| "To use Schumpeter's phrasing, it is easier to see precisely the destructive side of creative destruction, than it is to see the creative side."18
The current software industry is going through a phase of creative destruction brought about by the increasing popularity of FOSS. Overall, the numbers of software projects being developed in the mold of FOSS is staggering. SourceForge.net hosts almost one million users (coders), involved in some way with approximately one hundred thousand projects. Moreover, these coders and their projects are distributed across the globe--FOSS has no real geographic barriers. These figures speak volumes for FOSS, indicating that there must be something that is right about the philosophy. The fact that FOSS, in general, gives the end user the freedom to use, to copy, to modify, and to redistribute code, changes the producer/consumer dynamic. Producer and consumer can be one and the same, and interchangeable.
Granted, most users will not aspire to be coders. Nevertheless, the FOSS philosophy maintains that users must be guaranteed the freedom to use code, to share code, and to improve code. Eric Von Hippel, in 1988, posited that "users, when they are empowered to do so by technology and by the legal and economic structures in which that technology is embedded, will innovate more quickly and effectively than will manufacturers."19 Essentially, this is one significant advantage of FOSS: the ability to innovate rapidly and effectively. And by so doing, the FOSS output can and will equal, or in some cases exceed, the quality of the other methods of software development.
The economic model of open source is based on a different model to the conventional "blend of exclusive property rights, divsions of labour, reduction of transaction costs, and the management of principal-agent problems."20 And though different, the open source is founded squarely upon those very same property rights as is the conventional model. However, unlike the conventional notion of property, "open source is configured fundamentally around the right to distribute, not the right to exclude."21 The FOSS philosophy holds that the owner/author should maintain control over the distribution of property, moreso than control over exclusion. For FOSS, distribution and inclusion are seen as necessary and beneficial. This insistence by FOSS on the right to distribute does not preclude commercial interest or investment in software development. FOSS applications such as GNU/Linux, Apache, MySQL, PHP, and Zope produce very lucrative returns to FOSS coders and giant corporations alike.
According to Schumpeter, new methods of production, new markets, and new forms of industrial organization drive the wheels of capitalism. This in turn contributes to creative destruction. FOSS' novel mode of production and industrial organization probably will generate a measure of creative destruction. But as the development of technology over the last two centuries has shown, more often than not, an advancement in technology outweighs the destruction of the older methods being replaced. Newer, more technologically advanced methods tend to be more efficient, and as such, provide more value and better returns. So, will the FOSS methodology prove to be a benefit that outweighs the creative destruction of the current conventional models? No doubt, the market will let us know.
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