One of these trends is the general increase in educational levels, and the parallel increase in the capabilities for symbolic processing and intellectual and creative cooperation. Various authors have described processes of mass amateurization and the creation of a new social group of ‘professional amateurs’. More generally, instead of locating such changes in a specific group of people, we would argue that that there is an increasing general intellect or collective intelligence at work, which also registers on the individual level as a creative and ethical surplus. The quest for self-realization in the form of meaningful productive and creative work is no longer finding an outlet in the traditional institutional forms. The informal curriculum is outstripping the formal curriculum, user-generated content is outstripping formal publishing by media and cultural industries, and value is created outside of the for-profit context. Motivations for creative production are outstripping monetary interests and create an ethical economy for the sharing of individual and collective expression and the exchange of reputational currencies, falling largely outside the scope of monetization in the formal economy.
All of this finds the possibility of expression because of the emergence of new technological affordances in the form of internet and social web technologies. No longer are the possibilities for creation, distribution and usage of symbolic output constrained by any institutional location and ownership of the means of creative production and distribution, as these have now been largely socialized. They are no longer located in the factory, but the entire society is now the locus for such activities. Frequently, western citizens find that their own infrastructure of work and cooperation is far superior from what they can find when they are ‘on the job’.

As innovation is escaping from its previous entrepreneurial context, so is entrepreneurship escaping its ‘capitalist’ context. Generally speaking, until a decade ago, it was very difficult to undertake any innovation without access to capital, but the amount of capital needed to create for example internet start-ups has been drastically reduced. We could even argue that in many cases the a priori need for capital is reaching zero. The reason for this is that design is an immaterial process that can take place over the network, and necessitates mainly human brains and computers, means of production that have been largely socialized at the present stage. Many of the prominent Web 2.0 innovations, such as Bram Cohen’s conception of the Bittorrent protocol, were conceived without access to capital. This is of course not to say that capital is entirely unnecessary, but rather that it is becoming not a ‘a priori’ condition for innovation, but rather a ‘a posteriori’ condition for continued growth and expansion in case of prior success. When a immaterial innovation such as software is successful, it requires expanded means to fund the infrastructure it needs to be able to keep up with rising demand.
Generally speaking, the technological affordances created by the internet and the social web enable the creation of globa-local cyber-collectives, or networked micro agencies of minipreneurs, which are now able to create vastly complex and very valuable social artefacts, such as Linux and the Wikipedia. Just as important, the new infrastructure allows for the global scaling and coordination of small group dynamics.

2. The Emergence of Peer Production

The above trends have been studies in a number of recent books which can serve as documentation and validation of the above summary. They document the emergence of three new social processes:
1) The ability to produce in common outside of state-business institutional frameworks: peer production
2) The ability to allocate resources and coordinate such peer production projects through self-organized governance: peer governance
3) The ability to protect the common production from private appropriation: peer property.
Let us quickly review the literature on the subject so as to ground its social existence.
Using Ronald Coase ’s transaction cost theory, Yochai Benkler (in The Wealth of Networks ) has examined the particular conditions under which commons-based peer production can emerge, and these conditions are strongly related to the emergence of a globally distributed network for the production and sharing of knowledge, i.e. the capability to reproduce non-rival information goods at marginal cost. The main thesis could be summarized as follows: When costs of participation are low enough, any motivation may be sufficient to lead to a contribution.
Steve Weber proposes a detailed examination of the open source development and governance process in his book The Success of Open Source .
Another detailed description, focusing more on general knowledge production, is an upcoming book by Queensland University researcher Axel Bruns, who describes it as a process of produsage, because production and usage are merging , and are undertaken by communities of produsers. An earlier description, and a long argument and explanation of why open source functions better for complex projects such as software, is of course Eric Raymond’s widely known The Cathedral and the Bazaar .
Eric von Hippel’s The Democratization of Innovation describes the emergence of social innovation outside of the corporation, by user-led communities or by ‘lead users’ , and he shows how such social innovation is now at the heart of the industrial process.
Don Tapscott’s Wikinomics is a description of how companies are adopting such practices of open participation in their competitive strategies, and has many examples of co-design , co-creation and crowdsourcing as different ways to integrate wider participation in the value chains. His conclusion is that such practices become competitive necessities and a new baseline for successful business operations.
Charles Leadbeater’s book We Think is probably the book which takes the largest societal point of view, through a description of participation in the full social field.
The emerging format of common ‘peer property’ is described in an edited book of research papers by Rishab Ayer Ghosh, entitled Code. Peter Barnes’ book entitled Capitalism 3.0. has been instrumental in creating an awareness of new institutional formats for the governance of commons such as trusts.
The emergence of peer production, governance and property is therefore associated with the rise of three new paradigms regarding social organization. Indeed the social reproduction of passionate production requires open and free input, participatory processes and commons-oriented outputs, resulting in a process of social reproduction that Prof. Nick Dyer-Witheford calls the “Circulation of the Common “. Social movements organized these three paradigms are emerging in every field of human activity.
Though peer production is becoming a social practice that is essentially active in the field of immaterial production of knowledge and immaterial services such as software, where the condition of non-rivalness of goods prevails, our networked information economy already means that this practice is nested in the very core of value creation. The important point is this: every process of physical production also requires a design phase, and there are few structural reasons why these design phases cannot obey the logic of peer production. This is why there is also an emergence of open design communities in various fields of physical production, most notably around ‘appropriate technology’, but also including ambitious projects for open source energy and open source cars.
Finally, there is a combined series of trend in financial and productive capital favoring the emergence of new distributed modes for the production of physical objects. While the full impact of such trends is still a few decades away, the premises for the emergence of more distributed physical production, in combination with globa-local open design communities, are being prepared today. Eric von Hipple has coined the concept of ‘built-only capitalism’ to denote the emergence of such practices, which he already has documented.
To mention them briefly: 1) integrated desktop manufacturing environments for design ; 2) the trend towards rapid manufacturing and rapid tooling ; 3) personal fabricators and 3D-printing; 4) the development of multi-purpose machinery ; 5) social lending and other distributed funding formats.

3. The Implications for Business: Three Emerging Business Models

As a third mode of production, passionate production has a number of advantages. One is that it structurally eliminates lower productivity motivations from its operations. Because of its bases in voluntary engagement of peer producers, both extrinsic negative motivation (coercion and fear), and extrinsic positive motivation (production for reward only), are eliminated, leaving intrinsic positive motivation as the only driver. Reliance on vast communities of talent creates a dynamic that we could call the law of asymmetric competition. It is very difficult for a for-profit institution, using proprietary modes and having to pay all of its collaborators, and motivated only to create the relative quality required by competition, to compete with a for-benefit project relying on open proprietary formats and a large supporting community striving for ‘absolute quality’. As a process therefore, peer production will create higher quality products that are infinitely unfinished but also permanently improved.
It is based on this understanding that the business world has begun a process of massive engagement with various forms of peer production, and at this point, we can distinguish three distinctive business models. A good way to interpret such models is to take into account the dynamic and polarity of both the peer producing communities and the for-profit companies involved in such co-creation or co-design of value.
The first emerging model is sharism, and is particularly visible in the context of the Web 2.0 economy. In this model, participants are aggregating around the need for the sharing of individual creative expression (or of that of largely unconnected groups), and because of the ‘weak links’ that are characteristic of such efforts, they generally need third party platforms to enable the participation to take place. While the participants are geared to the direct creation of use value, their attention is the scarce resource used for monetization in an attention economy geared to advertising income. YouTube is the paradigmatic example of such process. The license format for such efforts is often the Creative Commons, which allows individuals to modulate the level of sharing.
The second model is ‘commonism’, or commons-oriented peer production, in which much more strongly linked communities are directly and consciously creating common artefacts. Because of their strong links, they generally use formal for-benefit institutions, such as nonprofit foundations, to manage the infrastructure of their cooperation (Wikimedia Foundation, Apache Foundation, Mozilla Foundation, etc…). Nevertheless, such commons also create a strong ecology for the creation of associated markets, such as evident in the Linux model. Because monetary revenue sharing often is antithetical to the voluntary cooperation, such companies are likely to use ‘benefit sharing’ schemes in order to sustain the commons from which they profit.
The third model is the crowdsourcing model. In this arrangement, certain features of peer production as used, but these processes are integrated in a value chain which is under corporate control. In many cases, the participants do not create use value, but exchange value, and therefore direct retribution and revenue sharing can more easily be used.
We can easily see how the emergence of such new business models requires quite different skillsets from the corporations involved, a move that requires that core competences be matched with the edge competences necessary to engage with borderless cooperation.

4. Policy Implications for a Partner State

The shift towards increased social innovation in general, and peer production in particular, also creates challenges for policy makers. They can no longer rely on simply supporting processes for entrepreneurial innovation, and have to recognize that value can and is being created directly by civil society through social relations. Much of the value created is in the form of use value, not exchange value, and the markets are created at the margins of the innovative activity, not in the core. However, thriving sharing and commons-oriented peer production, as well as crowdsourced minipreneurial activity, also creates vibrant markets.
We therefore propose the general concept of the Partner State, which enables and empowers the direct social production of value, and also the creation of necessary infrastructures to further promote social cooperation processes. One of the key features must also be the creation of transitional labour market policies which can paradoxically recognize that social value is not just created in formal jobs, but also crucially in the intervening periods between jobs. If we are to avoid generalized precarity, resulting from the non-recognition of the positive social externalities resulting from social cooperation, then public authorities need to think about benefit-sharing arrangements, both for themselves and from the business world, so that a thriving world of social innovation can continue to emerge.
If we need a transition towards postmaterial innovation, motivation and benefits; if we need faster innovation for sustainability, then it becomes even more crucial to have policies that promote social cooperation rather than hindering it, and support for open design communities striving for absolute quality, becomes a necessary condition for the transition towards a sustainable world.

Yochai Benkler. Coase’s Penguin, or Linux and the nature of the firm. From http://www.benkler.org/CoasesPenguin.html
Available at http://www.benkler.org/wealth_of_networks/index.php?title=Main_Page
Extensive summary available at http://en.wiki.oekonux.org/Oekonux/Research/SuccessOfOpenSource
“Produsage can be roughly defined as modes of production which are led by users or at least crucially involve users as producers - in other words, the user acts as a hybrid user/producer, or produser, virtually throughout the production process. Produsage demonstrates the changed content production value chain model in collaborative online environments: in these environments, a strict producer/consumer dichotomy no longer applies - instead, users are almost always also able to be producers of content, and often necessarily so in the very act of using it.” (http://snurb.info/produsage)
Available at http://www.catb.org/~esr/writings/cathedral-bazaar/cathedral-bazaar/; critical review at http://www.firstmonday.org/issues/issue4_12/bezroukov/index.html
First chapter available here at http://web.mit.edu/evhippel/www/books/DI/Chapter1.pdf
Explanation of user-centered innovation at http://p2pfoundation.net/User-centered_Innovation
Explanation of Lead Users at http://p2pfoundation.net/Lead_Users
Concept and examples at http://p2pfoundation.net/Co-Design
Concept and examples here at http://p2pfoundation.net/Co-Creation
Concept and examples at http://p2pfoundation.net/Crowdsourcing
Home page at http://www.wethinkthebook.net/home.aspx, draft version at http://www.wethinkthebook.net/cms/site/docs/charles%20full%20draft.pdf
Available via http://capitalism3.com/
Original paper at http://www.geocities.com/immateriallabour/withefordpaper2006.html, excerpts at http://p2pfoundation.net/Circulation_of_the_Common
Explanation at http://p2pfoundation.net/Desktop_Manufacturing;
Explanation at http://p2pfoundation.net/Rapid_Manufacturing
Explanation at http://p2pfoundation.net/Personal_Fabricators
Explanation at http://p2pfoundation.net/Multiple-Purpose_Production_Technology
Overview at http://p2pfoundation.net/Social_Lending