Google has just agreed to pay about £889 million for YouTube, a website that barely existed 18 months ago and does not turn a profit, yet attracts 100 million viewers a day. If ever there were proof that the next big thing is us, this is it.

Google’s service is based on extracting insight from our collective intelligence: its software comes up with answers to your queries by ranking web pages by the number of links that people have made to them — each link is counted like another vote that the page is significant. Google’s software mines this collective intelligence.

YouTube, meanwhile, started with two people trying to share some video footage of a dinner party online. It has created a way for pro-am video-makers to publish and share what they record on camera phones, webcams and digital cameras. As with Google, its ethos is democratic: people can vote on what they like. As a result the most unlikely videos — pensioners ranting about the state of the world, a man losing his cool on the subway — become smash hits. On YouTube, as yet, we do not watch stars and celebrities, but ourselves. Viewers are potential producers and participants. We are the action.

Google and YouTube are not alone. Wikipedia, an online encyclopaedia created and maintained almost entirely by amateurs, attracts more visitors than The New York Times online, carries more content than almost all other encyclopaedias combined and threatens to dwarf the services offered by large publishing companies.

Linux, a computer operating system started by a wispy Finnish computer science student and at first developed almost entirely by unpaid volunteers, is the main challenger to the operating system created by Microsoft, one of the world’s largest corporations.

Most of the internet would be unthinkable without collaboratives, mostly made up of volunteers, who have created free, open-source software. If you send and receive e-mail you are probably doing so thanks to a free, open-source programme called Sendmail, which powers perhaps 80 per cent of the world’s mail servers. The system that keeps internet addresses in order depends on another open-source programme called BIND. If you saw The Lord of the Rings, you watched computer graphics made on machines that run Linux. A Google inquiry is answered by thousands of computers all running Linux.

If you visit websites, you are likely to rely on an open-source programme called Apache, which is used on about 65 per cent of active websites. Apache was not conceived in the top-secret R&D lab of a big computer company. It started with a software engineer called Brian Behlendorf, who, in 1995, volunteered his server at Hotwired — one of the first webzines — for use as a shared resource by eight developers with whom he was working. They set up a public e-mail list which, on Day 1, attracted 40 other engineers. In three months there were 150 subscribers. By the end of the year, this loose collective released a working version of Apache that quickly came to dominate the market, overtaking offerings from mainstream companies.

Welcome to the world of We-Think. We are developing new ways to innovate and be creative en masse. We can be organised without an organisation. People can combine ideas and skills without a hierarchy.

The record industry has had its business model upended by hackers creating file-sharing systems that have as their common currency the MP3 file, an innovation given away by its creator, a publicly funded German computer scientist.

The main alternative to the might of Wal-Mart is not another hypermarket chain but eBay, a trading system through which millions of participants buy and sell to strangers, setting their own prices, advertising their own products, doing their own deals and deciding how to ship their products.

The most successful computer games, such as Sim City, Ultima Online and Everquest, outsell Hollywood films because they allow players to tamper with and change the action, creating their own characters and storylines. These player-developers then contribute their innovations, free, back to the larger community playing the game.

The next wave of entertainment is entire immersive worlds — the likes of Neopets and Second Life — in which people can adopt a character, learn, trade, fight, make love and create the action together. More than 95 per cent of the content of Second Life — a world that has universities, stock exchanges, museums — is created by its inhabitants: the 800,000-plus players. More than 7,000 businesses make real profits by selling through Second Life.

The guiding ethos of this new culture is participation. The point of the industrial-era economy was mass production for mass consumption — the formula created by Henry Ford. We were workers by day and consumers in the evenings or at weekends. In the world of We-Think the point is to be a player in the action, a voice in the conversation — not to consume but to participate.