Efficiency through openness: the economic value proposition of open source software
AbstractThis study identifies the mechanisms inherent to Open Source Software (OSS) production that help fuel innovation in knowledge-based economies. We furthermore assess the impact of Open Source Software on job and skill creation in the United States. We forecast that overall employment in software development occupations is to grow substantially. According to our estimates computer specialist occupations are expected to increase by over 22%, adding 762,000 jobs in the US from 2008 to 2018. This occupational group is one of the fastest growing – twice the average growth rate for all jobs - and software development occupations enjoy an average salary across all industries that is more than twice the national average for all occupations. We estimate that the number of OSS-related software development jobs in the US is estimated to be between 801,590 and 1,201,391 jobs in 2008. This will grow to between 910,007 and 1,477,794 by 2018 according to estimates based on employment projections by the US Bureau of Labour Statistics. The economic value proposition of OSS will reverberate well beyond the software industry. The broad diffusion of software development jobs throughout the US economy suggests that most sectors are in a strong position to adopt OSS. Information technology (IT) user sectors employ the majority of computer specialists in most software development occupations: 68% of computer systems analysts, 58% of computer programmers, 61% of computer and information scientists, and 48% of computer software engineers. This suggests that OSS adoption can be usefully implemented to cut costs and boost innovation efficiency in a variety of industries. As US industries are exposed to the benefits of OSS, open innovation processes outside software development may be adopted through a process of learning and imitation. This is likely to stimulate even greater innovation efficiency gains in all sectors of the US economy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38088.
Date of creation: Mar 2012
Date of revision:
Job creation; open source software; open innovation;
Find related papers by JEL classification:
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-23 (All new papers)
- NEP-IPR-2012-04-23 (Intellectual Property Rights)
- NEP-TID-2012-04-23 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul A. David & Francesco Rullani, 2008.
"Dynamics of innovation in an “open source” collaboration environment: lurking, laboring, and launching FLOSS projects on SourceForge,"
Industrial and Corporate Change,
Oxford University Press, vol. 17(4), pages 647-710, August.
- Paul David & Francesco Rullani, 2007. "Dynamics of Innovation in an “Open Source” Collaboration Environment: Lurking, Laboring and Launching FLOSS Projects on SourceForge," Discussion Papers 07-022, Stanford Institute for Economic Policy Research.
- Alessandro Nuvolari, 2004.
"Collective invention during the British Industrial Revolution: the case of the Cornish pumping engine,"
Cambridge Journal of Economics,
Oxford University Press, vol. 28(3), pages 347-363, May.
- Nuvolari, A., 2001. "Collective Invention during the British Industrial Revolution: The Case of the Cornish Pumping Engine," Eindhoven Center for Innovation Studies (ECIS) working paper series 01.04, Eindhoven Center for Innovation Studies (ECIS).
- Alessandro Nuvolari, 2001. "Collective Invention during the British Industrial Revolution The Case of the Cornish Pumping Engine," DRUID Working Papers 01-05, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Nuvolari, A., 2004. "Collective invention during the British Industrial Revolution: the case of the Cornish pumping engine," Eindhoven Center for Innovation Studies (ECIS) working paper series 04.02, Eindhoven Center for Innovation Studies (ECIS).
- Harhoff, Dietmar & Henkel, Joachim & von Hippel, Eric, 2003. "Profiting from voluntary information spillovers: how users benefit by freely revealing their innovations," Research Policy, Elsevier, vol. 32(10), pages 1753-1769, December.
- Josh Lerner & Jean Tirole, 2004.
"The Economics of Technology Sharing: Open Source and Beyond,"
NBER Working Papers
10956, National Bureau of Economic Research, Inc.
- Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
- Bitzer, Jürgen & Schrettl, Wolfram & Schröder, Philipp J. H., 2004.
"Intrinsic motivation in open source software development,"
2004/19, Free University Berlin, School of Business & Economics.
- Bitzer, Jurgen & Schrettl, Wolfram & Schroder, Philipp J.H., 2007. "Intrinsic motivation in open source software development," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 160-169, March.
- Jürgen Bitzer & Wolfram Schrettl & Philipp J.H. Schröder, 2005. "Intrinsic Motivation in Open Source Software Development," Development and Comp Systems 0505007, EconWPA.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Henkel, Joachim, 2006. "Selective revealing in open innovation processes: The case of embedded Linux," Research Policy, Elsevier, vol. 35(7), pages 953-969, September.
- Gould, David M. & Gruben, William C., 1996. "The role of intellectual property rights in economic growth," Journal of Development Economics, Elsevier, vol. 48(2), pages 323-350, March.
- Dahlander, Linus & Magnusson, Mats G., 2005. "Relationships between open source software companies and communities: Observations from Nordic firms," Research Policy, Elsevier, vol. 34(4), pages 481-493, May.
- Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March.
- Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
- Weber, Steven, 2000. "The Political Economy of Open Source Software," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt3hq916dc, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
- Alessandro Rossi & Alessandro Narduzzo, 2003.
"Modularity in action.GNU/Linux and free/Open source sotfware development model unleashed,"
078, Department of Computer and Management Sciences, University of Trento, Italy, revised 29 Jun 2003.
- Alessandro Narduzzo & Alessandro Rossi, 2003. "Modularity in Action: GNU/Linux and Free/Open Source Software Development Model Unleashed," ROCK Working Papers 020, Department of Computer and Management Sciences, University of Trento, Italy, revised 13 Jun 2008.
- Lee Fleming, 2001. "Recombinant Uncertainty in Technological Search," Management Science, INFORMS, vol. 47(1), pages 117-132, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.