizations and, to make a clear sight we use the most valuable
reasons for both the organization and for the participating stakeholders (Rossi & De
Organizations creates a self-sustaining system
(Positive) network effects
Setting of an informal standard
The revealing by other of related innovations
Building online community
Sense of belonging
Gain of knowledge
Fun and excitement
Pride and passion
What has crowdsourcing has to do with co-creation? The definition of
crowdsourcing is; “when a company takes a job that is once performed by an employee
and outsources it in the form of an open call to a large undefined group of people
generally using the internet” (Howe, 2006). This means that jobs like researching,
designing, innovating, testing and more can be done by the (generally online) crowd.
crowdsourcing is more like the first step to outside-in co-creation, where organizations
start to interact with the crowd and whether the organization chooses to work with a
small amount or one single person to create more value in a product or service it starts
to be co-creation (co-creation differs in that co-creation is about working
collaboratively with a group of people with specialized skills or talents (Teng, 2011)).
For example, let’s take Battleofconcepts, a platform that uses the form of
crowdsourcing and when the winning concept has been declared, the company asks the
person to start co-creating it into realization. At that point it becomes a meaningful
engagement . It isn’t successful for every participating company, but chances are big.
Prahalad tells us that this meaningful engagement has to do with four principals:
transparency, access, dialogue and reflexivity. The last principle seems the most
relevant for co-creation. He explains it as “enhancing, sense making and learning while
evolving the design of the environment to make participants’ engagement experience
more meaningful” (Prahalad, 2006; Teng, 2011).
Below, some statistics about the forms crowdsourcing, co-creation and open
innovation have been depicted. As you can see co-creation is the smallest of the three
which explains how widespread crowdsourcing is and how much awareness is rising.
Googling the word “co-creation” yields over 375 million hits today (May 2013) which
were 30 million hits in May 2011, up from barely a million hits from around June 2007.
The same is happening with crowdsourcing, introduced in 2006 by Jeff Howe and grew
to 11 million hits on Google (May 2013) and interest is still going up.
Figure 1: trends in crowdsourcing, co-creation and open innovation
Next to this graph we took a look at “Crowdfunding”. As you can see it has grown
explosively. Crowdfunding is the step after crowdsourcing, co-creation and open
innovation to fund money by the crowd. The amount of platforms and the successful
project stories created huge awareness and this form of co-creation has shown to
contribute to a bright future for small organizations or starter to realize their projects.
(Source: Google Trends, May 2013)
Figure 2: trends including crowdfunding
To get a clear understanding about the use of co-creation take P&G as an
example (one of most progressive organization on co-creation). Procter & Gamble
serves 4,4 billion consumers today and they strive for extraordinary quality. They
use open innovation to grow by the touching and improving of more consumers
this is done with finding out consumer behavior through co-creation (Source:
www.cocreate-pg.com). crowdsourcing and co-creation at P&G is implemented
the following way:
1. Make a contest (what section will you innovate in).
2. Set a price (see below P&G example).
The organization offers the winning contestant to work with their experts
The winner is able to see creative ideas from other designers/innovative
The first three will be awarded with a price (USD 5000, 2500, 1500)
The fourth to tenth ranked persons will be awarded with products
3. Set rules to join (over 18 years old, no employees of P&G aloud).
4. Make a login system to get contact details (on the platform, website, through
5. Make sure the platform describes the briefing very clear so that anyone could
understand it and always re-read it before submitting the proposal.
6. Make sure that the proposal is as clear as the level of detail they provide (advise
them on the platform, offers them an example)
7. Set key deadlines (of one or two months is the standard).
8. Make sure participants can contact for questions (helpdesk, mail address).
9. Contact winner by phone/mail and ask them if they do not infringe 3rd
10. Make sure the agreement will include the rights to be transferred to the
organization when the winner is chosen.
11. Make certain rules against offensive entries (inform/evaluate the participant about
it and delete the entry of the platform).
12. If you offer tools for the participants, make sure these are working and that they
can get support by contacting the support center (by mail/phone).
13. Start co-creation with the winner(s) in combination with your experts.
Consumers to prosumers. Today, business are no longer in control of their
products, brands and messages, because the possibility to interact with organizations
and the market became available from everywhere over the world (because of the
internet). The consumers are in control now. They can choose what they want instead
of having no other choice than consuming it from the seller in the city. Prosumers start
to believe in companies’ products if they are convinced by the crowd, a friend, family
or the members of a social web, like bloggers. Companies will need to create trust and
engagement now instead of just telling that they are the best. After that people will
become the voices of the products and this will have significantly impact on the
success or failure of companies. co-creation is in a way connected to this, because the
crowd/consumers that believes in the organization will be the one with the most chance
of interacting and collaborating to eventually become their ambassadors (Gunelius,
In a theoretical overview of user participation in innovation, Bogers, Afuah, and
Bastian (2010) have provided numerous elements that haven’t been researched so far
and should provide interesting insights for future developments in co-creation:
Definition of co-creation users: given the variety of results, roles of users,
contexts and methodologies, many articles are difficult to compare.
Radical versus incremental innovation: the general perception indicates that co-
creation lead to more radical innovation, however, there seems to be no evidence
of this fact.
Tacit knowledge: there is a lot of tacit knowledge that contributes to the
effectiveness of co-creation. However, this knowledge should be made explicit
before it could contribute to research studies.
Industry dynamics and locus of innovation: the changing role of co-creators
should be investigated; are they participators or innovators themselves? Are they
innovating a particular product or providing useful insights to the market as a
Firm boundaries: co-creation has an interesting effect on business models and it
could be questioned whether organizational theory is changing because of the fact
that firm boundaries become less clear to users.
Open innovation: users start participating in internal innovation processes; the
effect of this development on organizations and users has not been researched
Profit: who will profit from user innovation and co-creation? There is much
debate going on about how co-creators should be rewarded for their work.
Research questions and methodology
The foregoing leads to interesting dilemmas and research possibilities. The
increasing attention to both co-creation and crowdsourcing, combined with the lack of
literature on future possibilities of these theories, leads to our research question:
In what ways will co-creation and crowdsourcing manifest itself in
the (near) future?
Co-Creation in the near future. During our research we have found different
possible ways in which both co-creation and crowdsourcing will change in the near
future. These changes will have a high impact on organizations and business models.
The most important aspects that will change are: co-creation leadership; co-creation as
mechanism for branding, viral marketing, social media in co-creation
1. Leadership of co-creation:
Co-creation seems to change the way an organization is organized in the future.
Where the old organization structure is still a hierarchy in many organizations it will
turns them into a heterarchy.
Hierarchy is disrupted, we run many systems in hierarchy but it’s now more of a
network instead of a perfect tree. “A heterarchy instead of hierarchy” (Maeda, 2012).
Figure 3: heterarchy
Leaders have a challenge today, how to lead differently. co-creation leadership is a
concept that has become out of the heterarchy. Leaders found out that it’s way more
effective to use less people on the jobs by a more collaborative and transparent way.
Every person in an organization will be asked the questions where they are good at or
passionate about. The moment when the managers face a problem it is easy to find the
right internal person to co-create a solution together with. Employees book better
results when they can work informal with the formally higher staff and when they can
express their talents/passion. To innovate fast a selected group that combines either
talented designers with their creativity, researchers with their knowledge and marketers’
with their selling capabilities to co-create value to stay up to date with world latest
trends (where organizations used to pay lots of money for in outsourcing). When
everyone has the same influence in the company employees will be much more
motivated and proud of their work. For example Google is doing this, every employee
got 20% of their workday free to create and offer ideas for the future of the company.
The difference in this new creative leadership is showed in the table below.
Traditional Leadership vs. Creative leadership (Maeda, 2012). These findings are
supported by different organizational theories, such as the structural holes and social
capital (Burt, 2001, 2009).
Traditional Leadership Creative leadership
Concerned with being right Concerned with being real
Follows the manual Improvises when appropriate
Loves to avoid mistakes Loves to learn from mistakes
Orchestra model (one influencer) Jazz model (everyone influencer)
Community in harmony Community in conversation
Wants to be right Hopes to be right
Open to limited feedback Open to unlimited critique
Sustaining order Taking risks
Closed system Open system
Table 2. Traditional vs. Creative leadership.
Organizations also started a new way of finding the right employee through a
crowdsourcing platform (introduced in 2011). A new business model that gives you the
opportunity to write you in as an available employee or offer yourself to be a recruiter
to find the very best employee per job. When someone gets picked you will get a
certain fee for helping. Because they are working in the cloud it saves a lot of time and
money. (Source: TheJobpost.co.uk).
Organizations seem to more and more ask for leaders that can handle the openness
of this new way of leadership. The first applications are on the web, from Director of
Global Open Innovation” to “Head of crowdsourcing. What skills are essential for
these kind of jobs? It’s all about connecting and development to help organizations
with their outside in and inside out co-creation (Roth, 2013).
2. Co-creation as a mechanism for branding
Branding is about the connection between firms and consumers, with co-creating
value, the business can connect with social connections in a more meaningful way.
Those people are the influencers and these are not only restricted to their own country
anymore. Organizations learn from the monitoring of their co-creation process by
creating value among consumers. Three important elements are used in this process:
consciousness of kind, share rituals and traditions and a sense of moral responsibility
(Muniz Jr & O’guinn, 2001). Brand communities start pushing and pressuring firms to
engage with the empowerment of consumers from all over the world to use value co-
creation and creating an appropriate global value proposition (Pongsakornrungsilp,
Bradshaw, & Schroeder, 2008; Pongsakornrungsilp & Schroeder, 2011).
3. Viral marketing through Word-of-Mouth
Co-creation by consumer-generated advertising influences the words of mouth
effect in a way that campaigns become viral. For example Doritos used the fans on
social media to give ideas about a new ad for the chips. The fans immediately reacted
to this and shared the question to many others. Doritos just had to pick the one that was
liked the most and created the ad. Immediately after they posted the ad on the internet
people started sharing, first of all because the idea was given by a normal person from
the fan page and second of all they learnt about what their target group likes the most.
With the ads they made in 2011, 2012 and 2013 they have been awarded for the Super
Bowl contest for best ad because of the great engagement with their fans who are proud
of themselves creating this ad Benjamin Lawrence (2012).
Figure 4. Word-of-mouth
4. Impact of social media on co-creation
Research indicates that social media could have a large impact on co-creation
(Piller, Vossen, & Ihl, 2012):
Impact of social media on the lead user method, which is a method to get
information from specialist users (lead-users) in the fuzzy front end of
innovation or the generation phase of innovation.
Impact of social media on toolkits for customer co-design, which focuses
on using the crowd – average consumers, not lead users – to participate in
Impact of social media on solution contests, where organizations
(seekers) set out contests for users (solvers). It has shown to be highly
effective in problem solving when it comes to technical problems,
therefore focusing rather on incremental innovation instead of radical
Impact of social media on ideation contests, which focuses on the same
group as the foregoing impact, however more on the ideation phase of
Co-Creation in the far future. Besides co-creation in the near future, this article
also depicts some interesting insights regarding co-creation in the far future:
As part of this research, several entrepreneurs and specialists in the field of co-
creation have been interviewed.
“Co-Creation is booming”: Buuron (2013) expects that a lot of organizations will
work with co-creation in the upcoming years. To citate: “first of all just the
innovative clubs/groups are focusing on it, but this is going to change. We just
reached the era that we can say: Co-Creation-is-so-new-that-it-is-in-the-
newsletters-phase” (Buuron, 2013).
Every kind of organization will work with co-creation: “I expect that every kind
of organization will work more with co-creation. Even the small ones.” (Kapitein,
“The major development is the professionalization of the implementation of co-
creation. The brainstorming is often the first step of co-creation. This is innovative
and fun and appeals to a certain type of people very (creative, innovative, fast,
curious, open attitude to everything, etc.). Next, the ideas are realized. You'll need
other people and often complementary skills (solid, solution, open communication,
doers, go-getters and 'finishers'). In co-creation projects, these type of people to
cooperate well with each other and in a professional manner. For small businesses
are less different people and departments in the entire co-creation process
involved. The implementation of the co-creation is therefore less complex for
them than for large organizations. So I think co-creation for small businesses is a
great opportunity to successfully do Innovation.” (Kapitein, 2013).
“Social media helps to involve stakeholders quickly and easily to co-create. Here
are some very useful tools and platforms too. Although those are just the
resources.” (Kapitein, 2013).
2. Co-creation in education
Schools are implementing participation by co-creating and co-designing. Avans
University for Applied Science in ‘s-Hertogenbosch offers education in co-creation.
This is done by offering a variety of platforms and form small co-creation teams to
send in a concept or a design which will be presented and rated. More schools will
follow this way of education in the future. Whether it’s in educations of design,
research or programming co-creation can be used (Sanders & Stappers, 2008).“The
links between social sciences and design are getting stronger and several schools are
including participatory design techniques, etnography and pychology into the
curriculum of industrial design engineers” (Sanders & Stappers, 2008). Industrial
designers are shifting from product development to design researchers while co-
creation platforms make it much cheaper to get the right designs and schools will
eventually offer to do it for free to work on their curricula.
3. Ecosystem Co-Creation
Pitelis and Pitsa (2011) have constructed a theory that indicates that co-creation is
not just applicable on product and service innovation, but also on markets and
ecosystems as a whole. They argue that co-created ecosystems enable entrepreneurs
within these ecosystems to make stronger use of co-creation. As an example they name
Apple, “In this context, and in line with Schumpeter, Apple’s innovation is aimed at
both value creation and value capture by co-creating and leveraging a business
ecosystem. […]Apple helped in creating the backbone of this market by organizing and
bringing a consciousness to the players behind it in the supply chain.” (Pitelis & Pitsa,
2011). Another example would be Starbucks: “As in the case of Apple, Starbucks
helped create the market infrastructure which secured that coffee of high quality would
reach the consumer (ibid). This is not just an instance of opportunity co-creation but
rather one of market and ecosystem co-creation.” (Pitelis & Pitsa, 2011).
Expectations are that market and ecosystem co-creation will play an increasing
role for businesses in the far future.
4. Future ways of innovation:
Mediation and coordination. Because there are so many things
tracked organization started tracking what media works in what culture on
what period of time. To innovate on consumer base, organization will
need to know more and more about the interests of the consumer and this
gives the opportunity to see where innovation can have the greatest
(value) impact. When everyone has smartphones with GPS tracking this
can be seen as larger opportunities.
Wider participation. Participation is going to more more widespread,
from everywhere over the world people can participate over the internet,
whether its a graphic designer in Russia or a researcher in Hongkong we
are more and more connected and this will lead to a wider participation
(also with the fact that schools are focusing on real projects to participate
in) (Sanders & Stappers, 2008).
Changing motivation. The market is more and more customer-driven,
because the true value of a market offering can only be evaluated through
the lens of the customer. Its focus is not only on what to offer but on the
customers’ value creation processes, in which value for customers
emerges (Grönroos, 2008; Moeller, 2008)The focus used to be on what
customers purchase rather than what they actually do, it is focused on the
passive customer. The proactive market orientation asks for a firms
attempts to discover, understand and satisfy the expressed need of its
customers. This can be accomplished (with co-creation as in a way) to
work closely with lead users (Narver, Slater, & MacLachlan, 2004).
5. Crowdsourcing as an integrated part of the innovation process
Crowdsourcing can be used in different ways in the innovation process, whether
organizations are searching for high–value solutions for complex or novel probems, a
collaborative community to generate insides about the consumer, encouraging
innovations with your core products and work efficiently and flexible to descrete tasks.
Whether you need help in searching the right information, the right solutions for
innovative users about core products and a higher efficiency and flexibility finding the
right persons for discrete tasks crowdsourcing offers it all (Kevin J Boudreau &
Lakhani, 2012; Kevin J. Boudreau & Lakhani, 2013). See the figure below.
Figure 5. crowdsourcing as an integrated part in the innovation process.
Co-creation and crowdsourcing are terms that are expected to be more and more
used in todays and future business. Trends tell us that the interest and awareness is
growing fast and that this is confirmed by all the positive stories, the already succeeded
innovations through co-creation and the way we consume our products and services
these days. Organizations will run differently with this new form of co-creation
leadership and the crowd will have a fundamental role in the existence of a long lasting
consumer driven market. With the revolution of the internet it all started and future
innovation will be more connected, more contesting and with more teamwork than ever
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