What economists can’t still figure out to the point of not making sense to them is what motivates members to contribute their time and talent in Web 2.0 communities mostly for free. In many peer production communities, in fact, productive activities are voluntary and nonmonetary. They are voluntary in that people contribute to these communities because they want to and they can. They are nonmonetary because most participants don’t get paid for their contributions. Just because people don’t get paid to participate in peering does not mean , however, that they do not benefit from their participation in other ways.
This idea of giving talented intellectual capital away to anyone seems to violate common sense, as people tend to assume, erroneously, there must be a market discipline to force-fill all the little economic nooks to which nobody has a “romantic” attachment. Falling in the economists’ trap of only seeing as valuable any activity that has direct monetary value is a common stereotype, but it’s not the case here. In fact, economical theories which set opportunity-costs into resource allocation, do not give support to the idea of time, considered a scarce resource, being spent on non-remunerative activities; instead, an understanding of motivational drives is provided to support this apparently contradictory behavior, together with the innovative standpoint of “spare cycles” . If this phenomenon doesn’t strictly fit any economical model to explain members’ behaviour, the outcome of their efforts has substantial economic value, since it affects many industries’ competitive dynamics and business models. Henkel and von Hippel (2003) claim that end users of open source benefit by sharing their innovations too.
Peer production leverages basic human motivations and people participate for a wide range of intrinsic and self-interested reasons, as Lakhani and Wolf’s (2005) Web-based survey proves. The motivations for participating are ultimately much more complex than fun and altruism. It is very clear that programmers are sufficiently motivated by the meritocratic benevolence to go and create works of enormous quality and value. Linus Torvalds, founder of the Linux project, argues that programmers devote huge parts of their lives to building a software without any direct monetary compensation because “ for an engineer, solving some technical problem… it’s so exhilarating”. The fact that they write “for free” is the proof that they are positively interested in what they’re doing, and the interest itself is the best payment in the world. People basically love it, and they feel passionate about their particular area of expertise.
Lerner and Tirole (2002) argue that developers of open source programs acquire a reputation, which is eventually rewarded in the job market. Participating in open projects gets people experience, exposure and connections, and if they’re good, they can earn status within the community that could prove to be highly valuable in their careers. While the direct economic return may not appear to justify the effort, the prospect of actively demonstrating one’s skillset for an interested public, many members of which work in talent-hungry organizations that pay real salaries, is an attractive one. Why wasting time submitting CVs, when it’s possible to cultivate an audience of potential employers intimately familiar with your talents? If participating into a community is a successful means of establishing your own credentials, then, ultimately the talent will be noticed and the talented people will move into positions in which their time will be better applied to other pursuits, even economically rewarding, in which they have greater advantages than they have in participating for free. Ultimately, we want the smartest people to devote themselves to something appropriate to their unique talents, even if participating into a community may serve as a temporary role in helping those people move into positions in which the value of their intellect can be fully exploited.
It must be said that what is ultimately left out of all these utility equations is the ego-gratification that comes from being a popular member. Most research in this setting has analyzed egocentric networks (i.e., the relationships of one focal actor with other actors). Because participating into such communities is such a personal pursuit, with strong and immediate ego-rewards, it can be irrationally seductive. The hazard – and this applies as well to disciplines beyond economics – is that extraordinarily talented individuals may end up spending more time here than they should, even though their comparative advantage is smaller here than it is elsewhere.
To give major sustain to the perspective here presented, Anderson (2006) introduces the theory of spare cycles, which assumes that “spare cycles are the most powerful fuel on the planet and it’s what Web 2.0, with its user-generated content, open source communities and social network like YouTube, or Facebook are made up of”. People may wonder how Wikipedia magically arose from nothing, and how 50 million bloggers suddenly appeared, almost all of them writing for free. Spare cycles is essentially free time, which is spent interacting online, whose cost opportunity depends on factors as primary job’s satisfaction and ego gratification. The guy which plays Solitaire on his laptop at the airport is “spare cycles” and if we consider it multiplied times millions, it’s a huge amount of free time, which has found a natural outlet on the Web. Who has that time and that energy and that passion? The answer is, we do: for seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game, a prominent US journal has nominated “Person of the Year for 2006” you, which is ultimately us all.
Tapping this unlimited source of human and intellectual capital for free is what enterprises, government and society in general are called to act upon. This content is also being generated for work, for fun while at work, and for fun from home and it does represent an amazing proliferation of human energy. Clay Shirky has observed that time spent online is very likely coming out of the time that used to be spent watching television. Nielsen tracking research shows that the time people spend watching TV continues to *increase* even as the time they spend online also goes up.