The Shape of Crowdsourcing: Why Power Law Distributions Matter when Innovation Becomes Social

Innovation is fueled by novel ideas or novel combinations of existing ideas. The qual-ity of the initial ideas can determine the success or failure of companies in the mar-ketplace, making idea generation the highest point of leverage in the innovation pro-cess. Innovation has been opened up to crowds with the advent of notions such as the wisdom of crowds, crowdsourcing and network effects. Gaussian (normal) distribu-tions are presumed in most management research. Yet, Paretian (power law) distribu-tions often appear in the real world. If power law effects are ubiquitous in organiza-tions, innovation in a network economy and the activity of tapping into crowds for idea generation need to be coupled to this statistical curiosity. Hence, the purpose of the present paper is to propose that academic attention should turn towards power laws in relation to innovation and large-scale idea generation.