Open Source Software: A $8.8 Trillion Global Asset, New HarvardStudy Finds
Cambridge, MA – A new study by Harvard Business Schoolresearchers has revealed the staggering economic value of open source software (OSS), a global public good that powers much of the technology we use daily. The study, published in theHarvard Business School Working Paper Series, estimates the total demand-side value of OSS to be a staggering $8.8 trillion, dwarfing the supply-side valueof $4.15 billion.
The study, led by Professors Manuel Hoffmann, Frank Nagle, and Yanuo Zhou, analyzed data from millions of global firms to understand the true impact of OSS. They found that firms would need tospend 3.5 times more on software than they currently do if OSS did not exist. This means that the free availability of OSS has significantly reduced costs for businesses worldwide, contributing to a more efficient and innovative global economy.
The value ofa non-pecuniary product like OSS is inherently difficult to assess, said Professor Nagle. While previous studies have focused on the cost of recreating OSS, our research delves deeper into the demand-side value created by its widespread usage.
The researchers calculated the demand-side value by estimating the costeach firm would incur if they had to build the OSS they use internally. This approach highlights the significant contribution of OSS to individual businesses and the global economy as a whole.
The study also found that the top six programming languages in their sample, including Python, Java, and JavaScript, account for a whopping 84% of the demand-side value of OSS. This underscores the importance of these languages in driving innovation and economic growth.
Furthermore, the study reveals that 96% of the demand-side value is created by only 5% of OSS developers. This highlights the disproportionate impact of a small number of highly skilledindividuals on the global economy.
Our findings demonstrate the immense value of OSS and the critical role it plays in driving innovation and economic growth, said Professor Hoffmann. This research underscores the need for continued investment in OSS development and the importance of fostering a collaborative environment for its continued success.
The study’s findingshave significant implications for policymakers, businesses, and individuals. It highlights the need for:
- Increased investment in OSS development: Governments and businesses should prioritize funding for OSS projects to ensure its continued growth and innovation.
- Promoting a collaborative OSS ecosystem: Fostering a supportive environment for OSS developers, including open communication,shared resources, and intellectual property protection, is crucial for its long-term success.
- Raising awareness of the value of OSS: Educating policymakers, businesses, and the public about the economic and social benefits of OSS is essential for its continued adoption and growth.
The Harvard Business School study provides compelling evidence of theimmense value of OSS and its crucial role in the global economy. Its findings serve as a call to action for policymakers, businesses, and individuals to recognize and support the continued development and adoption of this vital public good.
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