The crowd is gaining ground

There are great advantages to using crowdfunding and crowdsourcing to develop a company. But there are disadvantages too. Both aspects are discussed at a conference this week about the future of businesses where a large group of people join forces to fund or develop a project.


Daniel Hjorth
Photo: Bjarke Maccarthy

A growing number of companies, organisations and entrepreneurs are using a crowd to develop their business - also in Denmark. A Scandinavian development to which there are historical, cultural and social explanations. According to Daniel Hjorth at the Department of Management, Politics and Philosophy at CBS, a collective organisation of society and high tax rates to assume a joint responsibility are tradition -thoughts recurring in concepts such as crowdfunding and crowdsourcing when a company seeks funding and manpower for a project in a wide circle. The future of the entrepreneurial crowd will be debated at CBS 9 September at the conference "Tapping into the Crowd".

”The crowd is turning into a tangible phenomenon. We wish to illuminate this development with the conference", says Daniel Hjorth and explains that the 100 participants will learn more about the advantages of using the crowd, just as some presentations will illustrate the drawbacks. The drawbacks in particular may decide companies' use of crowdfunding and crowdsourcing in the future.

According to Daniel Hjorth, one the advantages is speed:
”Using the crowd is a very resource efficient organisation model, because you do not formally hire people. You invest your time and if that goes well, you have a share of the profit. And its network-based character enables you to get the manpower and the competences you need."

Insecurity is one of the drawbacks. Crowdbased work involves a certain degree of insecurity. If you do not succeed in making money on the project you have invested your time in, you are not paid for the time you have spent - neither by the public or the people you have worked with.

”There is a need for flexibility in the future labour market. We might consider some kind of employment model for crowdbased work, Daniel Hjorth suggests.
According to Hjorth, the model may be based on a registration of hours spent on a project.

”This will give an economic boost to society. If you have been working in a crowd for two years and it is not going well, it looks like you have not worked for two years. That is unfair. If I invest my time in a project, I am doing something that society wants me to do; I am trying to create jobs," says Daniel Hjorth.

Another challenge that might impact the development of crowdbased work in the future is the financial system:
”Crowdfunded startups are an implicit criticism of the banking system, which is not flexible enough to handle these projects. Citizens would rather join forces and find the money to convince a larger investor."

Security, however, is a challenge. According to Daniel Hjorth, there is no guarantee that people in the crowd do not run off with the money. And the fact that systems will have to handle very large amounts securely also carries a risk. A number of platforms are in fact starting to offer the possibility of handling large transactions in connection with crowdfunding. This aspect is crucial to the development of this organisation model in the future, says Daniel Hjorth.

Read more about the conference and contact the CBS Entrepreneurship Platform for more information

Sidst opdateret: Communications // 02/09/2020