In 2006, Jeff Howe, a writer at Wired magazine, came up with a new concept for the Internet and he called it Crowdsourcing.

He defined Crowdsourcing as the act of outsourcing tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or community (a crowd), through an open call.

Crowdsourcing is a distributed problem-solving and production model. In the classic use of the term, problems are broadcast to an unknown group of solvers in the form of an open call for solutions. Users—also known as the crowd—typically form into online communities, and the crowd submits solutions. The crowd sometimes also sorts through the solutions, finding the best ones.

Crowdsourcing has, in just 4 years, become one of the defining trends for the next phase of the Internet. It utilizes the vast social networks and community oriented platforms that Web 2.0 unleashed to harness the collective power of the masses to solve discrete and complex problems- the kinds of problems that a whole host of middle men, consultants, agencies and advisers traditionally solved at great cost.

Crowdsourcing start-ups have sprung up around the world – some are already highly disruptive. Wikipedia has redefined the very concept of Encyclopedia. Google transformed the search market by in effect Crowdsourcing links. Freelancer could prove to be the next Monster.com and blur Group is taking on big traditional creative agencies. They already have more creatives on tap than Saatchi and Saatchi.

Indeed, Crowdsourcing’s rise is starting to effect not only major business sectors but also government. Barack Obama used the power of the crowd to help him get elected and the UK’s coalition government has adopted Crowdsourcing to help them gather ideas from the electorate on how to adapt and improve laws under the ‘Your Freedom’ initiative.

Global corporations have even started to adopt Crowdsourcing. Pepsi and Unilever tap the power of the Crowd to gather in creative advertising concepts from their consumers. Dell launched a platform called IdeaStorm to collect product ideas from their consumers – so pushing innovation and idea generation out beyond their walls to the masses.

Crowdsourcing is one of the fastest growing Web trends. It may be that in a few years every organization will use Crowdsourcing in one way or another – to help them generate ideas more effectively, to launch more inspirational products, to outsource work more rapidly and cost-effectively and ultimately to define a new organizational model. One that is less about the old style hierarchical pyramid of full-time employees controlling every aspect of the business and its customer relations, to a more porous entity that meshes internal teams with crowds of customers, partners, suppliers and experts all coming together to help its products and services make for a better world.

The above article first appeared at Internet World, ‘The Rise Of And Future Of Crowdsourcing’.