Peer Production and Open Source

This week’s topic involves benefits, issues and opportunities created by peer production and open source.

Peer production and open source have become popular practices in business environment and social media. With opportunities that are created by development of numerous networks and softwares, we are able to share ideas and knowledge.

All three articles relate to open innovation. An interview with Marten Mickos from Management Review discusses the relevance of open source innovation from business perspective of MySQL, world’s leading database vendor. The interviewer argues that innovation should not only be open-source based. Initially, product creation shuld not originate from contributors because they do not possess enough experience and knowledge. However, many ideas and tips from contributors generally result in great improvements or motives for creating products.

The second journal written by M. Zhang and F. Zhu, investigates motivation and incentives of free contributors. The authors conducted a research at Chinese Wikipedia from which they concluded that contributors are driven by social needs.

Eric von Happen and Georg von Krogh propose a “private-collective” model of innovation. It combines two commonly used models: private investment and collective contribution and their most beneficial attributes. In addition, if the size of a group decreases, so does the general performance of participants. Yet, it might be argued that we cannot simply assume that that the primary objective of all contributors is the need for socializing. Since the research is limited to online public services, the generalization is not valid for business environment as a whole. In case of scientific or technological research, the objective of innovation is driven by curiosity or personal goals rather than social needs. Moreover, the authors admit that the idea of “social effects” is too complex to precisely identify researchers’ motives.

Open innovation can be implemented more easily in technology or product creation. However, the real challenge for organisations arises in industries related to services. Nowadays, it has become less problematic to innovate a product thanks to social media channels and networks. How can services use open innovation in order to increase their capabilities? Therefore I decided to find a joournal that would elaborate on effective ways of implementing open innovation in the service sector. There are three ways to promote open innovation in the service sector:

  • services should work closely with their customers in order to create solutions to problems
  • organisations should focus on utility rather than product itself
  • companies should become more engaged in customer’s organisation and processes through serving an entire process a customer is undertaking.

My two mini-case examples were about Unilever and LEGO. Both companies managed to incorporate open innovation in their business models and benefit from the changes to a great extent.

In concluson, in order to encourage innovation, maintain high performance and discourage freelancing, companies need to make contributors feel awarded and appreciated. The companies should collaborate with customers in order to solve problems, gain an insight in their needs and expectations that should be the vital concern of every firm that is willing to effectively use peer production and open sourcing.


Chesbrough, H. 2009. Bringing Open Innovation to Services. MIT Sloan Management Review 52(2) 85-90.

Hyatt, J. 2008. The oh-so-practical magic of open-source innovation. MIT Sloan Management Review 50(1) 15-19.

von Hippel, E., and von Krogh, G. 2003. Open source software and the “private-collective” innovation model: Issues for organization science. Organization Science 14(2) 209-223.

Zhang, M. and Zhu, F. 2011. Group size and incentives to contribute: A natural experiment at Chinese Wikipedia. American Economic Review 101(4) 1601-1615.


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