I-Corps: Knowledge Markets

Massachusetts Institute Of Technology, Cambridge MA

Investigators

Abstract

The proposed activity is the completion of the I-Corp program by the team of Marshall Van Alstyne (PI), Dawei Shen (entrepreneurial lead), and Robert Lloyd (mentor). Based on prior NSF grant 0925004, Van Alastyne and Shen have studied effects of knowledge markets on information sharing and worker productivity within firms. Empirical research suggests that provision of knowledge markets to workers can have large positive effects on the productivity. They have also created Barter, a prototype knowledge market that has been successfully used in classroom settings at several universities to enhance student learning. The intellectual contribution is to use economic theory to optimize crowdsourcing. Over the course of the I-Corp program, Van Alstyne, Shen, and Lloyd will validate the company business model in light of early customer feedback while completing a prototype commercial product based on the successful academic prototype. A prototype customer relationship with the Commonwealth Bank of Australia has already been established and discussions are underway with other potential enterprise customers. Organizations have sought gains through knowledge sharing for more than 50 years, implementing suggestion boxes, intranets, share drives, and now social wikis. Despite significant global investments, firms have had difficulty coaxing participation, efficiently generating new ideas, and accurately valuing those ideas. Techniques to successfully perform these tasks have the potential to broadly increase information access and dramatically increase commercial productivity. Based on an empirical study of a Japanese bank, the team found that one standard deviation increase in use of a knowledge market improved worker productivity by 10%. The National Bureau of Economic Research and European Economic Association peer reviewed these results. The World Bank has also asked to use the team's tools. Economists broadly argue that knowledge production is a key factor in worker productivity, which in turn is a major driver of wages and economic growth. If the team can replicate even a small portion of these results on a large scale, it could have an enormous positive impact on US and world economic welfare.