Crowdsourcing the new way to spur innovation?

Netflix paid a $1 million prize to a group of people (mostly researchers from other companies/Univ) for coming up with a new algorithm to improve its movie recommendation feature. Here is the link. http://bits.blogs.nytimes.com/2009/06/26/and-the-winner-of-the-1-million-netflix-prize-probably-is/?hpw

Some companies are already making money form this model. Check the following companies out...

InnoCentive, TopCoder, uTest, and CrowdSpring (Source: Businessweek)

Tata's Nano - The IKEA approach to Small Car!

Recently read a great blog/article on innovations in Nano - the small car from Tata. Read here. The more I think about it the more it looks like that Tata's approach is quite similar to the IKEA approach to home furnishing business:

- Start with the price first
- Design from scratch to meet that price point
- Have a Modular design - the whole car is constructed of components that can be built and shipped separately to be assembled by local entrepreneurs !

Interesting!