Crowdsourcing & Open Innovation

The Laboratory of Innovation Science at Harvard is currently working on a number of studies, experiments, and projects that center around Crowdsourcing & Open Innovation. Such initiatives allow for the optimization of research for solutions to complex problems by calling on the crowd, instead of limiting knowledge to what is available within an organization.

Listed below are some examples of research which have greatly benefited from utilizing exterior knowledge and not limiting resources to those employed in-house, including a number of crowdsourcing challenges from our partners at NASA, the Broad Institute, and others. Browse LISH’s Crowdsourcing & Open Innovation projects and papers below.

If you are looking to run a crowdsourcing challenge, LISH's Find A Crowdsourcing Platform can help you find a platform that meets your needs.

Publications

Karim R. Lakhani and Greta Friar. 2015. Prodigy Network: Democratizing Real Estate Design and Financing. Harvard Business School Teaching Notes. Harvard Business School. Publisher's VersionAbstract

Teaching Note for HBS Case 614-064.

This case follows Rodrigo Nino, founder and CEO of commercial real estate development company Prodigy Network, as he develops an equity-based crowdfunding model for small investors to access commercial real estate in Colombia, then tries out the model in the U.S. U.S. regulations, starting with the Securities Act of 1933, effectively barred sponsors from soliciting small investors for large commercial real estate. However, the JOBS Act of 2013 loosened U.S. restrictions on equity crowdfunding. Nino believes that crowdfunding will democratize real estate development by providing a new asset class for small investors, revolutionizing the industry. The case also follows Nino's development of an online platform to crowdsource design for his crowdfunded buildings, maximizing shared value throughout the development process. Nino faces many challenges as he attempts to crowdfund an extended stay hotel in Manhattan, New York. For example, crowdfunded real estate faces resistance from industry leaders, especially in regards to the concern of fraud, and SEC regulations on crowdfunding remain undetermined at the time of the case.

Karim R. Lakhani and Greta Friar. 2015. Nivea (A) and (B). Harvard Business School Teaching Notes. Harvard Business School. Publisher's VersionAbstract

Teaching Note for HBS Cases 614-042 and 614-043.

The first case describes the efforts of Beiersdorf, a worldwide leader in the cosmetics and skin care industries, to generate and commercialize new R&D through open innovation using external crowds and "netnographic" analysis. Beiersdorf, best known for its consumer brand Nivea, has a rigorous R&D process that has led to many successful product launches, but are there areas of customer need that are undervalued by the traditional process? A novel online customer analysis approach suggests untapped opportunities for innovation, but can the company justify a launch based on this new model of research?
The supplementary case follows up on an innovative R&D approach by Beiersdorf, a skin care and cosmetics company. The case relates what happened to the product launched by Beiersdorf, to its Nivea line, following the events of the first case, and how the commercial success of the product informed thinking by leaders in R&D for the future.

Karim R. Lakhani and Greta Friar. 2015. Havas: Change Faster. Harvard Business School Teaching Notes. Harvard Business School. Publisher's VersionAbstract

Teaching Note for HBS Case 615-702.

As of 2013, Havas was the 6th largest global advertising, digital, and communications group in the world. Headquartered in Paris, France, the group was highly decentralized, with semi-independent agencies in more than 100 countries offering a variety of services. The largest unit of Havas was Havas Worldwide, an integrated marketing communications agency headquartered in New York, NY. CEO David Jones was determined to make Havas Worldwide the most future-focused agency in the industry by becoming a leader in digital innovation. The case explores the tensions within the company as David Jones attempts to change the company to compete in an industry undergoing digital transformation. The case uses the example of the acquisition of Victors & Spoils, a crowdsourcing advertising agency, to examine internal reactions.

Karim R. Lakhani. 2015. Innovating with the Crowd. Harvard Business School Case. Harvard Business School. Publisher's VersionAbstract

This note outlines the structure and content of a seven-session module that is designed to introduce students to the fundamentals of innovating with the "crowd." The module has been taught in a second year elective course at the Harvard Business School on "Digital Innovation and Transformation" and is aimed at students that already have an understanding of how to structure an innovation process inside of a company. The module expands the students' innovation toolkit by exposing them to the theory and practice of extending the innovation process to external participants.

Kevin J. Boudreau and Karim R. Lakhani. 2015. “'Open' Disclosure of Innovations, Incentives and Follow-on Reuse: Theory on Processes of Cumulative Innovation and a Field Experiment in Computational Biology.” Research Policy, 44, 1, Pp. 4-19. Publisher's VersionAbstract

Most of society's innovation systems – academic science, the patent system, open source, etc. – are “open” in the sense that they are designed to facilitate knowledge disclosure among innovators. An essential difference across innovation systems is whether disclosure is of intermediate progress and solutions or of completed innovations. We theorize and present experimental evidence linking intermediate versus final disclosure to an ‘incentives-versus-reuse’ tradeoff and to a transformation of the innovation search process. We find intermediate disclosure has the advantage of efficiently steering development towards improving existing solution approaches, but also has the effect of limiting experimentation and narrowing technological search. We discuss the comparative advantages of intermediate versus final disclosure policies in fostering innovation.

Kevin J. Boudreau and Lars B. Jeppesen. 2015. “Unpaid Crowd Complementors: The Platform Network Effect Mirage.” Strategic Management Journal, 36, 12, Pp. 1761-1777. Publisher's VersionAbstract

Platforms have evolved beyond just being organized as multi-sided markets with complementors selling to users. Complementors are often unpaid, working outside of a price system and driven by heterogeneous sources of motivation—which should affect how they respond to platform growth. Does reliance on network effects and strategies to attract large numbers of complementors remain advisable in such contexts? We test hypotheses related to these issues using data from 85 online multi-player game platforms with unpaid complementors. We find that complementor development responds to platform growth even without sales incentives, but that attracting complementors has a net zero effect on on-going development and fails to stimulate network effects. We discuss conditions under which a strategy of using unpaid crowd complementors remains advantageous.