Just Press Go
Here is an idea that I think would be very cool. But first let me start with some background. There is a lot talk right now about crowd-sourcing – but what is it? I think it can be best explained by a real world example taken from the first chapter of an excellent book on the subject entitled Wikinomics by Don Tapscott and Anthony D. Williams. Rob McEwan was the CEO of a Canadian gold mining company. The company was besieged by unfavorable market conditions and internal problems, the most important of which was that there was almost no gold left in the company’s 50 year old mine. McEwan gave his geologists a $10 million budget to go and find more gold somewhere in the mine. The search was unsuccessful. Then McEwan had an idea. He took the company maps and the geological surveys dating back to 1948 (some 400 megabytes of data) and put it all on the internet. In the mining business a company’s maps and geological surveys are valuable secrets and McEwan was thought insane in turning this information over to the public. He then offered a prize of $575,000 to the individual that could find the gold and provide the best estimates and methods for its extraction. As news of the challenge spread throughout the internet more than 1,000 people from 50 countries participated in the search. Entries came from geologists, graduate students, consultants, mathematicians and military officers. The contestants identified 110 targets, 50 percent of which had not been previously identified by the company’s own geologists and 80% of the new targets yielded substantial amounts of gold. McEwan’s struggling $100 million company was converted into a $9 billion success story such that $100 invested in the company in 1993 was worth over $3,000 in 2006. That’s crowd-sourcing.
If we pull back one level of abstraction, all that McEwan did was to turn a real world problem into a game. The goal of the game was to find the gold. The way to find the gold was to go through the labyrinth of data. In the video-gaming world you have many strategy games that ask players to similarly think through problems such as how to build a successful civilization (Sid Meier’s Civilization franchise) or manage a city (Will Wright’s Sim City franchise). These games are played by millions of people around the world and today you can even play them online and compete with rival players in a virtual world. Now these games are dismissed by polite society as cesspools for social rejects and perpetual Phd candidates. I think they are amazing, which may be an unflattering confession since I am not a Phd candidate. For example, the Civilization games reinforce the opportunity cost of public policies – if you choose to spend most of your national budget on military expenditure you could nonetheless be over-run by a rival nation that has spent more of its resources on research and development and as a consequence has just developed nuclear technology. Spend your wealth on palaces instead of economic growth and you will definitely be overtaken by your rivals. These ideas may sound like common sense to you but apparently they are not so common that they have reached the ear of Zimbabwe’s Robert Mugabe. And in practice all these common sense rules can become quite intricate when you layer them one on top of the other as they occur in the real world. For example, many of us know that you increase the interest rate when you think an economy is over-heating and you lower it when you think an economy is stagnating. Yet the best economists in the world were all stumped by stagflation in the 1970s. How do you deal with an economy that is experiencing inflation and high unemployment at the same time? Increase the interest rate and you kill investment which leads to greater unemployment. Lower the interest rate and you increase inflation. What is great about computer strategy games is that they provide models of the world in which you can test different approaches. In the 1990’s Britain decided not to adopt the common European currency preferring to adopt a wait and see approach. That was a risk and economists were divided as to whether that was the right approach. In essence the UK government was testing its theories in the real world. Those kind of tests can be expensive – ask the Soviets.
Somewhere in Zimbabwe right now there is an economist standing in line for hours for a container of milk. Although he may be the brightest member of the University economics faculty he is not affiliated with the current regime which apparently has no need for economists since they no longer have an economy. Our humble professor just shows up, does his job and then stands in line again. When Mugabe is overthrown (the tolling bell fell off the steeple yesterday) the new government will be faced with the unenviable task of trying to rebuild the economy. They may drive to the local grocery store and ask our talented economist to help. When he arrives in his ransacked office that day his position is going to be very similar to that of McEwan (except for the share options and the severance package). If the professor was to start work today he would face the following set of challenges: (1) Zimbabwe has defaulted on its loans and thus even if the international financial community is willing to lend to the new government its going to be a very high interest rate (current interest rates in Zimbabwe are 60%); (2) unemployment is at 50%; (3) inflation is at 60%; (4) the country is 25% over-budget; (5) GDP is projected to shrink between 2-5% and (6) real income has declined by 75% in the last 10 years. And on top of all this you can fold in qualitative problems like (7) post-rebellion civil unrest, (8) the second highest rate of HIV infection in the world and (9) a decaying educational infrastructure. What should the professor do next?
Well, imagine this. Imagine if the makers of the Civilization game franchise or perhaps an affiliation of independent game designers and university academics were to create a new game called say “Virtual Zimbabwe.” Its an online game so anyone around the world with internet access can log in to the website and play in their own individual virtual version of present day Zimbabwe. At the outset all players would face the same depressing statistics listed above. What happens next depends on what actions they take. To win – you have to turn a bankrupt state into a functioning viable economy as measured by (i) GDP per capita, (ii) income distribution, (iii) the rule of law, (iv) health and (v) education. These metrics are already used in the current Civilization games. Let’s say the game is run for 6 months. People would play the game because they either (a) want to be acknowledged as the greatest Virtual Zimbabwe player in the world, (b) they want to help to make the world a better place but don’t want to change out of their pyjamas or (c) they just like playing strategy games which seems to be a sufficient enough reason to create a $7.4 billion industry in the U.S. alone in 2006. If all those reasons fail then create a prize of $100,000 for the winner. That would probably equal the cost of flying a fancy team of economists to Zimbabwe on business class and have them cut and paste the recommendations they gave Tanzania into a new document. After the game has been running for 6 months you have a collection of say 10,000 different virtual models of Zimbabwe in a single centralized database. Congratulate the winner and then turn to the data. Now, with all these models, you can ask – what worked and what did not work? Of the strategies that worked what did they have in common? Similarly what can we learn from the models that failed. Now put together a list of recommendations for our besieged economist in Zimbabwe and give him the comfort of knowing that this strategy was tested on over 10,000 different models of his country’s economy and the odds are there won’t be a bill. And we really don’t even have to wait for 6 months after Zimbabwe has shed the Mugabe yoke to come up with that report. We know now that Zimbabwe will have to be fixed and there is probably someone working at the World Bank walking around the Farragut North subway stop right now trying to figure out how. A whole host of well-financed non-for-profits are also now trying to solve the same problem. In addition to these two groups there are countries such as the United States and South Africa that have a vested strategic interest in building stable democracies in Africa. And of course there is always Bill Gates who knows a thing or two about technology. Any of these organizations and individuals people could initiate a simulation at this point before the rebellion.
The overall theme here is that a game is nothing more than an exercise in problem solving. We have millions of people who pay a lot of money so that they can solve problems in this way. On the other hand we have a whole lot of problems to solve and we don’t always have a lot of resources with which to solve them. The key to connecting this supply of problem solvers to this demand for problem solvers is to make the process whereby the problem is solved entertaining. The video game industry has already done this. So we have supply, process and demand. Can someone please press GO?