Knowledge Map of the Virtual Economy: an Introduction

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Presentation introducing the World Bank virtual economy report, which is available at http://www.infodev.org/en/Document.1076.pd. …

Presentation introducing the World Bank virtual economy report, which is available at http://www.infodev.org/en/Document.1076.pd.

Delivered at the FPD Forum, 7 April 2011, Washington D.C.

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  • Employs 400,000 people in China, Vietnam and a number of other developing countries
  • Outsourcing aimed at individualsRemote work, distance between customer and worker, facilitated by mobile technologyYouth employmentAdditional income

Transcript

  • 1. Knowledge Map of theVirtual Economy
    Dr. Vili Lehdonvirta, University of Tokyo / HIIT FPD Forum, 7 Apr 2011, Washington DC
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. 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
  • 6. Sectors of the Virtual Economy
  • 7. Sectors of the Virtual Economy
  • 8.
  • 9.
  • 10. Professional gaming studio outside Beijing, China. Photo: Jared Psigoda
  • 11. 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
  • 12. Sectors of the Virtual Economy
  • 13. 13
  • 14. 14
  • 15. Sectors of the Virtual Economy
  • 16. 16
    Microtask Ltd
  • 17. Microwork
    Samasource workers in rural Kenya. Photo: Samasource
  • 18. 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
  • 19. Microwork vs. crowdsourcing
  • 20. Current development impact
    20
    Third-party gaming services value chain
    Infrastruct. provider
    <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
  • 21. Future development potential
    21
    Third-party gaming services value chain
    Infrastruct. provider
    <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?
  • 22. Potential upgrading strategies
    22
    Important enabler in least-developed countries: mobile technology
  • 23. 23
    Converting the Virtual Economy into Development Potential: Phase 2
    MobileMicroworkChallenge
    Photo (CC) by whiteafrican
  • 24. 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
  • 25. 25