Open Sesame: The Hidden Treasure Of Second Generation Knowledge Management

Open Sesame: The Hidden Treasure of Second Generation Knowledge Management

Gary Shilling

August 27, 2009

When computers were first linked in the 1970s, the idea of creating a "knowledge society" was at the forefront of a few select minds. Together, they built an internetworked system of computers (ARPANET) that would eventually become the Internet. A collaboration between the Department of Defence and the academy of research universities and laboratories, the DOD was testing an idea that remote networked groups would make more rational judgements than face-to-face groups. An infrastructure of open technology components resulted from an almost continuous demand for cooperative work with three core values: intellectual curiosity, informal meritocracy, and an egalitarian presumption (Kiesler, 1997). Corporations and their culture, on the other hand, emerged to suppress lateral interactions between people and direct value instead to a select group of investors (Rushkoff, 2009), with the price mechanism as a coordinating instrument (Coase, 1933). As such, we observe that Open Organizations respond better to the riches offered by collaborative processes such as Second Generation Knowledge Management and the creation of Social Capital. Benkler (2002) reflects on Coase's The Nature of the Firm, where firms are described as clusters of resources and agents that interact through managerial command systems rather than markets. Transaction costs that are associated with enforcing and defining property and contract rights within the market model affect the firm's growth and activity. Open source software projects do not rely on either markets or managerial hierarchies to organize production and represent "[a] new model of production ... one that should not be there, at least according to our most widely held beliefs about economic behavior" (p.372). And yet, these large and medium scale collaborations are happening everywhere in cultural and information production. Programmers participate in open source software projects without following the logistics of market-based or firm based models. "The digital arrangement of this system evades the classic problem of the tragedy of the commons (Hardin, 1968) because the resource is not exhausted by use. On the contrary, the peer-to-peer technology means that the more a certain digital resource is used, the more available it becomes" (Hughes & Reiner, 2003). This thinking is at the core of Google's search algorithms hierarchy.

As described by McElroy (2002), Second Generation Knowledge Management (KM) is more inclusive of people, process, and social initiatives, centred on knowledge as something that is produced in human social systems through individual and shared processes. As such, its focus is both knowledge production and integration. The knowledge life cycle begins with the detection of problems and ends with newly validated knowledge claims (p.5). McElroy extends the concepts of the Knowledge Learning Cycle to embrace the "Open Enterprise", rooted in the thinking of Karl Popper, and the notion of the Open Society. At the root of this thinking is the idea of 'Critical Rationalism', where the fallibility of knowledge is stressed. In citing the example of Enron, McElroy portends that it was a closed KLC that lead to its downfall. He also speculates that the corporation failed to heed the criticisms of its own people. If one extends this speculation to the recent collapse of the world-wide banking system, can poor KLC bear the blame for this demise, or is it the very nature of these firms and their priorities? Unlike the corporate model, commons-based peer production involves individuals selfidentifying tasks in a decentralized collaborative system where the point of decision rests with the individual. Unlike corporate systems that devise incentive compensation schemes to encourage efficiency and creativity (and a better bottom line), peer production provides a framework where individuals with the best information about their suitability for a task, will take it on. As Benkler (2002) points out: "Peer production has an advantage over firms and markets because it allows larger groups of individuals to scour larger groups of resources in search of materials, projects, collaborations, and combinations than is possible for firms or individuals who function in markets" (p.378). Examples of Open Source software include: GNU/Linux operating system, Apache web server, Drupal content management system, and BittTorrent file sharing. Free software and its projects do not rely on either markets or managerial hierarchies to organize production. Participation is generally not governed by a manager or monetary return. James Coleman, an American sociologist, and Pierre Bourdieu, a French sociologist, both laid the ground work for studying the benefits accruing to individuals because of their ties to others. "Social capital became defined as (1) a source of social control, (2)

a source of family mediated benefits, and (3) a source of resources mediated by nonfamily networks" (Portes, 2000). Bourdieu (1986) defined the interaction between money capital, social capital, and cultural capital. Putnam proposed that social capital became an attribute of the community itself. Although sometimes at odds, the duality of social capital accruing to the individual and the group is appropriate for our study of P2P production. In understanding the motivations of peer production, Benkler (2002) observes that "there exist ranges of human experience in which the presence of monetary rewards is inversely related to the presence of other, social-psychological rewards" (p.380). This combined with the fact that when a project can be broken into small pieces requiring a small amount of time, the motivation required is also small. Within this model, production can be incremental and asynchronous, made up of a large number of contributions of varying size. It is the centrality of human capital in information production that is the primary source of efficiency gains in Commons-based peer production. Boyle (2008) argues that there is a cognitive bias against open source organization. "Call it the openness aversion. Cultural agoraphobia. We are systematically likely to undervalue the importance, viability, and productive power of open systems, open networks, and nonproprietary production" ( p.231). This aversion to openness can be observed in the expansion of intellectual property rights. Over the last 50 years, changes in the law have usually been to expand these rights and restrict the flow of intellectual property into the public domain. Calling for "Cultural Environmentalism", Boyle envisions an intellectual and practical movement against the legal regime that has adapted poorly to the technological transformations around us. He argues that "we need to make visible the invisible contributions of the public domain, the ‘ecosystem services’ performed by the under-appreciated but nevertheless vital reservoir of freedom in culture and science" (p.242). As products become ephemeral information bits, the bargain changes and a need arises for a clearer understanding of what intellectual property and the public domain mean.

When is peer production a better motivator than market-based enterprise? Where Social-psychological rewards, (a function of cultural meaning) form an effect on one's social associations and status based on actions—Where "actions involved in creating the opportunities for others to act are themselves acts with analogous reward structures" (Benkler, 2002, p.64). In The Hacker Ethic, Linus Torvalds, describes what he calls Linus' Law, a hierarchical scale of motivations: “survival', 'social life', and 'entertainment." “By entertainment, he's not thinking of games so much as “the mental gymnastics involved in trying to explain the universe”, whether you're Einstein, an artist or a hacker” (Stafford, 2001). That’s gold!

References: Benkler Y. (2002). Coase’s penguin, or Linux and the nature of the firm. Yale Law Journal, 112(3), 369-446. Bourdieu, P. (1986). The Forms of Capital. Retrieved on August 26, 2009 from http://www.marxists.org/reference/subject/philosophy/works/fr/bourdieuforms-capital.htm. Boyle, J. (2008). The Public Domain: Enclosing the commons of the mind. London: Yale University Press. Coase, R. H. (1937). The Nature of the Firm. Economica, New Series. 4(16), pp. 386405. Hughes, J. & Lang, K. R. (2003). If I Had a Song: The culture of digital community networks and its impact on the music industry.The International Journal on Media Management. 5(3). pp-180-189. Kiesler, S. (1997). The net as it was and might become. In S. Kiesler (Ed.), Culture of the Internet (pp. 1-2). Mahwah: Lawrence Erlbaum Associates, Inc. McElroy, M. T. (2002). Second-generation knowledge management. In The New Knowledge Management: Complexity, Learning, and Sustainable Innovation (pp. 1-23). Butterworth-Heinemann. Portes, A. (2000). The Two Meanings of Social Capital. Sociological Forum, 15(1). pp.112. Rushkoff, D. (2009). Life, Inc.: How the world became a corporation and how to take it back. New York: Random House, Inc.

Stafford, M. (2001)The Hacker Ethic (review): Retrieved on August 25, 2009 from http://www.linuxjournal.com/article/4690