Source
Jeff Howe describes Crowdsourcing as the “act of taking a job traditionally performed by a designated agent and outsourcing it to an undefined, generally large group of people in the form of an open call”. Basically, this means that customers, or interest groups, are involved online in the entire process of a product or service from the development to marketing (Hannestreichl).
However, crowdsourcing does only work, if a company is willing to involve customers, and interest groups into their processes. Some companies have an own R&D department that takes care of the development of products and resources. They might be less willing to ask customers for ideas and solutions (Hannestreichl).
A good example for crowdsourcing is the global online network InnoCentive. InnoCentive stands for “global web community for open innovation, enabling scientists, engineers, professionals and entrepreneurs to collaborate to deliver breakthrough solutions for innovative R&D-driven organizations.” Those specialists meet in the online community to solve various problems, delivering innovative problem solutions. Another example is Wikipedia, where everyone can publish and share information with an online community.
Personally, I never heard the term “crowdsourcing” before. However, it seems to be an interesting and innovative approach to involve customers into the product development process; not only via market research, or market analysis, but by active participation. The potential for companies to find innovative and creative ideas and solutions for the business seems very strong. Thus, companies using this relatively new approach can gain a high competitive advantage.