(FORTUNE Magazine) – You think we already live in a global economy? You ain't seen nothin' yet. Here's how Procter & Gamble recently expanded its research staff: With the help of an Internet startup named InnoCentive, P&G now farms out what an executive calls "gobbledygook chemical synthesis problems" to a global network of scientist freelancers. Solutions have come from a U.S. patent attorney, a grad student in Spain, a chemist in Bangalore, and a small Canadian company that unexpectedly used physics to solve a chemistry problem.

The power of the Internet to level and expand markets never abates, and now we're seeing the start of a Net-driven revolution in R&D. Says InnoCentive CEO Darren Carroll: "This is the democratization of science. Your research will be judged on its scientific merits, not where you went to school or where you live."

Pharma giant Eli Lilly founded InnoCentive in 2001 as a way to speed innovation while at the same time creating a for-profit company. The profitability part of the equation remains elusive, but InnoCentive has solved more than a dozen scientific problems for Lilly. Executives knew they were onto something early, when they posted a chemical-synthesis problem that a Lilly scientist had estimated might take him a couple of months. A promising potential solution came in from Kazakhstan within 72 hours. Have no doubt that scientific smarts are truly global. Working with partners like Moscow State University and the Chinese Academy of Sciences, InnoCentive has recruited and registered what it calls its "solver" base of more than 50,000 scientists in 150 countries. While the largest single group of solvers is in the U.S., China will surpass it by June, Carroll says, with India and Russia not far behind.

Here's how the service works: "Seeker" companies put problems online anonymously with a deadline and a promised award, ranging from $5,000 to $100,000. InnoCentive e-mails solvers whom it thinks might be interested, though any registrant can take a crack. Solvers, who so far have received as much as $75,000, must surrender all intellectual-property rights before they're paid. Some 50 problems have been solved.

InnoCentive is a hub for science much as Monster.com is a hub for jobs and eBay for products. The 30 seeker companies now include, besides Lilly and P&G, Dow Chemical, BASF, and Syngenta. Each pays InnoCentive a fee to use the site and a percentage of the award for solved problems, which may be in chemistry, biology, biochemistry, or materials science.

Mark Zettler, a top R&D executive at Dow Chemical, says networks like InnoCentive represent a "paradigm shift in R&D." Dow has found that just putting a problem online can fairly quickly flush out a solution somebody somewhere already has sitting on a shelf. The solution rate for companies using the site ranges between 20% and 50%.

InnoCentive should accelerate innovation even as it lowers costs for companies and ultimately prices for consumers. (One seeker has found that this process delivers six times the ROI of conventional R&D.) But it also suggests how vast the changes are that we're likely to see in coming years in the market for jobs and skills. Costs are lower in part because a Kazakhstani scientist's time costs a lot less than that of a Ph.D. in, say, Ohio. As the offshoring controversy has underscored, these days it matters less where you live than whether you have the talent and knowledge people want. Says Alph Bingham, the Lilly executive who thought up InnoCentive: "There is a whole world of smart people out there."

DAVID KIRKPATRICK is senior editor for Internet and technology. His column also appears weekly on fortune.com and by free e-mail subscription. E-mail him at dkirkpatrick@fortunemail.com.