By Birgitta Bergvall-Kåreborn & Anna Ståhlbröst, Luleå University of Technology, LTU. Presented at CSW Summit Arctic Circle 2015. Learn more and join us at our next event: www.crowdsourcingweek.com

1. Opportunities and Challenges with
Crowdsourcing in Smart Regions
Birgitta Bergvall-Kåreborn
Luleå University of Technology
Luleå
Birgitta.Bergvall-Kareborn@ltu.se
Anna Ståhlbröst
Luleå University of Technology
Luleå
Anna.Ståhlbröst@ltu.se

2. Agenda
• Smart Regions
• Living Lab
• Crowdsourcing: hobby, labor, work, or
exploitation
• The case of IoT Lab
• The case of Apple and Google
• Reflections

3. What do we mean by Smart Regions?
Smart refers to when investments and
innovations contribute to sustainable
growth with a high quality of life and a wise
use of natural resources through active and
open involvement of citizens

4. Strengths in our region
• Strong economical growth
• Entrepreneurial people
• Unique natural resources
• A magnificent nature
• Broadband for “all”
• Attractive living environments
• Changing and rich cultural life
• Collaboration between the university and the society
• Cold, Dark, Slippery, Snowy, Silent, Distances
• Small villages and cities –
shorter ways to decision, trust

5. Challenges for the region
• Geographical distances – most remote in Europe
• Decreasing population – decreasing tax income
• Growing amount of elderly– increased societal
costs
• Power structures –increase young peoples
influence
• Need of infrastructure (transport/IT/service)
• Cold, Dark, Slippery, Snowy, Peripheral
• Small villages and cities – many want their own
solution – unhealthy competition/protectionism

6. People
Places/spa
ces
Education
eHealth
Transport
eGovernment
Infrastructures
Living
eBusiness
Digitalization enabling a “smarter” region

8. Background of EnoLL
• Started to emerge in 2003 in
Europe
• About 420 Living Labs today
– Work in different thematic areas,
e.g. energy, e-manufacturing, e-
participation, rural LL
• EnoLL office situated in
Belgium, IBBT
– Yearly waves of LL recruitment
• Build on the assumption that
large user communities situated
in real-life contexts and build on
Public-Private Partnership can
support the innovation process

9. Living Lab – Quadrouple Helix
COMPANIES
RESEARCHERS
PUBLIC ORGANISATIONS
CITIZENS

10. Living Lab - An Open environment for
human-centric ICT development

11. Characteristics of Living Lab approach
• Design, test and experiment in real-life contexts
• Encourage humans (e.g. potential users) to be engage to
take active part in innovation processes form early
needfinding to market launch
• Design digital service innovation with humans and their
needs in the center
• Adopts an open approach and strives to elicit resources of
different types from the environment
• Partly distributed
• Multi-stakeholder involvement

12. Living Lab
A Living Lab is a user-centric innovation
environment, built on realistic activities
and research where all relevant partners
are involved in open processes, with objective
to generate sustainable values for LL partners
and stakeholders

13. Living Lab as a Milieu
• ICT & Infrastructure: the
role technology play in
innovation processes
• Management: ownership &
organisation
• Partners & Users: The
collective knowledge
• Approach: methods and
techniques for LL practice
• Research: learning and
reflections

14. Key-Principles in practice
Openness;
 Engage multi stakeholders to participate
 Openly share ideas and designs
 Have an open mind
Influence:
 The input from stakeholders must be used
 The results of the input should be communicated
 Users are active, competent partners and domain experts
Value
 Experienced value of the innovation
 Focus on understanding needs and motivators
 Values arising from experiences and reflection of use

15. Key-Principles in practice
Realism:
 Make real world implementations
 Stimulate real use situations
 Understand stakeholders different views on reality
Sustainability:
 Continuous learning – development of theories, models and
methods
 Minimise environmental impact by developing sustainable
innovation processes

16. Living Lab Activities
Happens wherever the people are or could be

17. Different types of involvement
Design for Users
Design with Users
Design by Users

18. Crowdsourcing –
Hobby, Labour, Work, or
Exploation

19. Crowdsourcing
• In 2006 Jeff Howe presented crowdsourcing as
a new level of outsourcing, arguing that instead
of sending jobs to countries such as India and
China, companies now outsource functions once
performed by employees to an amorphous and
generally large pool of individuals

20. Crowdsourcing
• In the beginning many of the crowdsourcing
activities were not perceived as ‘work’ in the
traditional sense, but interpreted as socialising,
blogging, or contributing towards creativity and
innovation.
• US Berkerlys SETI@home (lending processing
power from millions of computers to search for
extra terrestrial life)
• Wikipedia
• MySpace

21. Crowdsourcing
• Crowdsourcing are often portrayed as the
‘democratization’ of idea generation and as a
form of creative commons
• BUT the significant commercial value some of
these platforms have created is not shared
equally

22. IoT Labs: The power of the crowd
och IoT

23. Example: The Living Lab process of
citizens outreach and end-user involvement
User-recruitment
by invitation
User engagement
User interaction
and support
Dataanlysis
and closing
1. Define user-activities
2. Find people to be invited
3. Invite users and ensure
the right users to
be engaged
1. Choose users
2. Contact and commit
users
3. Formalize user-
involvement with the
individual users
1. Stimulate user-actions
2. Support users
3. Gather user-data
1. Analyse result
2. Finalize user-
involvment with
users
3. Report result to users
4. Archive user-data
Researcher/
Industry/Public auth.
propose investigations
?
LL user-panel
operator

24. Opportunities with crowdsourcing
in IoT Lab
• Empowerment of citizens
• Gather human data - Knowledge about peoples
movement etc, to accomplish social change
• Inspiration for future innovation/research areas
• Direct feedback on ideas, concepts, prototypes,
solutions from the crowd
• Creative and innovative research processes
• Real life experiences

25. Crowdsourcing & Privacy

26. Crowdsourcing
• Crowdsourcing are often portrayed as the
‘democratization’ of idea generation and as a
form of creative commons
• BUT the significant commercial value some of
these platforms have created is not shared
equally
• Huffington Post, launched in 2005, was sold to
AOL in 2011 for $315 million

27. Crowdsourcing as a labor model
• at iStockphoto a photo of typical size and quality can be
purchased, royalty-free from between 1-5 US dollars (50
dollars).
• The crowd photographers receive 20% of the purchased
price any time one of their images are downloaded.
 iStockphoto’s revenue increased with 14% per month in
2005 and they estimated a bulk of 10 million photos
available in 2006
 Many companies such as IBM and United Way, have
used iStockphoto for many years
• It is also clear that the contributions from crowd are
essential for the company.

28. Crowdsourcing
• In 2006 Threadless was selling 60.000 T-shirts a month,
had a profit margin of 35 percent, and were close to
gross $18 million, all with less than 20 employees.
• Winning designers receive $2000 but sacrifice all rights
to their design in the process.
• Over roughly five years Threadless has acquired 500
designs, about 15 percent of which have been reprinted
in response to demand within Threadless' community of
350,000 users

29. Crowdsourcing
• Elance-oDesk as an example reveals both the
scale of operations and global reach of crowd
employment platforms.
• 2013 more than two million businesses used the
site (Microsoft, Unilever, Walt Disney), with eight
million freelancers within 180 countries
completing asks and generating revenues
of $750 million.

30. Crowdsourcing
• Differences between crowdsourcing and
traditional workforce
– its flexibility in scalability and on-demand labor access,
– the broad range of skills and experiences of the workforce,
– the absence of physical job sites, work performed and
compensated entirely in cyberspace,
– involve many-to-many relationships between employees
and employers,
– the low reimbursement cost for jobs carried out, the low
overhead coast, low personal and administrative costs,
– lack of employment regulations and employer security

31. The Apple and Google Case

32. Apple and Google Case
• In 2008 Apple introduced a development and
distribution platform and the rest is history…
• Opened up a new market for micro and small
companies (before the carriers worked as gate
keepers)
• Platforms offer development tools, customer
base, strong brand, paying function, …
• Created a new market for the platform owners
and strengthened their existing products

33. The Apple and Google Case
• Hobby
– Some people watch TV, I develop software program
• Labor
– As a micro company one need to enter new markets early,
before the big companies take over
– I see it as competence development
– I have my normal job and do this on the side
• Work
– We moved our business to mobile platforms and apps
• Exploitation
– Why should we pay 30% of our revenues to the platform owner
when we create great value to the platform and take all the risk

34. Value Creation and Capturing
• Value creation enhanced by platform ‘
– “If third-party software applications and services cease
to be developed and maintained for the Company’s
products, customers may choose not to buy the
Company’s products” (Apple 2012: 13)
• Apple significantly increase their proportion of
value by avoiding the direct costs of software
development
• Apple extract rents of 30% of price or in-app
advertising revenue

35. Power asymmetries
• The platform owner:
– Is the one in charge
– future strategies are not disclosed; cyclical nature of IT
industry
– ultimately decides whether applications are permitted
on the App Store
– apps can be easily replaced and often have a short
shelf life, marketplace is crowded and highly
competitive

36. Reflections
• Based on Apple, Google, AMT, Task Rabbit
• Democracy
• Power asymmetry
• Value Creation and Value Capture
• Risk (Economic, Personal, Social)
• Hobby, Labour, Work and Exploitation