The Internet is continuously revolutionising many traditional business practices and creating innovative new opportunities.

Recently, several publications have highlighted how the Internet has made groups of people and their combined decision-making abilities important in the current business environment.

In his best-selling book "The Wisdom of Crowds", James Surowiecki explains how the decisions arrived at by groups of people numbering from the tens to millions have spawned very successful businesses and changed the way we live.

"This intelligence, or the wisdom of crowds, is at work in the world in many guises," he said.

Most people believe that valuable knowledge is concentrated in a few minds. "We assume that the key to solving problems or making good decisions is finding the right person who will have the answer," said Surowiecki.

Even when we see large crowds of people, many of whom are not specially well-informed, predict the outcome of horse races or the results of a football game, we are more likely to attribute success to a few smart people in the crowd rather than the crowd itself. "We feel we need to chase the expert," he said.

Surowiecki's book argues that chasing experts is a mistake, and often a costly one. "We should start asking the crowd," he said.

Groups don't have to be dominated by exceptionally intelligent people in order to be smart, he added. "Even if most people within a group are not especially well-informed or rational, it can reach a collectively wise decision."

Moreover, human beings individually have limited foresight into the future and lack the ability and the desire to make sophisticated cost-benefit decisions.

Instead of finding the best possible decision, Surowieki believes we will often accept one that seems good enough and we often let emotion affect our judgement. "Yet despite all these limitations, when our judgements are aggregated in the right way, collective intelligence is often excellent," he said.

The Internet has permitted some savvy businessmen to combine all these collective judgements and develop successful new businesses. "It's the reason the search engine Google can scan a billion pages and find the one page that has the exact piece of information we are looking for," he said.

Another new phenomenon, which author Jeff Howe of Wired Magazine calls "the rise of crowd sourcing", has also been driven by the Internet's emergence. Many companies are using the Internet to attract new pools of cheap labour: everyday people who use their spare time to create content, solve problems and even do corporate research and development for multinational companies.

Howe cites Eli Lilly's InnoCentive website that was launched in 2001 to connect with brainpower outside the company. From the outset, InnoCentive threw open its doors to other firms eager to access the network's supply of ad-hoc experts.  

"Companies such as Boeing, DuPoint and Procter & Gamble now post their scientific problems on InnoCentive's website - anyone on InnoCentive's network can take a shot at cracking them," he said.

More than 90,000 part-time problem-solvers try to solve these often-complicated brain-teasers and are paid between US$10,000 (Bt375,000) and $100,000 for their solutions. Jill Panetta, InnoCentive's chief scientific officer, says more than 30 per cent of the problems posted on the site have been cracked, which is 30 per cent more than would have been solved using a traditional in-house approach.

The problem-solvers are from all backgrounds. "Many are hobbyists working from their proverbial garage, like the University of Dallas undergraduate who came up with a chemical to use in art restoration, or the Indiana lawyer who devised a novel way to mix large batches of chemical compounds," said Howe.

Howe warns that the crowd produces mostly junk. "Smart companies install cheap filters to separate the wheat from the chaff," he said.

Nevertheless, even if the networked community produces tons of rubbish, it ferrets out the best materials and corrects errors. "Wikipedia enthusiasts quickly fix inaccuracies in the online encyclopaedia and YouTube viewers find the one tastelessly funny amateur video from the 10 that are merely tasteless," he said.