I keep reading about "Crowdsourcing" in the context of Graphic Design. I know what crowdsourcing is, but what has it got to do with Graphic Design in particular? Also there's lots about contests. It looks like a free-for-all on some of the sites like Designhill.
Crowdsourcing, as it commonly relates to Graphic design, means specifications are given to a group of people/designers and they are all asked to come up with an individual solution meeting the provided guidelines. i.e. Design a 7x10" Book cover for a book titled "My Book" by Joe Writer.
A "crowd" is used as the "source" for services to complete a singular project. There is no direct collaboration or sharing between participants and each "entry" or "submission" is singular. There's no "group effort" toward a common goal. There are merely individuals all finding independent solutions to the same design problem. (i.e. dozens or hundreds of arrows all trying to hit the same bullseye all at the same time.)
Most often these type of project assignments come with a "I'll pay the one I like" compensation package. Therefor, if 200 designers all come up with a book cover design, only one designer will be compensated.
Essentially they are "design contests" where only the "winner" gets any sort of compensation. Every other person submitting anything will be working for free.
Designers are asked to work on the speculation of possible payment. Essentially "gamble" using their aesthetics in the hopes they get picked.
Possibly helpful information here: http://www.nospec.com/
These formats greatly benefit the person/business submitting the specifications - they get a ton of work for little or no money. They take advantage of the fact many will be driven by the "contest" aspect and the "gamble" they may win.
Conversely, these "contests" are horribly detrimental to the designer(s) - 99% of them will be working for free.
It is indeed a "free-for-all" - everyone scrambling to get that tiny little prize at the end when only one will achieve that. Lots of effort for nothing or close to it.
NEVER enter ANY type of "design contest" if you wish to be a successful designer. It's not how professionals make a living.
Croudsourcing works in situations where all of the effort contributed by participants adds together to create something larger that is of greater benefit to those participants than what they could have achieved alone. It isn't necessarily decentralised and the benefit isn't necessarily equal, but there should be a collective product that is beneficial to all participants.
Legitimate crowdsourcing is something that can be done in the context of graphic design. Working together to create shared resources like fonts for instance. Broader crowdsorced projects can also benefit from the contribution of graphic design, and the designer benefits from the contributions of people with other skill sets. For instance, improving diagrams and infographics on Wikipedia articles or the documentation for a FOSS project.
Calling spec work "crowdsourcing" is at best a mistaken use of the word while engaging in an already shady practice, or more likely it's just outright lying. It fails in both sharing in producing a greater whole, and in sharing in the benefit.