Knowledge Map of the Virtual Economy: an Introduction

Knowledge Map of theVirtual Economy
Dr. Vili Lehdonvirta, University of Tokyo / HIIT FPD Forum, 7 Apr 2011, Washington DC

Contents
Introducing the Knowledge Map of the Virtual Economy
What do we mean by “Virtual Economy”?
What are some of the industries in the VE?
What is the development potential of the VE?
Mobile Microwork Challenge
Preview of an upcoming infoDev competition
2

KMVE: Research process
Assignment: “Development potential of the Virtual Economy”
August 2010 –> January 2011
Two researchers + research assistants
Literature review (academic, market studies)
13 interviews, one survey, data from a corporate database
Workshop at ICTD 2010
Peer review
3

The Demand
Users desire goods and currencies in online games, social networks, etc.
Brands are after Facebook likes, Twitter followers, Digg votes, etc.
E-commerce sites need digital microwork, such as tags on images, transcriptions of scanned forms, de-duplication, etc.
= “Virtual assets” that are valuable to someone, yet scarce
4

The Supply
For each of these virtual assets, there is an emerging industry that supplies it
The production, exchange and use of scarce virtual assets = the virtual economy
5

Sectors of the Virtual Economy

Professional gaming studio outside Beijing, China. Photo: Jared Psigoda

Third-party gaming services
Total revenues: $3.0 billion (2009)
Approx. 100,000 full-time equivalent workers
Involves negative externalities
Net social value can be negative
Legal status contentious
Game operator
Producer
Customer
Retailer

Sectors of the Virtual Economy

16
Microtask Ltd

Microwork
Samasource workers in rural Kenya. Photo: Samasource

Microwork industry
Infrastruct. provider
Client
Microworker
Work aggregator
Work transformer
Emerging industry; some benchmarks for potential market size:
Paid crowdsourcing: $500 million (2009)
IT and business process offshoring: $92-$96 billion (2009)
No negative externalities: 100% positive contribution to society

Microwork vs. crowdsourcing

Current development impact
20
Third-party gaming services value chain
<30%
Client
Microworker
0-70%
Aggregator
10-30%
Transformer
20-60%
Game operator
<1%
Producer
70%
Customer
Retailer
30%
Microwork value chain
Compared to e.g. the global coffee industry ($70 Bn in 2002), the amount of real money circulating in the virtual economy is modest
But most earnings in the VE are captured by the producers -> significant development impact
in the coffee industry, producing countries capture less than 10% of total revenues

Future development potential
21
Third-party gaming services value chain
<30%
Client
Microworker
0-70%
Aggregator
10-30%
Transformer
20-60%
Game operator
<1%
Producer
70%
Customer
Retailer
30%
Microwork value chain
In the future, wage competition is likely to limit producers’ income (low entry barriers)
In the gaming services industry, developing countries have been able to move up the value chain towards customer-facing functions
Can developing countries achieve the same in the microwork industry?

Potential upgrading strategies
22
Important enabler in least-developed countries: mobile technology

23
Converting the Virtual Economy into Development Potential: Phase 2
MobileMicroworkChallenge
Photo (CC) by whiteafrican

Mobile Microwork Challenge
Online competition organized by infoDev to speed up the development impact of microwork in least-developed countries
Challenge: develop new concepts for mobile microwork
What problem is addressed, who is the customer?
How is the problem addressed by microworkers using mobile (feature/smart)phones?
Winning concepts awarded support for implementation and piloting
Accepting submissions opens in fall 2011
24

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http://www.engadget.com	1891
http://www.topzone.lt	742
http://virtualeconomyresearchnetwork.wordpress.com	247
http://www.virtual-economy.org	177
http://technologie.gazeta.pl	159
http://virtual-economy.com	149
http://metablogging.gr	148
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http://polygamia.pl	46
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url_unknown	40
http://translate.googleusercontent.com	39
http://localhost	38
http://virtual-economy.net	35
http://formulasparaganardinero.com	34
http://www.virtual-economy.net	30
http://managingglobalsourcing.blogspot.ie	29
http://www.slideshare.net	28
http://abtasty.com	24
http://3sheep.co.uk	20
http://constantingheorghe.blogspot.com	14
http://webcache.googleusercontent.com	14
http://paper.li	14
http://ermko.blogspot.com	8
http://www.constantingheorghe.blogspot.com	7
http://managingglobalsourcing.blogspot.co.uk	6
http://managingglobalsourcing.blogspot.com.au	5
http://www.newsblur.com	5
http://loc-wm.archive.org	3
http://economyvirtual.com	3
http://translate.google.com	3
http://www.linkedin.com	2
http://virtualeconomy.tumblr.com	2
http://newsblur.com	1
http://ranksit.com	1
http://managingglobalsourcing.blogspot.in	1
http://managingglobalsourcing.blogspot.com.es	1
http://www.copyscape.com	1
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http://havanna.scenegroup.fi	1
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http://www.multisoft.com	1
http://www.usabilidoido.com.br	1
http://www.d2b.com.br	1
http://aprendersociales.blogspot.com	1
http://www.casadikouros.gr	1
http://www.irekia.euskadi.net	1

Knowledge Map of the Virtual Economy: an Introduction

by Vili Lehdonvirta

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