The Expertise Economy

Information is the economy. The basis of competition for most companies, from Wal-Mart to Merrill Lynch, will revolve around the way in which they process information.

5 min read
Information is the economy. The basis of competition for most companies, from Wal-Mart to Merrill Lynch, will revolve around the way in which they process information.

All real growth in the gross national product will come from improvements in information processing. If you are reading this text, you are almost certainly an "information worker" in some sense.

We all face some common frustrations in this Information Age. If you wanted to know if anyone at your company had personal contacts at a new partnering prospect, what would you do? Send an email to all employees? Make a random guess and send an email to a few people who might not be too bothered by the request?

Most people communicate with a close, insular group of co-workers and rarely tap into the gold mine of information and connections that is distributed throughout their company. Broadcasting requests creates more email smog and collectively wastes more time than it saves.

So why are there so few solutions for the efficient discovery of information? Before the ubiquity of email, there was not a common technology for contacting the relevant people. More recently, there has not been an efficient means to find the relevant people from the pool of possibility.

So what has been tried in the corporate setting? Primarily document-management systems, under the moniker of "knowledge management." Of course, the "knowledge" in documents tends to be dated, rigid, static and lacking context. Nevertheless, IDC estimates that knowledge-management software sales will top $5.4 billion by 2004. Clearly, there is huge demand for such systems.

Unfortunately, traditional knowledge-management systems are like communism--nice in theory, if you ignore basic human tendencies. These systems ask people to regularly volunteer information to be uploaded into the system "for the benefit of others." People benefit only from other people's submissions and gain little from their own submissions (in fact, they may lose, as they get peppered with questions). So there is little incentive to participate. It's much easier to be a free rider or lurker.

What is needed is expertise discovery, not knowledge management. The most helpful solution for corporate questions is a relevant expert--someone who can quickly point you to a solution or offer a quick response. It's not what you know, but whom you know.

Where are they?
But how can you find the expertise? The most current and comprehensive "snapshot" of a company and its skills can be found in the thousands of messages stored in its email system. Within it are portraits of employees, customers, suppliers and partners, and, on average, 45 percent of a company's critical business data. Yet this corpus of tacit and timely knowledge is fractured and locked within the discrete accounts of the employees who produce it--isolated by the misperception that it is inseparable from personal privacy considerations.

One company that has tackled this conundrum in a creative way is Tacit Knowledge Systems. Tacit starts as a secure background observer in the email system, performing statistical analysis on the frequency of keyword occurrences. Tacit customers need not change their work habits, and they gain an evergreen expertise directory. When they compose an email in Outlook or Notes, the members of the address book are ranked by relevance to the content of the email, whether it's a question or a forwarded article.

A new field of "automated expertise management" helps resolve business problems by brokering connections among people and delivering human ingenuity where and when it is needed. Tacit is the first company to continuously profile the knowledge and interests of each employee in the enterprise with no human intervention, no visible tools or special interfaces, and complete protection of privacy (profiles can be viewed only by employees, and they control which part, if any, is accessible by others).

The distilled profiles that drive the matching are under complete control of the end user. So if I am a very secretive person, I can chose to make my profile invisible to everyone. I may receive help requests anonymously, and I can choose whether to reply to them, but nobody will ever know the contents of my profile. If I am less secretive, I can look over my profile, edit out any terms that I would like to remove, and then let it be used for matching purposes without the extra anonymity layer of protection. Companies as diverse as Texaco, J.P. Morgan, Giga Information Group and Hewlett-Packard have chosen Tacit as their technique to tap into the wealth of distributed expertise in their companies.

Of course, the Expertise Economy expands beyond the enterprise; the potential exists to tap into the collective expertise of the world's population. Whether you are looking for competitors for a given company or for recent feedback on how crowded the beaches are at a vacation destination, someone, somewhere, has the answer.

We are all experts on something. The source of expertise could be a niche subject (like fly-fishing), a personal Rolodex of contacts, a recent experience (like the vacation example), or time (imagine a modern-day Web librarian).

The only reason there has not been a global market for information so far is that there has not been an infrastructure to make a market. The Internet, for the first time, provides that infrastructure.

Imagine an eBay for information. Based in New York, InfoRocket.com provides a trading community where you can post a question about anything. Anyone can bid to answer, and you can choose who you want to solve the problem. The company's philosophy is: If you have a question, then someone, somewhere, has an answer, and you can find that person on InfoRocket.

Basically, InfoRocket creates a worldwide economy for information and ideas. Unlike hard goods, it is difficult to "return" an information product after receiving it. InfoRocket has had to innovate in the areas of bi-directional nested feedback, quality control, and incentive mechanisms to promote an eBay-like community.

There is a wonderful economic asymmetry between those who have money and those who have time, between those who need an answer and those with information. Imagine you are researching a cool new company; would you pay $20 to have someone dig up five URLs of competing companies? A college student in India who is a great Web researcher might jump at the opportunity.

The asynchronous nature of a Web-based information exchange means that questions posted in the United States can be answered from anywhere on the globe. Imagine professional services like translation, computer support, graphic arts--the majority of economic activity is in services, much of which is an information service, freely tradable on a global basis.

The segmented boundaries between pools of expertise are dissolving at the corporate and global levels. The network economy will transcend the historic economic boundaries of nation states and time zones. Imagine a hybrid system where Tacit discovers expertise on a global scale and InfoRocket makes a market.

For the first time, people could harness the collective intelligence of the hive. In flocks, colonies and hives, there arises an emergent intelligence that exceeds the capacity of any one member. The Expertise Economy could usher us into a brave new world.