The Economics of Crowdsourcing

The new constitution has brought about an optimistic attitude and a conducive business environment. With vigorous competition in various sectors, many large companies are now outsourcing jobs such as call center services, e-mail services, and payroll, services that might otherwise be performed by in-house employees. The media industry, for instance, has been utilizing citizen journalism to cut down on costs of covering the remote areas. The business environment has also been enhanced by the tremendous growth in the ICT sector; with the recent launch of the second Internet Exchange Point (IXP) in Mombasa. Moreover, mobile phones are now the most-dominant modern technology in the developing world, majority of cellphone subscribers live outside developed countries. Kenya has nearly 20 million mobile phone subscribers.

One form of outsourcing is crowdsourcing. Crowdsourcing is a process in which tasks usually done by employees in an organization, such as developing software, are outsourced to the public. By definition, a crowd is a large number of persons gathered together. In this context, we can consider a crowd as a large number of talented and intuitive technologists in the public. The idea behind crowdsourcing is to involve the public in running activities of an organization. This could be for two purposes; to reduce operational costs or to create public ownership. What makes crowdsourcing economical is the broad participation that takes place at relatively no costs. Solutions and ideas are generated from volunteers or professionals in public who get paid only if you use their ideas. Sourcing tools, such as the Internet and mobile phones, gives an opportunity for the populace to participate.

The most prosperous crowdsourcing venture in Kenya has been the mobile crowdsourcing. Typically, mobile phones are easy to use while uses text messages or Unstructured Supplementary Service Data (USSD) require low bandwidth. In particular, the Ushahidi Engine is a platform that has allowed anyone to gather distributed data via SMS, aggregating information from the public for use in crisis response. The platform is probably the most popular crowdsourcing project. A similar project is ‘Txteagle’, founded by Nathan Eagle, a visiting assistant Professor at the MIT Media Lab. Txteagle is a service that enables mobile phone subscribers to earn money and accumulate savings by completing simple micro-tasks for large corporate clients. This is how it works: a client sends txteagle a task; the task is deconstructed into micro-tasks which are matched to users; the micro-tasks are sent to users using SMS; txteagle tracks responses until confidence is reached; the task is reconstructed and send to the client; finally, the users are paid in airtime or mobile money.

Mocality, a mobile-based and crowd-sourced business directory, is another illustration of mobile crowdsourcing in Kenya. Mocality operates out of Cape Town in South Africa but was recently launched in Kenya with over 10,000 businesses listed at this time. Using the Mocality website agents sign-up, enlist a business premises and are remunerated for entering new business listings once they are verified. The agents, over 60 agents working in Nairobi, are using paid via mobile money. Ways of enlisting a business premises include via the mobile web, email, a J2ME app, an iPhone app, SMS and web browser. Listed businesses in the Mocality database are then provided with 400 free SMSs per month for sending promotional messages to their customers.

Idea Bounty is also a platform for crowdsourcing based in South Africa. Creative ideas are shared in exchange for a reward, or Bounty. Idea Bounty is a social think tank that provides a secure channel for the world wide creative community to offer solutions to creative briefs. Clients are able to post creative briefs detailing their requirements. Only the creative (the person who submits the idea) and the client can see the idea. Idea Bounty reviews ideas to ensure they meet the briefs requirements. The clients review the submissions and select the best idea as the Bounty winner. A reward or 'Bounty' is offered for the idea that best answers the brief and the contributor of the winning idea gets the cash. Clients can only use Ideas that they pay the creative a Bounty for.

Another example from South Africa is IS (Internet Solutions) Labs. Internet Solutions (IS) Ltd a converged communications service provider based in South Africa. IS Labs provides a platform for individuals to submit their ideas on how to improve the internet in South Africa. The ideas are rated, discussed and reviewed. The best ideas receive support from IS Labs and are developed. This ensures the innovative ideas for provision of Internet services are harnessed from the general public. Crowdsourcing has proven to be one of the economical ways of harnessing talent and provides employment to thousands of young people.