Classroom Companion: Business

part of the production.
7.2.2 
 Commons-Based Peer Production
Commons-based peer production (CBPP)—also called social production—is a 
way of producing goods and services in which a large number of people (collabora-
tors) take part in the development of the product. The term was coined by Yochai 
7.2 · Basic Production Methods

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Benkler (Benkler, 
2002
). The production process takes place by use of the Internet—
the commons in the context of digital products. The group of collaborators is usu-
ally self-organized (if organized at all) and without central leadership or 
coordination. A platform for gathering the contributions from each collaborator 
into a final digital service must be established before the collaboration starts. The 
platform is used throughout the production of the digital service to organize and 
divide work between the collaborators. The contributing collaborators are not 
organized by a firm as in the in-house production model. Often, the collaborators 
do not receive any financial rewards for their contribution. 
.
Figure 
7.2
 illustrates 
the CBPP model.
The most famous example of the CBPP model is the operating system Linux in 
which hundreds of computer scientists contributed to the evolution of the Linux 
software over many years. Wikipedia is also the result of the CBPP model—no one 
is coordinating the content or the evolution of the encyclopedia. Arbitrary readers 
are checking the validity of the articles, correcting errors, adding novel material, 
and writing new articles.
The Internet itself is also a result of the CBPP model. Anyone can submit pro-
posals for new protocols, procedures, and functionalities of the Internet in memo-
randa called Requests for Comments (RFCs). The work is loosely organized by the 
Internet Society (ISOC) and the Internet Engineering Task Force (IETF), which are 
both non-profit organizations in which anyone—individuals as well as industries 
and organizations—can be members. The acceptance and implementation of new 
proposals depend entirely upon how the business opportunities and other prospects 
of the new proposal are assessed by users and providers of Internet hardware, soft-
ware, and services. Some of the new products may be short-lived (e.g., the real-time 
transport protocol XTP developed to speed up data exchange in distributed pro-
cessing systems), while others may exist for generations (e.g., HTTP and TCP).
Digital service
Company
Produces
Produces
Outsources
Outsourced
company
Ownership
. Fig. 7.1 The in-house production model. (Authors’ own figure)