Monday, February 25, 2008

Open source and innovation.

I was just looking at Adobe's new open source site, when I came across Dave McAllister's blog. I had to comment on one particular entry regarding "the belief that open source does not innovate". I've left a copy of my response here.

RE: "assumption that innovation == business"
From the work of Joseph Schumpeter, innovation is the "future source" of long term profits for any organisation. Innovation is not necessary for a business today, merely for a business tomorrow. This is wrapped up in the concepts of creative destruction. The assumption should be that "innovation == future business".

RE: "open source does not innovate"
Innovation is the first attempt to put an idea into practice (Prof. Jan. Fagerberg). The licensing arrangements are hence irrelevant. However, open source does promote distribution of an innovation by reducing any barriers to adoption. This distribution results in further commoditisation (the movement towards more of a commodity) and hence the "commoditization trend" that you highlight. I provided a link to my talk at Web 2.0 which covers this, just in case it is of interest.

Open source therefore promotes commoditisation. However, new stuff (aka "creative destruction") is built upon existing commoditised services. Without commodity-like power (electricity), data processing (silicon chip) and communications (internet) there would be no Google. Hence open source promotes further innovation by accelerating the innovation process in much the same way that the internet, network effects and standards have.

The other effect that open source has, is to do with leveling the inequality between the distribution of ability and the distribution of opportunity. Rich companies and countries don't have a natural monopoly on ability, they just have more opportunity. So you can say "open source promotes innovation".

RE: "commodity and innovation are inverse"
Yes, they are but they are also part of the same overall process.

So overall :

  • "open source promotes innovation"
  • "innovation == future business"
  • "commodity and innovation are inverse and inter-dependent"

Ideally the question should really be: "Are there any profitable businesses which would not exist today if there was no concept of 'open source'?"