Inside Views: The Development Agenda of Free Software

Subject: [bytesforall_readers] Inside Views: The Development Agenda of
Free Software
Date: 29 Mar 2007 04:38:30 -0700, Thu, 29 Mar 2007 01:42:49 +0530
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Inside Views: The Development Agenda of Free Software

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By Rishab Aiyer Ghosh and Karsten Gerloff, UNU-MERIT

The Development Agenda put forward by many World Intellectual Property
Organization member states seeks in part to fulfil WIPO's mission to
"promote the use and protection of works of the human spirit."

A major study published by the European Commission1 on 11 January,
2007 highlights how "works of the human spirit" - in the field of ICT
- are frequently created through open collaboration. Importantly, this
model transcends the notion of "technology transfer" - which assumes
that innovation mainly occurs in rich countries and is passed on to
less developed ones - to encourage collaboration and innovation by any
participant anywhere.

Although the main focus of the European study is free software (also
called Open Source Software or - in the report - FLOSS for
Free/Libre/Open Source Software), it demonstrates the need to set up
policies that recognise the value of commons-based models for
knowledge.

One of the most startling facts contained in the FLOSSIMPACT report is
the real economic value of free software. Commercial firms would need
to spend 12 billion euro or more than 160,000 person years to produce
the equivalent of what is currently available as free software.
Readers were also surprised to learn that firms have invested an
estimated 1.2 billion euro in developing free software that is often
available free of charge, in addition to being free to use, study,
modify and share.

But while these numbers are spectacular, we must look deeper to
understand the true impact of free software on the economy.

In the software market, by far the most money is made in services and
the development of tailor-made software. In the EU and in the US,
under one fifth of software investment is in (proprietary) packaged
software; the rest is in custom software and in-house software.

In terms of jobs, firms selling proprietary packaged software account
for well below 10 percent of employment of software developers in the
US. Custom software developers and service providers account for about
a third. But the majority of programmers work for "user" organizations
such as banks, the retail and manufacturing sectors and government.

The common argument against the use of free software in development -
"what's the economics if you can't sell software you make" - is
demonstrated to be false even for the US, with the largest information
technology (and proprietary software) industry. As the software jobs
and investment figures show, a small minority make money selling
software. Most organizations - and a vast majority of programmers -
make money selling their time spent writing or supporting software,
but not selling the software itself. This is in fact the economic
model of free software: sell potentially everything other than the
software itself. The report shows that it is the proprietary software
industry that is an anomaly in today's software market, with which the
economics of free software is more in tune.

Learning by Doing

This suggests that the danger of free software cannibalising
employment in the proprietary sector is rather small. Rather than
disappearing, most developer jobs will become increasingly free
software-related. This potential to add value to software is
particularly true for the vast majority of countries that do not have
a major proprietary packaged software development industry.

Free software provides further benefits for developing countries. One
obvious factor is cost. With no license fees to be paid, and no
upgrade choices imposed by vendors, the report demonstrates that costs
can often be much lower with free software, especially in the long
term.

A second important feature of free software is adaptation, especially
to local needs. In many parts of the world, free software communities
have allowed computers to reach people who were previously ignored by
proprietary vendors. For instance, KhmerOS, a free software
initiative, first provided Khmer speakers - the majority of the
population in Cambodia - the ability to use computers in their own
language across several application areas.

Developing countries need to avoid being locked out of acquiring
skills and competencies. Skills are crucial to technological take-up
and innovation. The report cites recent studies demonstrating that the
process of learning and adapting software helps users to make
technology truly their own. They become creators of knowledge, rather
than merely passive consumers of proprietary technologies.

Free software works as a free-of-charge high quality training
environment. For a budding programmer, participating in free software
projects works like an informal apprenticeship. She not only hones her
technical skills but also learns about teamwork and management.
According to surveys cited in the report, such skills are often more
effectively learnt through community participation than from formal
courses.

The report further shows that employers recognise this value of free
software communities, and believe that proven participation in such
communities can compensate for a lack of a formal degree in computer
sciences. The earning capacity of participating developers grows, even
without an explicit investment in formal training.

Such informal apprenticeships are, in effect, a form of technology
transfer between those who pay for formal training and those who do
not, or cannot. Knowledge flows from big companies to small ones and
from rich countries to poorer ones. As the necessary skills spread,
business activity increases.

Local Innovation

Taken together these experiences help bolster another key finding of
the report: that free software can generate greater economic growth by
allowing local economies to retain a higher share of value added
locally.

The report cites data from several countries that indicates a growing
demand for jobs involving free software applications. Thirty percent
of job postings studied referred to free software applications,
compared to 70 percent that referred to proprietary software.

Since free software allows local businesses to adapt software to local
needs, and does not require the payment of royalties to the original
author, it allows local businesses to provide "deep support" which is
of higher value than the "shallow support" provided for proprietary
software. When problems arise with proprietary software they can only
be fixed by the proprietor, limiting the role of local small
businesses. With free software on the other hand, a local business is
limited only by its skill levels, not by access to the code or the
right to change it. Not only can much more value be generated locally,
it can also lead to wider recognition for local innovators since
improvements can be fed back to the global market.

In addition to the clear advantages of retaining a higher share of
value-added locally, there is an additional compelling reason for
encouraging FLOSS use in developing countries. Any support for the
proprietary software requires the payment of licence fees and other
royalties for the use of the proprietary software that are rarely
retained locally. Free software allows local economies to regain
independence from vendors while binding them closely with global
developer communities of training and support.

Policy support required

At first sight, one might assume that given these advantages, free
software would surely prevail in the market. But this is often not the
case. If a country wants to make the most of the benefits of free
software, it will need to develop proactive policies, as recommended
by the report.

Two key recommendations concern the government role in promoting
lock-in and monopolies, through government procurement and education.
The report demonstrates that government procurement of software is
often anti-competitive, by preferring specific vendors rather than
providing for full competition based on functional specifications and
open standards. This has led to a situation where governments are
"locked in" to specific technologies, finding it hard to change even
if they want to.

The report suggests ways to achieve vendor independence through truly
competitive procurement practices that put an emphasis on open
standards. This entails revising government regulations that may
require citizens and the businesses that interact with them to buy
software from a specific provider.

In education, the report warns of the "lifetime vendor lock-in"
created by teaching students how to use specific applications, rather
than teaching them skills, for instance, Microsoft Word rather than
word processing. Even if the proprietary software may be available at
a low cost for educational use, once students graduate they are locked
in to the specific vendor's product for which they and society at
large will continue to pay. The report highlights policy innovations
in the relatively underdeveloped Spanish region of Extremadura to show
how governments can support widespread IT education through the use of
free software.

Delegates involved in the WIPO's Development Agenda negotiations have
an opportunity to propose strategies to level the playing field in
this area, and make the most of a successful new model of
collaborative innovation and technology dissemination. If they
recognise commons-based approaches to managing knowledge, this would
truly "promote the use and protection of works of the human spirit."
We should not waste this opportunity.

Links:

* The full report is available at http://flossimpact.eu/.
<http://flossimpact.eu/.>;
* A UNU-MERIT policy brief on the topic of free software and
economic development by Rishab Ghosh and Philipp Schmidt can be
downloaded at
http://www.merit.unu.edu/publications/pb/unu_pb_2006_01.pdf
<http://www.merit.unu.edu/publications/pb/unu_pb_2006_01.pdf>;

Rishab Aiyer Ghosh
Rishab Aiyer Ghosh is the lead author of the FLOSSIMPACT report, a
collaborative effort involving over 20 contributors across five
research institutes. A senior researcher at UNU-MERIT, Rishab has over
the past 12 years published extensively on Free/Libre/Open Source
Software (FLOSS), exploring its economic as well as technical aspects.
He is also a founding editor of one of the first open access journals
on the Internet, First Monday.

Karsten Gerloff
Karsten Gerloff is a researcher at UNU-MERIT. Coming from a background
in the cultural sciences, his research interests include the social
effects of technology, in particular free software. He also works on
topics concerning access to knowledge, such as copyright and patent
policies. Before joining Rishab Aiyer Ghosh's research group, he
worked with the Free Software Foundation Europe.

About UNU-MERIT

UNU-MERIT is a joint research and training centre of United Nations
University (UNU) and Maastricht University, The Netherlands. UNU-MERIT
provides insights into the social, political and economic factors that
drive technological change and innovation. The centre's research and
training programmes address a broad range of policy questions relating
to the national and international governance of science, technology
and innovation, with a particular focus on the creation, diffusion and
access to knowledge.

UNU-MERIT website: http://www.merit.unu.edu <http://www.merit.unu.edu>;

Footnote

1 Disclaimer: The report was prepared by a team of independent
researchers and was the outcome of a study commissioned by the
European Commission. It represents the views of its authors and not
those of the European Commission. The report's publication does not
reflect any change in European Commission policy, which remains
technology neutral and favours open competition, interoperability,
standards and vendor independence.

This work is licensed under a Creative Commons License. All of the
news articles and features on Intellectual Property Watch are also
subject to a Creative Commons License which makes them available for
widescale, free, non-commercial reproduction and translation.

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