How to make money the open-source-way, but keep the commons alive? – Question 7 of 10 on ‚learning by sharing’

Open innovation – often based on open licensing and commons-approaches – is changing the business models of more and more businesses and social institutions. Before the advent of open innovation, innovation was kept within the boundaries of the firm (or research institution). In contrast, “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to markets, as the firms look to advance their technology”, scholar Henry Chesbrough, who coined the term open innovation, has put it. But what opportunities does this imply for institutions in developing countries? What are their learning opportunities?

Let’s take a look again at the global tech sector as a starting point (for more details, see Seibold 2010a). Here, the most prominent example of free and open source software development and licensing are the operating system Linux, the office suite Open Office and the web browser Firefox. Linux has shown that open-source programs can be very competitive. The reason is obvious: more people know the source code and, accordingly, can correct flaws and make other improvements.

For the private sector in developing countries, such knowledge commons provide a clear opportunity, not only for low-cost access to global state-of-the-art knowledge, technology transfer, and open peer-learning on a massive scale (see Seibold 2009, Seibold 2010a, Seibold 2010b; UNCTAD 2012: 9ff), but also because they have the potential to empower local businesses and communities in developing countries. This creates truly local open innovation by appropriating elements of outside open innovations and transforming them into a product or service that is relevant to local needs.

For many decades, a group of researchers led by the late Nobel Prize winner Elinor Ostrom has looked at how communities share ‘common-pool resources’ and ‘club goods’ over time. This network has just charted the future of global knowledge commons through its ‘First International Thematic Conference on the Knowledge Commons’ held in September 2012. It covered research areas ranging from an „Open Source Drug Discovery“ program in India to a massive push for Open Licensing of Plant Genetic Resources ¹. In all of these fields, researchers inventors and businesses are looking at how a collective build-up of knowledge can help solve protracted global problems.

The exact modes of knowledge sharing are quite complex and differ from commons to commons; However, many of these knowledge commons are starting to be built around an „open source commons“ with a “copyleft” approach. As a reminder, open source means that all future producers have access to the end product’s source material and the freedom to improve and change it. Under the copyleft approach, all modified and extended versions of the product have to be released and distributed with the same rights. This ensures that all versions are protected against misappropriation of the commons. For example, the open licensing of the International Treaty on Plant Genetic Resources for Food and Agriculture can prevent global plant companies to privatize knowledge on top of a commons, because the copyleft licensing requires them to share the improved versions again ².

In short, such an approach is a “license to innovate freely”. In the view of the author of this text, the copyleft model may turn out to be the only one, which – in the long run – secures both the „freedom to innovate“ and the „automatic expansion of the knowledge commons“ for all, who participate – and for the rest of the world as well.

We still do not know how business models reflecting open innovation and respective ground rules of international trade will evolve globally. We also do not know how much open innovation will be centered around the commons and commons-based peer production, in which (some) intellectual property cannot be privatized and which parts will in contrast remain within the realm of companies that understand open innovation in a ‘non-open-source’ way. Their strategy is often as follows: “I ask the crowd for ideas, but then I privatize the fruits of the co-creation as my innovation”. We do, however, know that more and more entrepreneurs are finding operating models based on the knowledge commons and open source.

A McKinsey report by authors Markus Reitzig and Oliver Alexy therefore predicts that open source competition will gain traction in a number of mainstream industries, such as machinery, communication equipment, medical and optical instruments or fabricated metal. “Consider construction cranes … software runs all the drive, calibration, safety and security systems … and some crane manufacturers have started to adopt open-source software” (Reitzig/Alexy 2012, section “Will open competition gain traction in your industry”).

A strong business model can be defined as “open everything, and let people pay for service”. More and more enterprises around the world are choosing this approach, also in Africa. The ict@innovation programme identified a number of successful IT business models around the free and open source software commons (FOSSFA/InWEnt 2010).

Other emerging examples of such collaborative intellectual property in Africa range from informal automotive engineering in Uganda, commons-based approaches to traditional knowledge in South Africa, commons elements seemingly present in Egypt’s independent music industry to willingness to engage with open scholarship modalities in Kenya. All were just analyzed and summed up by members of the African expert network “Open AIR” in their volume “Innovation and Intellectual Property – Collaborative Dynamics in Africa”, edited by scholars Jeremy de Beer, Chris Armstrong, Chidi Oguamanam and Tobias Schonwetter.

>>> Any questions or answers on the issue above? Please comment below!

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About ‘learning by sharing’

This blog is part of a series of 10 questions that I have extracted of my article “Learning by Sharing – „How global communities cultivate skills and capacity through peer-production of knowledge“. The piece has been released in June as part of the GIZ Online- Series „10 trends in open innovation. How to leverage social media for new forms of cooperation“. It discusses the following issues: Sustainable human development needs solutions that scale, empower, benefit, and increase ownership. Peer-to-peer learning is a potential game changer: the trick is to build learning processes around open, commons-based peer production. Only then may one achieve more freedom to know, more appropriation of tacit knowledge, more self-sustainability of demand-driven learning systems, and more ownership. In addition, the inherent fairness of an open “knowledge commons” provides opportunities for unfettered open innovation and the scaling up of development solutions. Commons-based peer learning offers a trigger to enhance skills, competencies, connections, capacities, and the agency of people and their organisations on a global scale – from the global peer-to-peer university to the community of biogas digesters producers. It provides the freedom to learn – by sharing the world’s wealth of knowledge.

–> Article on the Alumniportal / Group on “Digital Society”:
http://10innovations.alumniportal.com/learning-by-sharing.html

–> Article personal blog – Here, you can comment, “like it” or RSS it there as well
http://www.knowledge-commons.de/en/learning-by-sharing/

Previous Questions:

– Where to find free knowledge for open innovation in development? – Question 6 of 10 on ‚learning by sharing’
– Peer production of knowledge: a game-changer for development cooperation? – Question 5 of 10 on ‚learning by sharing’
– What makes learning communities self-governed & fun? – Question 4 of 10 on ‚learning by sharing’
– How to build learning communities, that work peer-to-peer? – Question 3 of 10 on ‚learning by sharing’
– What makes people share knowledge? – Question 2 of 10 on ‚learning by sharing’
– What is commons-based peer learning? – Question 1 of 10 on ‚learning by sharing’