Open vs closed source software: The quest for balance

“Governments are increasingly interested in promoting open
source software. Yet policymakers have seldom laid out any clear
theoretical or empirical justification for these policies. This
column explores recent studies suggesting that open source and
proprietary software strengthen each other and should co-exist
– too much open source could actually be a bad thing.

“Open source software (OSS) like the operating system Linux is
marked by free access to shared source code that is developed in a
public, collaborative manner. While most of this activity was
originally non-commercial, over the past decade companies have been
asking themselves whether similar OSS methods can be made to earn a
profit. This has led to an explosion of OSS-based business models
and investments throughout the information and communications
technologies sector (Ghosh et al. 2002, Dahlander and Magnusson
2005, Lerner et al. 2006).

“Governments are similarly intrigued and have begun
experimenting with various pro-OSS measures including procurement
preferences, tax breaks, and grants (Lerner and Tirole 2005, CSIS
2008). At first, the implicit policy assumption seemed to be that
OSS was inherently more efficient than proprietary, or “closed
source”, software (CSS)1.”