Knowledge Map of the Virtual Economy

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  • Report: Knowledge Map of the Virtual Economy. World Bank InfoDev programme, 2010.

URL = http://www.infodev.org/en/Publication.1056.html


Description

Press release:

"$3 Billion Virtual Economy Provides Jobs in Developing Countries, Finds IFC/World Bank Study

Washington D.C., April 7, 2011 A new study by the World Bank Group’s infoDev program shows that virtual online currencies and digital work now provide real income opportunities to poor and unskilled workers in developing countries.

infoDev is a global technology and innovation-led development finance program of the World Bank and IFC. The new study, Knowledge Map of the Virtual Economy, finds that more than 100,000 people in countries such as China and India earn a living through online games and websites disseminating micro-tasks.

Jobs in the virtual economy include micro-tasks like categorizing products in online shops, moderating content posted to social media sites, or even playing online games on behalf of wealthier players who are too busy to tend to their characters themselves. The study estimates that the market for such gaming-for-hire services was worth $3 billion in 2009, and it suggests that with suitable mobile technologies even the least-developed countries could benefit from this emerging virtual economy.

“Developing countries’ roles in the digital world have been mostly limited to users and consumers, not producers. But today, a growing mesh of digital services is giving rise to a new layer of entrepreneurial opportunities with very low entry barriers,” said Valerie D’Costa, Program Manager of infoDev.

Tim Kelly, infoDev’s Lead ICT Policy Specialist, said, “Some of the poorest people in the world are already connected to digital networks through their mobile phones. The study shows that there are real earning opportunities in the virtual economy that will become accessible as mobile technology develops. This could significantly boost local economies and support further development of digital infrastructure in regions such as Africa and southeast Asia.”

While the virtual economy unlocks a plethora of business opportunities, it should be noted that not all these activities are viewed positively. According to the infoDev study, certain business ventures and services offered may actually detract from the experience of other Internet users. For example, harvesting and selling online gaming currencies or mass clicking “Like” on corporate Facebook pages can create an unfair environment where legitimate game play and user opinion loses value and is represented inaccurately.

“Entrepreneurs should focus on digital micro-work that benefits society. Examples include transcribing books, translating documents, and improving search-engine results,” said Dr. Vili Lehdonvirta, a researcher at Helsinki Institute for Information Technology and the main author of the study.

The study, funded by the United Kingdom’s Department for International Development, is available on infoDev’s website and in print. For more information, visit www.infodev.org."



Discussion

"Last year, the World Bank’s InfoDev programme asked me to write a report on the “development potential of the virtual economy”. The report, titled Knowledge Map of the Virtual Economy, is published today. It contains a number of new facts and ways of thinking about the virtual economy, and I’m excited to see what the reaction is.

In this report, we understand the virtual economy more widely than as mere online game economies, although online game economies are big part of it. Other sectors of the virtual economy are markets for such things as Facebook likes, Twitter followers, and digital microtasks. All of these are valuable yet scarce digital assets that have emerged as the so-called “digital economy” of online services has grown.

The development potential here refers to the potential to provide income opportunities to poor and undereducated people in developing countries, and to support the development of local ICT infrastructure. It is well known that gold farming provides income to many people in developing countries. In this report we estimate that it may employ as many as 100,000 full-time equivalent game laborers. For the first time, we also examine the full value chain through which gold farmers’ services are brought to Western players: everything from advertising to account hacking. We call all of these functions together the “third-party gaming services industry”, of which actual gold farming is only a small part. The total revenues of the industry are estimated at 3.0 billion USD.

But the future development potential of the third-party gaming services industry does not look good. It is threatened by game publishers’ decision to start selling virtual goods to players directly. Moreover, its services often bring harm to other players and game publishers, meaning that their net social value may often be negative.

In contrast, another sector of the virtual economy represents an unequivocally positive contribution to society: the market for Microwork, or small tasks such as tagging an image or trascribing a snippet of hand-written text. E-commerce sites and other companies need such work. With suitable technology, this demand translates to income opportunities for digitally connected individuals in developing countries. In the report, we examine the value chain of this industry and assess its development potential.

One important point to make is that microwork is distinct from the related concept of crowdsourcing. Crowdsourcing refers to the outsourcing of all kinds of tasks to a crowd via an open call. Microwork refers to tiny, digitally distributed tasks, whether these are sourced via an open call or, as is also common, through closed networks. (http://virtual-economy.org/2011/04/07/world_bank_virtual_economy_rep/)


More Information

  1. Economist, http://www.economist.com/blogs/schumpeter/2011/04/digital_economy
  2. Washington Post, http://www.washingtonpost.com/business/economy/world-bank-says-online-gaming-industry-is-a-boon-to-asia-economy/2011/04/05/AF1cebrC_story.html