The wisdom of crowds
In terms of hot business trends, I’ve written extensively about open-source innovation, the long-tail effect and simplicity but here’s a new one – collective wisdom. The idea is simple: the wisdom of a large group of people is nearly always greater than the intelligence of any single member. The theory is especially hot in Internet circles where obviously it’s very easy to access the collective intelligence of users but it’s also emerging as a hot forecasting tool in financial markets. The idea is as old as the hills, but it’s re-emerged due to technological developments (e.g. convergence and social networks), and a book called The Wisdom of Crowds by James Surowiecki. Goldman Sachs, Deutsche Bank and Hewlett-Packard are all using group wisdom to predict everything from next quarter sales to future economic indicators. Group prediction can even be played for fun on various websites like www.ideosphere.com, www.hsx.com and www.longbets.org. Is this a future trend or just a short-term management fad? What do you all think?