When Jeff Howe, contributing editor to Wired magazine, first coined the term “crowdsourcing” in 2006 he heralded a “new pool of cheap labour” where ordinary people used their spare time to work collaboratively with companies to create content, solve problems, and “even do corporate R & D.” Three years later, crowdsourcing has evolved from a novel Internet experiment to a legitimate corporate tool used by businesses ranging from Netflix to Britain’s Guardian newspaper.

Crowdsourcing is gaining popularity because it allows cash-strapped companies to outsource time-consuming drudgery and decision-making to the masses—who do it for free. In a recent high-profile case, the Guardian unleashed the power of the crowd to upstage a rival newspaper, and tackle the largest British political scandal in years. The Guardian was racing to catch up with the Daily Telegraph, which published a damning report in early May showing that British MPs had charged millions of dollars worth of frivolous expenses—for everything from clearing moats to building duck houses—to the public purse. The story was a huge coup, the result of months of toil by several journalists at the Telegraph who sifted through MPs’ expense claims to find the evidence. Continue…