What are these things called "crowdsourcing" and "crowdfunding"...

The global economy and Internet communities are evolving so quickly that current language has to evolve with them. "Crowdsourcing" is a new social phenomenon where tasks that were generally performed in-house or contracted out are now being offered up to the public, in an open call forum. These types of tasks can be scientific, technological, creative, political or retail oriented but don't stop there. An example that doesn't fit the above categories is the State of Texas which is installing cameras along the Texas/Mexico border and allowing anyone with an Internet connection to monitor the border and report possible immigrants to agents. Wikipedia offers numerous examples of crowdsourcing here.

Crowdsourcing is similar in some ways to "open source" (which Wikipedia itself is) which is defined here as "the creative practice of appropriation and free sharing of found and created content". It takes it to the next, more human level. Crowdsourcing allows the task managers to tap into an endless pool of human intelligence and creativity, but it isn't without it's controversy. The projects, due to size, can become unwieldy and more expensive than expected, OR crowdsourced volunteers may not be compensated at all. There are no contracts, thus expectations that volunteers follow through or won't share information with competitors should be kept to a minimum.

Crowdfunding is what it sounds like. A project is funded, through relatively small donations, by a large group of like-minded individuals. My Football Club, is 50,000 football fans who are purchasing a football club and will give "owners" input into the management of the team via democratic process. Or, take another example, Beer Bankroll which explains their idea like this:

"We've become fascinated with the concept of crowd funding. The idea that people can come together in a community based format and create a company sounded like an exciting concept. We also enjoy beer, so the choice was clear...we've decided to create an online community for beer lovers to share their ideas and at the same time create a brewing company.

How do we start on this journey you may ask? Well, the first step is to raise enough capital to start a brewing company. We are not looking to become huge right away or even within several years. The smart way to attack a project like this is to start relatively small and build into something special. Within a few years, with the power of people like you backing our company, we want to compete with breweries like Dogfish Head Brewery and Pyramid Brewery among others. Eventually, down the road, we hope to become a brewery with a name that is recognized worldwide."

Both crowdsourcing and crowdfunding are spin-offs of the huge social networking advances that have take hold of the Internet and will likely morph into something completely different and unexpected in the next few years.

Image courtesy of ZDNet

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