The gig economy as a driver of innovation

If you are reading this article, chances are you have taken an Uber, are familiar with Upwork and maybe even sold something on Etsy. Business models that fall under the “gig economy” umbrella have been proven for business-to-consumer and peer-to-peer markets because they make it possible to crowdsource products and services from huge communities of people.

Large online networks can also be some of the greatest sources of innovation. Led by the enterprise and government research and development verticals, this trend is growing rapidly because of a shift in focus from single-point services to the co-creation (collaborative innovation) model.

Bullish on innovation and crowdsourcing

Some of the most novel case studies and applications of innovation and crowdsourcing are coming from unexpected places: large enterprises and government agencies. Driven by pressure for continued growth and tapping talent outside their workforce, large companies like Apple, IBM, GE and a host of others have launched prize challenges seeking innovative ideas, products and software solutions.

Even the U.S. government is launching challenges at an unprecedented rate. A recent report by Deloitte estimated that more than $60 million in prizes was offered through the platform. The annual America COMPETES progress report released by the White House Office of Science and Technology Policy reported that 17 agencies launched prize challenges in 2014 — seven of them being first-timers. This increased activity has contributed to a growing market for innovation and crowdsourcing capabilities, resulting in a recent $20 million worth of open innovation service contracts with NASA.

Re-imagining early-stage innovation

As the market for innovation and crowdsourcing continues to grow, the enterprise customer is searching for co-creation frameworks that can deliver real value. One such framework is the Catalyst model that I co-founded and implemented at the Department of Energy, Office of Energy Efficiency and Renewable Energy (EERE).

Catalyst builds real startups with prototypes from communities of innovators. Best suited for early-stage innovation in verticals where prototyping is inexpensive, Catalyst links a community of energy entrepreneurs (using the IdeaScale platform) to a community of developers and designers in Appirio’s Topcoder platform.

Catalyst delivers real value through a four-step co-creation framework: (1) ideation to find the top pain points and wish list of a specific vertical, (2) team formation anchored by a business solution addressing the pain points or wish list, (3) rapid prototyping using crowdsourced software development and (4) incubation where teams are incentivized to grow and scale.

The framework has been one of the few in open innovation to successfully link ideation to incubation and has been shown to be scalable across EERE, garnering funding in two rounds from the Solar Energy Technologies Office and the Building Technologies Office.

In 2015, a $2 million prize backed 36 early-stage teams with prototypes and was shown to be 2x as fast and 10x as cost-effective to comparable phase I and phase II Small Business Innovation Research grants. In addition to media coverage from non-traditional outlets like TechCrunch, the program won a host of accolades, including the 2015 International Society for Professional Innovation Management Grand Prize.

Super-community manager wanted

With increasing enterprise investment being made in innovation and crowdsourcing, a new workforce with new skills will be needed to deliver results from co-creation business models. In recent years we have seen the rise of the community manager, whose duties can range from growth hacking to improvement of the community.

With co-creation it is necessary to have a super-community manager (manager of multiple community managers) whose concern is not only engagement, but integration. Crowdsourcing and crowd-powered tools have been described by Peter Diamandis to be an exponential technology because of the exceptional access to innovation and enablement that they provide.

Now, imagine the value of the new “gig economy” where communities of exponential capability not only deliver unique solutions, but their collaboration has a force multiplier effect that delivers game-changing innovation.