Open Collaboration for Innovation: Principles and Performance

The principles of open collaboration for innovation (and production), once distinctive to open source software, are now found in many other ventures. Some of these ventures are internet-based: Wikipedia, online forums and communities. Others are off-line: in medicine, science, and everyday life. Such ventures have been affecting traditional firms, and may represent a new organizational form. Despite the impact of such ventures, questions remain about their operating principles and performance. Here we define open collaboration (OC), the underlying set of principles, and propose that it is a robust engine for innovation and production. First, we review multiple OC ventures and identify four defining principles. In all instances, participants create goods and services of economic value, they exchange and reuse each other’s work, they labor purposefully with just loose coordination, and they permit anyone to contribute and consume. These principles distinguish OC from other organizational forms, such as firms or cooperatives. Next, we turn to performance. To understand the performance of OC, we develop a computational model, combining innovation theory with recent evidence on human cooperation. We identify and investigate three elements that affect performance: the cooperativeness of participants, the diversity of their needs, and the degree to which the goods are rival (subtractable). Through computational experiments, we find that OC performs well even in seemingly harsh environments: when cooperators are a minority, free riders are present, diversity is lacking, or goods are rival. We conclude that OC is viable and likely to expand into new domains. The findings also inform the discussion on new organizational forms, collaborative and communal.

💡 Research Summary

This paper analyzes the principles and performance of open collaboration (OC), highlighting its expansion from open source software to various areas such as Wikipedia, online forums, medicine, science, and everyday life. OC is characterized by participants creating economically valuable goods and services, exchanging and reusing each other’s work, working purposefully with minimal coordination, and allowing anyone to contribute or consume freely. These principles distinguish OC from traditional organizational forms like firms or cooperatives.

The paper proposes that OC serves as a robust engine for innovation and production, affecting traditional businesses and potentially representing a new form of organization. To understand the performance of OC, the authors develop a computational model combining innovation theory with recent evidence on human cooperation. They investigate three elements impacting performance: participant cooperativeness, diversity of needs, and the degree to which goods are rival (subtractable).

Through computational experiments, the paper finds that OC performs well even in challenging environments where cooperators are few, free riders are present, there is a lack of diversity, or goods are rival. The findings suggest that OC is viable and likely to expand into new domains. This research also contributes to discussions on emerging organizational forms, emphasizing collaborative and communal structures.

The paper concludes by asserting the viability and potential expansion of OC into various sectors, reinforcing its role as an innovative and productive model for modern organizations.