Types of open value networks

From OVN wiki
(Redirected from Types of value networks)
Jump to navigation Jump to search

An OVN is a new type of organization and as such, various conditions determine its characteristics.

Different applications of the OVN model

The following is a short list of known initiatives that have implemented the OVN model, or most of it, in different domains. One can trace these initiatives in the communications on various Sensorica channels.

Hundreds of individuals and organizations have contacted the protagonists of the OVN model since 2011 to get inspired and to integrate features of this model into their own models. It is hard to know precisely how the OVN model has spread in direct and indirect ways.

Are DAOs OVNs?

The OVN model was proposed in 2011 within Sensorica and built on the Discovery Network model proposed a few years earlier by Tibi. This development was done without direct influence from the blockchain breakthroughs, as part of the larger p2p movement (see more from Michel Bauwens). After 2016, we've seen the development and applications of DAOs (decentralized / distributed autonomous organizations), which are new organizational models designed around a blockchain-based infrastructure. Both, OVN and DAO models are about decentralized processes, they share some core features and are different in some aspects. More on the DAO page.

Determinant factors

Below we discuss factors that influence the characteristics of an OVN that emerges in a specific economic, social and cultural setting.

Type of production

By ChatGPT:

In economic terms, production refers to the process of transforming inputs (such as labor, capital, and raw materials) into outputs (goods and services) that are valuable to consumers or users. Different types of production methods exist, and they can be categorized based on various criteria, including the level of technology, scale of production, and the nature of the products. Here are some common types of production:

Job Production: Job production, also known as bespoke or custom production, involves the creation of a single product or a small batch of unique, customized products. Each item is typically tailored to meet specific customer requirements. Example: Custom-made furniture or tailored clothing.

Batch Production: Batch production involves the manufacturing of a limited quantity of identical artifacts (products) in a batch or group. This method allows for some customization while benefiting from economies of scale. Example: Baking a batch of cookies, producing a limited run of smartphones.

Mass Production: Mass production is characterized by the large-scale, standardized manufacturing of identical artifacts (products) using assembly lines and specialized machinery. This method aims to achieve high volumes, low costs per unit, and consistent quality. Example: Automobile manufacturing, electronics production.

Continuous Production: Continuous production involves the uninterrupted, non-stop manufacturing of a single standardized artifact (product). The production process operates continuously, 24/7, to meet high demand and achieve economies of scale. Example: Continuous production in industries like chemical processing, power generation.

Just-In-Time (JIT) Production: JIT production emphasizes producing goods or services exactly when they are needed in the production process, minimizing inventory levels and associated holding costs. It aims to reduce waste and increase efficiency. Example: Manufacturing processes with real-time inventory management, such as some elements of lean manufacturing.

Lean Production: Lean production is a systematic approach to eliminate waste and improve efficiency in the production process. It often involves techniques such as value stream mapping, continuous improvement, and minimizing non-value-added activities. Example: Implementing lean principles in manufacturing to reduce inventory, defects, and lead times.

Craft Production: Craft production involves skilled artisans or craftsmen producing goods by hand, often using traditional techniques. It is characterized by a focus on craftsmanship, attention to detail, and the production of unique or limited-edition items. Example: Handmade pottery, artisanal chocolates.

Flexible Manufacturing: Flexible manufacturing systems use advanced technologies and automation to produce a variety of products with minimal setup time and changeovers. This approach allows for quick adaptation to changes in demand. Example: Automated manufacturing systems that can switch between different product configurations.

Customization or Build-to-Order Production: In customization or build-to-order production, artifacts (products) are not produced until an order is received. This allows for high levels of customization and tailoring to individual customer preferences. Example: Custom-built computers, personalized consumer goods.

These production types represent different approaches to organizing and managing the production process, each suited to different contexts, industries, and customer demands. The choice of production method depends on factors such as the nature of the product, market conditions, technology, and cost considerations.

Apart from the previous categories we also find more broader ones, such as socialist production, capitalist production and commons-based peer production. The later refers to the mode of production of open source software and hardware or to collaborative modes of production of commons, such as Wikipedia. The OVN model is suitable for commons-based peer production, which involves open (easy access to participation) and transparent (access to information) networks.

The need of centralization or possibility of decentralization of production processes determine the organizational structure. Everything that is light, such as knowledge work, design, can be de-localized and decentralized. Everything that is heavy, such as mechanical assembly of parts into a finished physical good, is localized and may require requires centralized processes.

The OVN model relies on a distributed physical infrastructure for everything that is heavy, ex. a network of local storage and fabrication facilities. In recent years makerspaces have emerged as key spaces for local physical production that embrace the open and collaborative culture. These spaces are complemented by shared storage facilities, tools libraries, coworking spaces, etc. The OVN model relies on digital environments for collaboration where actors from across the planet can gather to discuss, plan, coordinate design activities, etc. See more on infrastructure.

It must be said that OVNs, as distributed production systems, are antithetical to mass production. For example, when it comes to physical production (material goods), OVNs rely on open source hardware development (the innovation part) and DIY production (production by the end user or by a local intermediary).

Type of artifacts (products) or deliverables created

Organizational structures are dependent on the type of artifacts they create. For example, software companies tend to be more

See on the Resource types.

Benefits capturing method

Capturing mechanisms, as well as redistribution mechanisms determine the type of OVN. In other words, the architecture of OVN will be designed to optimize the specific type of capturing mechanism.


Dependency on fixed material assets

Production processes in large scale agriculture are very dependent on land and water. The notion of property is important in this case: who owns the land and who controls access to water. New forms of property are emerging (see Water Commons post from p2p foundation). Moreover, this dependency on fixed resources binds the OVN to the same geographical location.

The development process of high tech products/devices has been mostly virtualized, meaning that the design and the simulations can be done using computer programs and through online collaboration. This eliminates the need for agents/actors/affiliates to be in the same space at the same time, and reduces the dependency on material resources for prototyping. An OVN focused on the design of high tech products/devices can be geographically dispersed, like in the case of software development, and can scale to tens of thousands of agents/actors/affiliates co-creating in a swarm-like manner.

Dependency on time

Agricultural production requires a high level of time coordination and synchronicity, because some important processes are fixed in time, like seeding and harvesting. The time scale in this particular case is quite large. Since the product is perishable, important time constraints are imposed in distribution and consumption. Services might have tighter schedules and require even better time coordination.


Service of translation

A group of translators may decide to form an OVN to offer translation services. Working in a larger group allows them to take on larger projects. In this example, the service produced is translation. Almost all affiliates works with text, some work on infrastructure development and maintenance (building and maintaining the website, etc.), some work on business-related activities (find customers, outreach and social media, etc.). It is not difficult to imagine a simple mechanism for evaluating someone’s contribution. Contributions to the service (translation) are in fact very easily quantifiable: proportional to the number of words translated. We can also imagine modulators for legal, technical, scientific, literary… translations. But this is almost it. In fact, this is the model used by translators to estimate price. Once we have a clearer idea about the value system, we need to think of a set of incentives that would encourage the proper behavior, in order to keep the OVN productive. In this example, the service produced by the network is translation of text. In exchange, the network offers its affiliates some form of remuneration (can be financial, which in turn is used by affiliates to acquire basic necessities, to sustain their lives). By linking some behavioral characteristics to the value equation to affect the benefits that go to the affiliate (which is what motivates the affiliate to be part of the OVN in the first place), we influence behavior. In this case, the revenue of affiliates should be calculated from contributions to translation activities (how much text was translated), modulated by different parameters extracted from the how the contribution was made (quality of the translation, respect of deadlines imposed by the customer, overall customer service, etc.).

See Guerrilla Translation! and their wiki for example.

Service of hosting

Let’s imagine a different type of OVN, in order to better understand how the incentive system can be designed. Suppose a group of individuals forms an OVN to share a space for housing. This example is very different from the previous one, in that the benefit it offers to affiliates is not revenue, but a place to sleep. A set of incentives needs to be designed in order to induce proper behavior in this example as well. Proper behavior in this context would be to take care of the space, to participate in cleaning and maintenance, to participate in governance (participate in meetings where group decisions are made about the space), to respect other affiliates, to respect agreed upon schedule, etc. Incentives need to be linked directly to the benefits provided to the affiliate, which in this case is a place to sleep. Examples of negative incentives would be: a reduction in the number of days per week the person can use some common areas or appliances, a lower quality sleeping room, more work assigned for maintaining the property, etc. If incentives aren't directly related to the benefit that the network provides to affiliates it becomes more difficult to maintain the network well-structured and productive. This is a small network, in terms of number of affiliates, and geographically bounded.

Note related to infrastructure

We are trying to set the bases of a self-organizing OVN. In other words, the network doesn't have a predefined structure, or an initial blueprint, it emerges in reaction to environmental conditions. The infrastructure needs to be flexible enough in order to allow the network to self-organize. The design of core elements of the infrastructure needs to take into consideration key characteristics of different types of environments in order to somewhat anticipate emergent structures and to provide the conditions for them to emerge. In short, self-organization depends on infrastructure, which needs to be designed in anticipation of future states of the network, based on some understanding of environmental conditions.


Past ideas taken from Sensorica's Value System document. - INSTRUCTION: Please help integrate them to the rest of the page.