This chapter showcases the relationship between free and open source software (FOSS) and economics. FOSS is unique in that it is at the same time state of the art technology, a commodity, and a public good. FOSS communities are social groups of individual and organisational contributors that participate voluntarily in the production of public information goods. Furthermore, communities are able to resolve issues without the coordination provided by a central authority like the state. This shapes how FOSS collaboration relates to market competition and the value propositions of businesses. Today collaboration spans both unpaid or volunteer participation and industry contributions that are made in the course of employment or under the guidance of a commercial sponsor. This chapter develops a basic taxonomy based on a combination of the revenue model, the type of good, and the differentiating aspects of FOSS-based products.

This study analyses the economic impact of Open Source Software (OSS) and Hardware (OSH) on the European economy. It was commissioned by the European Commission’s DG CONNECT. It is estimated that companies located in the EU invested around €1 billion in OSS in 2018, which resulted in an impact on the European economy of between €65 and €95 billion. The analysis estimates a cost-benefit ratio of above 1:4 and predicts that an increase of 10% of OSS contributions would annually generate an additional 0.4% to 0.6% GDP as well as more than 600 additional ICT start-ups in the EU. Case studies reveal that by procuring OSS instead of proprietary software, the public sector could reduce the total cost of ownership, avoid vendor lock-in and thus increase its digital autonomy. The study also contains an analysis of existing public policy actions in Europe and around the world. The scale of Europe’s institutional capacity related to OSS, however, is disproportionately smaller than the scale of the value created by OSS. The study therefore gives a number of specific public policy recommendations aimed at achieving a digitally autonomous public sector, open R&D enabling European growth and a digitised and internally competitive industry.

Standards and open source development are both processes widely adopted in the ICT industry to develop innovative technologies and drive their adoption in the market. Innovators and policy makers assume that a closer collaboration between standards and open source software development would be mutually beneficial. The interaction between the two is however not yet fully understood, especially with regard to how the intellectual property regimes applied by these organisations influence their ability and motivation to cooperate. This study provides a comprehensive analysis of the interaction between standard development organisations (SDOs) and open source software (OSS) communities. The analysis is based on 20 case studies, a survey of stakeholders involved in SDOs and OSS communities, an expert workshop, and a comprehensive review of the literature. In the analysis, we differentiate according to the governance of SDOs and OSS communities, but also considering the involved stakeholders and subject matter. We discuss the preconditions, forms and impacts of collaboration, before we eventually focus on the complementarity of the different Intellectual Property Right (IPR) regimes. Finally, we derive policy recommendations addressing SDOs, OSS communities and policy makers.