EU Commission report: open source importances for the Union’s innovation and competitiveness

The European Commission recently published a comprehensive study on how open source and standards can contribute to the Union’s capacity for an independent, innovative and competitive internal digital market. Econometric (economic forecast) analysis from 2018 shows that open source accounts for 65 to 95 billion euros in economic value within the Union. Furthermore, the report highlights a profitability analysis ratio of 1: 4 for every euro invested and that the work effort developers contribute to open source projects corresponds to a cost of labour of almost one billion euros within the EU. This is a brief summary of the report to highlight different policies, mechanisms and regulations to contribute to the competitiveness of the Union and the public sector.

The report is based on 900 questionnaire responses from European developers of open source. Among the motives that were ranked highest for contributing to open source projects were finding common technical solutions, avoiding supplier dependency, developing cutting-edge technology with high quality, sharing knowledge and participation in collaborative communities. It also turned out that few of the participants applied for patents for solutions, which strengthens the perception of the interest in participating in co-creation and community development in order to find and share technical solutions to common problems.

Developers who contribute most to the open source ecosystem are usually micro, startups (1-10) and small (11-50) companies within the EU. This is different from the USA, where large tech companies contribute the most. Major US companies’ participation in open source projects is an integral part of their business strategy and model for being competitive on a global digital market. The main advantage of open source according to the respondents was the interoperability of software and programs thanks to the use of open standards often used in open source projects. This contributed to indirect effects in the form of positive network externalities when several actors participated in collaborative development by sharing knowledge and ideas across organisational boundaries. Other benefits that were reported were increased innovation capacity, safety, quality and knowledge sharing.

The report highlights that policies to use open source in the public sector have often failed due to cultural differences and a work culture that does not promote collaborative development and participation. Although there are laws in some European countries to support and utilize open source programs and components. The EU’s laissez-faire approach has led Europe to lag behind the United States, Asia and China. Due to the lack of concrete implementation policy and the fact that the public sector has not fully realised the potential of innovation and the economic benefits of open source.

The report identifies various policy recommendations to the EU Commission to enable digital autonomy and competitive development within the Union. These are some of the recommendations the report suggests;

  • Open source code and standards need to permeate the entire work place culture and seen as a strategic imperative to be part of the digital development and transformation
  • Stipulate requirements for open source code and standards in the acquisition and development of digital infrastructure, platforms, AI, IoT and other important digital technology
  • Direct or indirect financial contributions to open source projects
  • Investment in high-risk projects through research and development of open source, standards and hardware

Link to EU Commission report: The impact of Open Source Software and Hardware on technological independence, competitiveness and innovation in the EU economy

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