What Is Collective Intelligence?
People have used the phrase collective intelligence for decades, and it has become increasingly popular and more important with the advent of new communications technologies. Although the expression may bring to mind ideas of group consciousness or supernatural phenomena, when technologists use this phrase they usually mean the combining of behavior, preferences, or ideas of a group of people to create novel insights.
A well-known example is financial markets, where a price is not set by one individ- ual or by a coordinated effort, but by the trading behavior of many independent people all acting in what they believe is their own best interest. Although it seems counterintuitive at first, futures markets, in which many participants trade contracts based on their beliefs about future prices, are considered to be better at predicting prices than experts who independently make projections. This is because these markets combine the knowledge, experience, and insight of thousands of people to create a projection rather than relying on a single person’s perspective.
Although methods for collective intelligence existed before the Internet, the ability to collect information from thousands or even millions of people on the Web has opened up many new possibilities. At all times, people are using the Internet for making purchases, doing research, seeking out entertainment, and building their own web sites. All of this behavior can be monitored and used to derive information without ever having to interrupt the user’s intentions by asking him questions. There are a huge number of ways this information can be processed and interpreted.
Collective intelligence was, of course, possible before the Internet. You don’t need the Web to collect data from disparate groups of people, combine it, and analyze it. One of the most basic forms of this is a survey or census. Collecting answers from a large group of people lets you draw statistical conclusions about the group that no individual member would have known by themselves.
Here are some of the examples:
Wikipedia is an online encyclopedia created entirely from user contributions. Any page can be created or edited by anyone, and there are a small number of administrators who monitor repeated abuses. Wikipedia has more entries than any other encyclopedia, and despite some manipulation by malicious users, it is generally believed to be accurate on most subjects. This is an example of collective intelligence because each article is maintained by a large group of people and the result is an encyclopedia far larger than any single coordinated group has been able to create. The Wikipedia software does not do anything particularly intelligent with user contributions—it simply tracks the changes and displays the latest version.
Google, The search engine Google was started in 1998, at a time when there were already several big search engines, and many assumed that a new player would never be able to take on the giants. The founders of Google, however, took a completely new approach to ranking search results by using the links on millions of web sites to decide which pages were most relevant. Google’s search results were so much better than those of the other players that by 2004 it handled 85 percent of searches on the Web. Its founders are now among the top 10 richest people in the world.
Netflix, is an online DVD rental company that lets people choose movies to be sent to their homes, and makes recommendations based on the movies that customers have previously rented. In late 2006 it announced a prize of $1 million to the first person to improve the accuracy of its recommendation system by 10 percent, along with progress prizes of $50,000 to the current leader each year for as long as the contest runs. Thousands of teams from all over the world entered and, as of April 2007, the leading team has managed to score an improvement of 7 percent. By using data about which movies each customer enjoyed, Netflix is able to recommend movies to other customers that they may never have even heard of and keep them coming back for more. Any way to improve its recommendation system is worth a lot of money to Netflix.
Prediction markets are also a form of collective intelligence. One of the most well known of these is the Hollywood Stock Exchange (http://hsx.com), where people trade stocks on movies and movie stars. You can buy or sell a stock at the current price knowing that its ultimate value will be one millionth of the movie’s actual opening box office number. Because the price is set by trading behavior, the value is not chosen by any one individual but by the behavior of the group, and the current price can be seen as the whole group’s prediction of box office numbers for the movie. The predictions made by the Hollywood Stock Exchange are routinely better than those made by individual experts.
Some dating sites, such as eHarmony, use information collected from participants to determine who would be a good match. Although these companies tend to keep their methods for matching people secret, it is quite likely that any successful approach would involve a constant reevaluation based on whether the chosen matches were successful or not.
What do all these examples have in common? They all drew new conclusions and created new business opportunities by using sophisticated algorithms to combine data collected from many different people. The ability to collect information and the computational power to interpret it has enabled great collaboration opportunities and a better understanding of users and customers.
"Building new conclusions from independent contributors is really what collective intelligence is all about."
So, the long story short the future belongs to collective intelligence tools and skills in order to be a part of global creativity. People who know how to negotiate collective intelligence networks are going to be in a good position to contribute to global society.
People have used the phrase collective intelligence for decades, and it has become increasingly popular and more important with the advent of new communications technologies. Although the expression may bring to mind ideas of group consciousness or supernatural phenomena, when technologists use this phrase they usually mean the combining of behavior, preferences, or ideas of a group of people to create novel insights.
A well-known example is financial markets, where a price is not set by one individ- ual or by a coordinated effort, but by the trading behavior of many independent people all acting in what they believe is their own best interest. Although it seems counterintuitive at first, futures markets, in which many participants trade contracts based on their beliefs about future prices, are considered to be better at predicting prices than experts who independently make projections. This is because these markets combine the knowledge, experience, and insight of thousands of people to create a projection rather than relying on a single person’s perspective.
Although methods for collective intelligence existed before the Internet, the ability to collect information from thousands or even millions of people on the Web has opened up many new possibilities. At all times, people are using the Internet for making purchases, doing research, seeking out entertainment, and building their own web sites. All of this behavior can be monitored and used to derive information without ever having to interrupt the user’s intentions by asking him questions. There are a huge number of ways this information can be processed and interpreted.
Collective intelligence was, of course, possible before the Internet. You don’t need the Web to collect data from disparate groups of people, combine it, and analyze it. One of the most basic forms of this is a survey or census. Collecting answers from a large group of people lets you draw statistical conclusions about the group that no individual member would have known by themselves.
Here are some of the examples:
Wikipedia is an online encyclopedia created entirely from user contributions. Any page can be created or edited by anyone, and there are a small number of administrators who monitor repeated abuses. Wikipedia has more entries than any other encyclopedia, and despite some manipulation by malicious users, it is generally believed to be accurate on most subjects. This is an example of collective intelligence because each article is maintained by a large group of people and the result is an encyclopedia far larger than any single coordinated group has been able to create. The Wikipedia software does not do anything particularly intelligent with user contributions—it simply tracks the changes and displays the latest version.
Google, The search engine Google was started in 1998, at a time when there were already several big search engines, and many assumed that a new player would never be able to take on the giants. The founders of Google, however, took a completely new approach to ranking search results by using the links on millions of web sites to decide which pages were most relevant. Google’s search results were so much better than those of the other players that by 2004 it handled 85 percent of searches on the Web. Its founders are now among the top 10 richest people in the world.
Netflix, is an online DVD rental company that lets people choose movies to be sent to their homes, and makes recommendations based on the movies that customers have previously rented. In late 2006 it announced a prize of $1 million to the first person to improve the accuracy of its recommendation system by 10 percent, along with progress prizes of $50,000 to the current leader each year for as long as the contest runs. Thousands of teams from all over the world entered and, as of April 2007, the leading team has managed to score an improvement of 7 percent. By using data about which movies each customer enjoyed, Netflix is able to recommend movies to other customers that they may never have even heard of and keep them coming back for more. Any way to improve its recommendation system is worth a lot of money to Netflix.
Prediction markets are also a form of collective intelligence. One of the most well known of these is the Hollywood Stock Exchange (http://hsx.com), where people trade stocks on movies and movie stars. You can buy or sell a stock at the current price knowing that its ultimate value will be one millionth of the movie’s actual opening box office number. Because the price is set by trading behavior, the value is not chosen by any one individual but by the behavior of the group, and the current price can be seen as the whole group’s prediction of box office numbers for the movie. The predictions made by the Hollywood Stock Exchange are routinely better than those made by individual experts.
Some dating sites, such as eHarmony, use information collected from participants to determine who would be a good match. Although these companies tend to keep their methods for matching people secret, it is quite likely that any successful approach would involve a constant reevaluation based on whether the chosen matches were successful or not.
What do all these examples have in common? They all drew new conclusions and created new business opportunities by using sophisticated algorithms to combine data collected from many different people. The ability to collect information and the computational power to interpret it has enabled great collaboration opportunities and a better understanding of users and customers.
"Building new conclusions from independent contributors is really what collective intelligence is all about."
So, the long story short the future belongs to collective intelligence tools and skills in order to be a part of global creativity. People who know how to negotiate collective intelligence networks are going to be in a good position to contribute to global society.
