According to Don Tapscott and Anthony D. Williams, collective intelligence is mass collaboration. In order for this concept to happen, four principles need to exist;
- Sharing ideas and intellectual property: though these resources provide the edge over competitors more benefits accrue from allowing others to share ideas and gain significant improvement and scrutiny through collaboration.
- Horizontal organization as with the ‘opening up’ of the Linux program where users are free to modify and develop it provided that they make it available for others. Peering succeeds because it encourages self-organization – a style of production that works more effectively than hierarchical management for certain tasks.
- Companies have started to share some ideas while maintaining some degree of control over others, like potential and critical patent rights. Limiting all intellectual property shuts out opportunities, while sharing some expands markets and brings out products faster.
- Acting Globally
- The advancement in communication technology has prompted the rise of global companies at low overhead costs. The internet is widespread, therefore a globally integrated company has no geographical boundaries and may access new markets, ideas and technology.
Research performed by Tapscott and Williams has provided a few examples of the benefits of collective intelligence to business:
- Talent Utilization
- At the rate technology is changing, no firm can fully keep up in the innovations needed to compete. Instead, smart firms are drawing on the power of mass collaboration to involve participation of the people they could not employ.
- Demand Creation
- Firms can create a new market for complementary goods by engaging in open source community.
- Costs Reduction
Mass collaboration can help to reduce costs dramatically. Firms can release a specific software or product to be evaluated or debugged by online communities. The results will be more personal, robust and error-free products created in a short amount of time and costs.