I dislike the terms crowdsourcing and wisdom of crowds. First of all because the terms, particularly the former, have become the worst of buzzwords, meaning many things to many people and applied in far too many places. Apparently everything online now has some relation to Web 2.0, crowdsourcing, or user generated content. Depending on your definition you can call both YouTube (crowd submitted videos) and Innocentive (open calls for corporate problem solving jobs) crowdsourcing. Now, the original, official definition put forth by Jeff Howe (who coined the term) is “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call.”
This is not to denigrate any of these areas, it is simply to say that they have been applied to so many areas since then as to make them essentially meaningless. Of course, Web 2.0 itself never had a narrow, well-defined meaning — O’Reilly’s initial description of it was a slide with about 25 bubbles on it each with a different concept in it.
It is not the crowds producing the wisdom but the individuals in the crowd whose collective wisdom creates value. Dave Winer agrees saying “I am not part of a crowd, I am an individual” There seem to be two distinct things going on: tapping into the collective individual intelligence of a group of people (prediction markets, Threadless picks, popularity, ratings) and tapping into individual contributors or empowering individual contributors to participate in something that would classically be taken care of within the firm, via a contract with another firm, or via a professional relationship (what Jeff Howe would consider true crowdsourcing).
So, unless you are tapping into a crowd and, in the end, paying someone in that crowd to produce work that you would classically outsource or hire externally for, you are not crowdsourcing. You are likely creating a community, tapping into the wisdom of crowds, getting feedback, and on and on. The very fact that there are so many different things going on, is why I am — VERY slowly — working my way through a multi–part look at every different aspect of what is going on and how it will effect business and communication.