The impact of crowdsourcing on the economy (a sequel)

To my surprise my blog post on ‘the impact of crowdsourcing on the economy’ ranks third in terms of number of visits to this blog. After all, this was merely a simplistic thought experiment, aching for some further thought. Furthermore, it focused a bit too much on the negative aspects. If you think it through, even Cloud Computing would have the same effect on the overall economy as what I described for crowdsourcing. Time to give it some further thought.

For sure, ever increasing automation are a threat to ‘human work’ (see Marcel Warmerdam’s latest article), and the digitization of our world will exacerbate the polarization of work (see the latest blog post of Ross Dawson), but surely there must be a middle way to these dawn scenario’s. To me, crowdsourcing would be right in the centre of a brighter outcome.

Let me propose a rather radical scenario to make my point. Let’s say that –because of automation and outsourcing to remote countries- all companies would leave a given country. Instead of working for these companies, people will now make a living with what they are good at: creative input in crowdsourcing projects, or researching for open innovation projects. Of course, they would not earn as much as when they worked for companies, but let’s say they would earn enough to live decently.

The overall economy, as shown from the example beneath and measured by GDP, would decline with about 70%, but would this really be dramatic? After all, there would be full employment, and people will likely lead happier and more fulfilling lives earning money with their real skills or passions, choosing from projects they are most interested in, getting rewarded when they truly deliver added value, and enabling a work-life balance of their own liking.

Of course, there are some problems with this. Will government income be sufficient to fulfill its core functions (health care, education, infrastructure, …) and, with no corporate profits to invest, will the economy still be able to innovate and, well, grow?

Hm, the hidden point of the scenario here above is probably this: should an economy grow at all, and should we still be measuring ‘growth’ by an approximate indicator such as GDP?