Value Evaluation of Innovations in the Sharing Era

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Research paper: Value Evaluation of Innovations in the Sharing Era : towards a model proposal. By François Druel, Henri Samier, Simon Richir.

Request copy from f.druel at pi-lab.net

Summary

In the above draft paper, the authors claim that "the value created by online electronic communities can be evaluated: and, if it is the case,

They claim:

we may find criterias allowing to establish a scientific approach for a method dedicated to determining the value created.

and explain their goal as follows:

"Value evaluation is a necessity because if these projects want to survive they will have to find resources, on a recursive basis. How can a project find resources with no evaluation method ? On their sides, investors (such as banks or funds) do not like to miss business opportunities ; but they need tools for evaluating the value of such projects.

Nowadays, tools and methods exist to evaluate the value of a traditional business project : analyzing the business plan or the results, one can easily establish ratios and indicators to determine if investing in such or such project makes sense and, even perhaps establish an investment strategy goal or return on investment. But, how can one determine such factors and information for a non commercial product ? How can we evaluate OpenSource projects and other non commercial initiatives that are creating value on the net ?"

The essay goes on by describing the characteristics of a Sharing Era, a sixth technological revolution that follows the five described by Carlota Perez (with the fifth being the information age, starting in 1971 with the Intel microprocessor).

The sharing era is characterized by community:

"All these projects (at least the major ones) share a common characteristic : they are community-based. They are not the creation of a single programmer (despite the fact they can have a emblematic leader, or any kind of guru, projects are made by teams). Working in teams spreaded throughout the planet means that the projects have to use communications tools and have to get organized if they want to deliver a result."

But:

"As fas as they are not produced by companies and they do not generate any money, establishing their value is a big problem."

However, classical methods are unlikely to do the trick:

"Business evaluation methods are not really adapted to value evaluation of innovation. Partly because they are issued from the industrial era and partly because they are not dedicated to innovation. As a consequence, they give a partial vision of companies value. And, last but not least, they are mainly dedicated to company evaluation. Moreover, the organizations that manage projects from the sharing era are not companies. Their goals are not the same as companies."

They then mention a possible alternative:

"How can we evaluate an innovative organisation without being limited to financial, economic and industrial criterias ? For answering this question, André-Yves Portnoff, a french futurologist and researcher, created the VIP Methodology"

Its postulate:

"The value is the product of synergies and not additions(. . . ) the true value is only in exchanges and value in itself does not exists. Value is a human creation, meaning it is subjective. Value comes from interactions between ideas, people, teams, machines or between people and machines."

"The method wants to reflect the value created by interactions, what Portnoff calls the real capital of organizations. Moreover, the VIP method does not refer directly to monetarization of value. That characteristic allows us to adapt the method to the projects issued from the sharing era."

Following a caste study experiment of a community forum, they conclude:

"Following the information age, the sharing era has established a new paradigm in which value is not based on rare things but on sharing. Initiatives such as Open Source and Free software paved the way to the development of this new age where value creation is based on the underlying community. Evaluation methods issued from the old world cannot be used anymore because they are irrelevant. Organizations of the sharing era are sui generis21. It is why they need their own new evaluation methods.

In the experiment we made, we showed that activity on a forum can be evaluated. Nevertheless, this activity measurement is not sufficient to establish the value of the underlying community. Future experimentations are to be done to establish a model, that, we think is more than needed for the future.

Based on our analysis and inspired from the VIP methodology, we are now working on establishing a new value-evaluation model specifically designed to fit projects and organizations of the sharing era. Our first results show that a new form of value can be determined."