Commons-Based Peer-Production Ushers Innovative Marketplace

"In 2002, Professor Benkler published a seminal essay with the provocative title "Coase's Penguin, or Linux and the Nature of the Firm." In Coase's Penguin Professor Benkler states that for decades we have lived with two major ways in which individuals organize economic production: "as employees in firms, following the directions of managers, or as individuals in markets, following price signals." What we are now seeing, he writes, "is the broad and deep emergence of a new, third mode of production in the digitally networked environment. I call this mode commons-based peer-production, to distinguish it from the property- and contract-based models of firms and markets. Its central characteristic is that groups of individuals successfully collaborate on large-scale projects following a diverse cluster of motivational drives and social signals, rather than either market prices or managerial commands."

Professor Benkler is essentially saying that collaborative innovation is a serious mode of economic production that has arisen because the Internet and related technologies and standards now permit large numbers of individuals to organize themselves for productive work, in a decentralized, non-market way."

"What is different today is that for the first time, in large part because of the Internet, we have the capacity to self-organize into groups fluidly and globally.

The firm is no longer the only -- or, in some circumstances, the optimal -- institution for organizing productive, value-creating work. And that promises a much more diverse and exciting -- and very innovative -- kind of marketplace."