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Community Enterprises - Aliens under Attack

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  • Bruno S. Frey
  • Roger Lüthi
  • Margit Osterloh

Abstract

Management research has long focused on for-profit organizations that produce privately owned resources based on central authority and within well-defined boundaries. In recent times, a new kind of enterprise has emerged that we call Community Enterprises. They are private sector not for profit organizations that produce innovation resources and make them freely available to follow-on creators. Starting in the software industry, Community Enterprises have become leading providers of fundamental building blocks for innovation. They create enormous economic value by producing generative technologies that everyone can use and improve. However, this value is hardly measurable. Most importantly, Community Enterprises collide with the appropriation strategies of firms, which aim at acquiring exclusive control of useful resources. They are a major competitive force to for-profit firms and therefore are under attack. We analyze Community Enterprises as aliens in the market economy to which they provide essential resources. We find that market regulation cannot ensure their activities. Instead, we argue that the easiest way to do so is to support Community Enterprises through terms and conditions on government procurement and funding.

Suggested Citation

  • Bruno S. Frey & Roger Lüthi & Margit Osterloh, 2011. "Community Enterprises - Aliens under Attack," CREMA Working Paper Series 2011-08, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2011-08
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    References listed on IDEAS

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    3. Bruno S. Frey & Stephan Meier, 2004. "Social Comparisons and Pro-social Behavior: Testing "Conditional Cooperation" in a Field Experiment," American Economic Review, American Economic Association, vol. 94(5), pages 1717-1722, December.
    4. Gächter, Simon & von Krogh, Georg & Haefliger, Stefan, 2010. "Initiating private-collective innovation: The fragility of knowledge sharing," Research Policy, Elsevier, vol. 39(7), pages 893-906, September.
    5. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
    6. James Bessen & Michael J. Meurer, 2008. "Introduction to Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk," Introductory Chapters,in: Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk Princeton University Press.
    7. Ernst Fehr & Urs Fischbacher, 2002. "Why Social Preferences Matter -- The Impact of Non-Selfish Motives on Competition, Cooperation and Incentives," Economic Journal, Royal Economic Society, vol. 112(478), pages 1-33, March.
    8. B. Demil & X. Lecocq, 2006. "Neither Market nor Hierarchy nor Network: The Emergence of Bazaar Governance," Post-Print hal-00185026, HAL.
    9. Henkel, Joachim, 2006. "Selective revealing in open innovation processes: The case of embedded Linux," Research Policy, Elsevier, vol. 35(7), pages 953-969, September.
    10. Lindenberg, Siegwart, 2001. "Intrinsic Motivation in a New Light," Kyklos, Wiley Blackwell, vol. 54(2-3), pages 317-342.
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