One author says the current subprime mortgage meltdown might have been avoided if large financial players had been more collaborative.

Regardless of the hardship it is causing many people, the subprime mortgage meltdown may have a silver lining by indirectly stimulating innovation in the years ahead.

IBM's growing interest in Africa and the world's other poorer regions is rooted in several philosophies, including social responsibility, but one of those philosophies is simply economic self-interest.

Much of the world is poor by U.S. standards and therefore represents an opportunity for developing new markets. IBM is partnering with CARE to establish an Africa Financial Grid to enable micro finance institutions in Sub-Saharan Africa to dramatically lower the costs of providing financial services to previously unbanked populations in the region. What is the motivation? The outlook for economic growth in Africa is expected to be a steady 5 percent annually for the foreseeable future.

Developing third-world economies and doing it in a sustainable energy-efficient way is a huge challenge. It's so big, in fact, that no single country, much less company, can accomplish it on its own. It's going to take the combined resources of the world's most highly developed nations.

I once took a weeklong training class in what's known as The Managerial Grid. What one leaves with after a week in class is the complete belief in the concept that the performance of the group is better than the best performance of the best individual in the group. In other words, people collaborating on problems consistently do a better job working together than do the member individuals working alone.

One of the reasons that open-source software is becoming increasingly popular is because it allows many people to collectively collaborate on tasks and employ resources otherwise unavailable to solve problems. Conversely, without opening up an action to scrutiny and review, many problems get worse and are hidden from view.

Don Tapscott, author of Wikinomics, How Mass Collaboration Changes Everything, maintains that business leaders and policymakers must become "radical collaborators" in order to address what appears to be a looming worldwide recession. The world economy, which may be teetering on the edge of a downward spiral, could be helped immeasurably if business leaders stopped secretly competing and put their efforts into collaborative solutions.

"The old-school way of doing business hides problems and creates inefficiencies," says Tapscott, author of 10 books and chief executive of New Paradigm consulting. "Radical collaboration solves those problems. It brings the best minds together, exposes hidden risks, and accelerates innovation and growth.... It's time to take the same approach to the most serious problems--problems with the gravest consequences for the economy and society. Leaders need to change their habits and open the curtain."

Tapscott's book, Wikinomics, is being republished in a new edition this month. It has new material that addresses today's most serious business and economic issues. Collaboration can transform business and global economics, says Tapscott, just as it already has transformed the social media through Wikipedia (the free, multilingual, open-content encyclopedia project operated by the non-profit Wikimedia Foundation), Facebook (the social networking site), and YouTube.

Yet "business leaders will have a hard time collaborating because collaboration goes against all their instincts," says Tapscott. However, "there's ample proof that leaders who take the radical step of collaboration and data sharing do better," he says. "They avoid risks, grow faster, and dominate markets."

Tapscott maintains that radical collaboration could have averted the subprime meltdown in the global credit markets. "The subprime mess happened because big financial players hid the risks," says Tapscott. "They weren't found until it was too late. If the same players had taken the radical step of sharing information about the bets they were structuring, the best minds--including economic policymakers--could have seen what was happening and taken steps to avert it."

Tapscott goes on to cite examples besides YouTube and Wikipedia to support his belief that innovation happens faster, new products come to market faster, and performance improves when more minds come together around the problem. Reaching into the mining industry, Tapscott cites the example of Goldcorp as having become a dominant player in the industry by making its proprietary geological data public and challenging the outside world to do the prospecting. Goldcorp "turned outsiders into collaborators and put its resources into technologies to exploit the discoveries--not the discoveries themselves," notes Tapscott. "If Goldcorp had taken a traditional competitive approach and hidden its data, it would never have been able to grow so quickly."

Tapscott says the successful approach taken with open-source software development, where the code is made public so that anyone can work on it and improve it, should not be confined simply to software. Most companies that hold patents would actually do better by sharing them, he says, because they frequently don't have the resources alone to bring them to market. "Collaboration can accelerate big solutions to big problems," says Tapscott. He points to healthcare company Novartis that published its raw research data about type 2 diabetes because it recognized that the problem was very large and very important--"so big and so important that it needed more brains and more resources than the company had under its roof."

One can see this philosophy gradually permeating the policies of IBM. It recently has begun opening up its technology through a series of licensing agreements in which it allows a contracting firm to use hundreds of its patents in exchange for technology from its new partner.

IBM and Level 3 Communications, for instance, announced last February that the companies had entered into a long-term patent cross-licensing agreement. Under its terms, IBM granted Level 3 licenses to IBM's approximately 42,000 pending and issued patents covering a broad range of telecommunications services and technologies. In return, Level 3 granted IBM licenses to Level 3's 850+ pending and issued patents covering a range of information-handling systems.

The idea of collaboration and the benefits inherent in the collaborative process are inherently behind much of the research and development going into many of today's Lotus products. "Strong collaborators achieve healthier business growth," says IBM in promoting its Lotus Quickr team collaboration software. The product helps users share content, collaborate, and work faster online with their teams--inside or outside the firewall, according to Lotus.

In a speech before financial analysts last December, Bill Zeitler, IBM Business and Technology Group vice president, acknowledged that the resource challenges facing high tech companies today are simply too big for any one company to overcome. Solutions will require collaboration among companies, said Zeitler. "I don't think any one company is going to be the answer," said Zeitler. "Collaborating is going to be important." Zeitler's theme is similar to that espoused in Tapscott's book, Wikinomics.

Online desktop solutions provider Zoho faced a challenge recently of having to translate its spreadsheet software application, Zoho Sheet, into numerous non-English languages. On a Thursday, the company asked its Romanian users to translate the software's interface into their own language. By Monday it was done. Translations into Dutch and Portuguese also went quickly. Users then tackled translating versions of the application interface into Greek, Catalan, Argentine Spanish, Tamil, Serbian, Kannada, Telugu, and Polish. The company simply put the challenge before its thousands of users around the world, and the job was accomplished in a matter of days at significant savings to the company.

Tapscott contends that if the world's business and policy leaders immediately began to collaborate on the impending economic slowdown, then the depth and severity of the recession would be greatly mitigated. The key to solving the global financial crisis and restarting growth is radical collaboration in which business leaders "open the curtains" and share information that was once proprietary, says Tapscott.

If the financial crisis were resolved through Tapscott's radical collaboration methods, it could prove to a whole generation of financial managers that openness and working together to solve problems from the start is a far better way of doing business than having the information pried out of them later, after they get into trouble.

Such success also could inspire a watershed of opportunity and accomplishment waiting for the right minds to help with the development of the world's poorest populations. That effort, while already underway, has miles to go. Yet take heart in the Oracle Education Foundation's work to expand its online collaborative learning portal, Think.com. The site is a cross-cultural learning environment used by some 300,000 students around the world to share information and enhance their minds. The foundation also sponsors ThinkQuest, an international competition challenging students to work in teams to build innovative and educational Web sites.

It would seem that the next generation of youngsters is learning about the power and advantages of collaboration. Now, if only their parents, who hold control over the world's economic levers, could trust in the same principles, we might see better progress in overcoming the massive three-pronged challenge of poverty, war, and climate change.

Chris Smith was the Senior News Editor at MC Press Online from 2007 to 2012 and was responsible for the news content on the company's Web site. Chris has been writing about the IBM midrange industry since 1992 when he signed on with Duke Communications as West Coast Editor of News 3X/400. With a bachelor's from the University of California at Berkeley, where he majored in English and minored in Journalism, and a master's in Journalism from the University of Colorado, Boulder, Chris later studied computer programming and AS/400 operations at Long Beach City College. An award-winning writer with two Maggie Awards, four business books, and a collection of poetry to his credit, Chris began his newspaper career as a reporter in northern California, later worked as night city editor for the Rocky Mountain News in Denver, and went on to edit a national cable television trade magazine. He was Communications Manager for McDonnell Douglas Corp. in Long Beach, Calif., before it merged with Boeing, and oversaw implementation of the company's first IBM desktop publishing system there. An editor for MC Press Online since 2007, Chris has authored some 300 articles on a broad range of topics surrounding the IBM midrange platform that have appeared in the company's eight industry-leading newsletters. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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