Crowdsourcing R&D - a hit or myth affair?

Crowdsourcing product development is a meme I've been watching bubble away awhile, but these 2 articles got me going enough to write something: Firstly, Jeff Jarvis in the Grauniad - the use of customer feedback for suggestions:

Starbucks, Dell and Salesforce.com have opened public forums for customer ideas, all using software from Salesforce. Customers submit their ideas, then fellow-customers vote on them - some gain a following, others die on the vine - and the companies implement the best of them.

So far so good, and it can be a great power for the good:

Dell's IdeaStorm.com was a tactic in the reformation of its scarred relationship with customers online. At the latest count, Dell has received more than 8,000 ideas, voted on 600,000 times, and it has implemented a score of them, including a new line of computers equipped with open-source Linux instead of Microsoft Windows. Michael Dell told me when I interviewed him for Business Week that this is the beginning of "cocreation of products ... a company this size is not going to be about a couple of people coming up with ideas. It's going to be about millions of people and harnessing the power of those ideas."

But it has its limitations - somehow I doubt this is what Starbucks Corporate wanted to see:

The top suggestion at MyStarbucksIdea as I write this - with 53,000 votes and 600 comments - is loftier: to bring cafe society to the cafes. "Use the power of media and wireless new media in particular to foster a sense of conversation about the arts, current events, etc," one customer proposed. An enthused commenter responded: "Great conversation will also renew the image of Starbucks as being not only a coffee community but also a global community where humanist ideas and great artists, writers, comedians etc could also attract a lot of people and turn Starbucks into a cultural, humanist hub!"

You can see where this one is going....the issue with all things Socially Mediated is when they get sidetracked from the original intentions, or worse gamed, and then how do you bring it back on track without (publicly) losing goodwill. So when Jeff says that.....

I would love to see this platform for mutual engagement also taken to government. I'm not suggesting we transform parliament into an online forum. But why shouldn't constituents share their good ideas and use the organising power of the internet to gather movements around them?

....that when the part of me that believes in democracy says "Yes, that is Way Cool" - and then the part of me that understands Social Media's true usage patterns (ie small minorities of connected actives tend to drive the buzz) , and how lobby groups work, and how access to PR money trumps honest wisdom of crowd systems etc etc, says no ways should this approach be used, not without considerable safeguards to ensure that powerful special interest groups don't over-run the systems and drown out the Silent Majority.

The other thing that concerned me was a related Read Write Web article on much the same subject, except they called it "Crowdsourcing R&D". But this is a myth - Crowdsourcing software is not "R&D" - Crowdsourcing is just a glorified "Social Media" suggestion box scheme. R&D is that hard stuff that creates sustainable economic advantage, that requires investment and long term planning - the thing that many western companies are cutting back on for short term gain. To confuse this sort of project with R&D, while comforting, is probably risky as one starts thinking that box is ticked when it isn't.

Now to be sure, there are success stories of outsourcing R&D - but there is probably a useful debate here - ie structurally, is it wise that major corporates - and by extension, western nations - crowdsource their forward R&D to their customers and (lowly capitalised) enthusiasts in garages, whether they be startups or retired enthusiasts? Can this approach really pull off the groundbreaking R&D required for long term competitive advantage?

Update - Vivek Bhaskaran , the CEO of the company featured in the RWW article, has put a thoughtful post below. I also noted I wasn't maligning his company - or an other Crowdsourcing company - more that RWW calling this R&D is not really accurate. Maybe I'm just oversensitive, but with the closure or scaling back of large amounts of the US and UK's "real" R&D labs over the last decade, its not clear to me how this is being replaced.

(Disclosure - we have worked with a number of the top UK R&D labs in our space)