Changing the Economics of Open Source

please note: We are referring to open source as the general set of open technologies (open source, open hardware, open access …etc) for more info read the FAQ

Is it possible that in our future, we can have consumer products where the underlying hardware and software are fully open?

Perhaps, but as it stands today, there is no economic incentive for the suppliers of technology to adopt this path.

Today, the development of consumer products is largely based on keeping the intellectual property proprietary (IP is where the value is) and mass manufacturing copies of the consumer goods we all use (copies are inexpensive). Naturally in economics every party in a negotiation is seeking to maximize their return and over the years this model has been carefully tailored towards maximizing the revenue of suppliers.

But what about the consumers of technology?

For an efficient economic outcome, in aggregate, consumers of technology must be able to negotiate on equal terms with suppliers to be able to maximize their utility. But for this to be possible consumers must have accurate and honest information about the items they are purchasing.

Unfortunately, An efficient outcome for the economy as a whole is not always the optimal outcome for the individual. One way to tilt the balance towards a better outcome for suppliers is by purposely misinforming consumers about the products they are purchasing. Normally this is done by advertising greater value for products (i.e. in the consumer mind) upon the basis of visual appearance, brands and other intangibles and  leaving the necessary information (technical specifications, implementation details …etc) out of reach. Therefore consumers continuously engage in unhealthy over spending habits and wasteful consumption (with the environment consequences this carries) for the economic benefit of suppliers.

But this can change, open technologies can grow to become our standard for consumer products only if, we as consumers start demanding honest and accurate information about the products we purchase, and we start valuing/purchasing technology for what it is: applied science and not magic.

It is through our collective use and financial support of open products, that we can contribute towards making of open technology a requirement and not an option.

Until then, we will work to facilitate the progress in this direction.


7 thoughts on “Changing the Economics of Open Source

  1. I recently had difficulties with the Tire Pressure Monitoring System (TPMS) on my newly-purchased car. The U.S. standard has been in place for a few years now and all American cars after a certain date must have this technology. And yet, that standard is hidden from the buyers of cars since the automotive industry wants it that way. If the standard were open then we could in theory write our own monitoring applications for tire pressure. In fact, we’d know more than the basic “one of your tires is too low” information that we have now. We’d actually know the exact pressure for each of the four tires.

    As consumers we should put pressure on the Department of Transportation to at least let us know what the standard is and how the TPMS system works, for example. Every day we pay for technology with our tax dollars and yet our own government hides this information from us, the same government which exists because of those dollars.


  2. Thanks for your comment,

    You are right, pushing the government for a policy change is one way to make a difference (for example to release more clear technical documentation on all the embedded sensors in your car – for consumer rights), but I think it is important to know who is paying for the research and development of these technologies.

    In the case of privately funded research (e.g. a company did the R&D and might be licensing the IP to others and a consortium of interested companies might devise a common standard for how the technology is to be used) it is really up to them to open only as much as they consider prudent for their business (with as minimum details as legally required), at this point, it is mostly consumer choice that can make a difference (e.g. by not purchasing products where the technical details are hidden or misleading we can put pressure on manufacturers).

    However, if it is publicly funded research (for example if the research for the tire pressure measuring device was done with public money in academia), I think it is truly essential that the research is fully opened to the public for the benefit of everyone and this is what open access attempts to do, and I think as government organizations (NSF …etc) put pressure on academic institutions, we will see more research being published under open access licenses.


    • It’s possible and even probable that a privately-funded company created the original specification for the TPMS system currently used on every car in the U.S. I would argue, though, that when the government mandates that all cars must have this same technology then, to me, it sounds like that company paid a lobbyist who then compelled the Congress to create that mandate. In my mind, that should force the technology to be known in the public domain, i.e., open sourced. I attempted to get the specs from the DOT but they basically shrugged at the request.


      • Yes that is probably the case (regarding the lobbying comment and the DOT reply) but as consumers we should create specific petitions (e.g. in platforms like and Avaaz) for more transparency on the technology that we are imposed to use (e.g. a petition to release the source for the TPMS system). However I think this might only achieve short term results. Companies invest in R&D because they know the value of the Intellectual property they are creating and they make an economic return by licensing the IP or using it to manufacture better consumers goods. By opening the IP (i.e. releasing the source) you are taking away that initial incentive, so they would lobby against any law that favors open technology in general (it doesn’t make them money).

        As consumers however we can put pressure by simply investing and owning the technology ourselves (i.e. IP funded by public capital, owned by all), in a way that is economically viable. that is partly what we are trying to create with the KipOpen project.


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