A few days ago I came across this nice quote by a Nokia senior manager:
“We believe the world is changing and the competitive advantage comes from how many others can you get from participating in this network. This network becomes more important than trade secrets.”
The quote appears in the context of a study presenting the collaboration initiated by Nokia a few years ago during the development of its internet tablet. Through a series of interviews with Nokia senior managers and developers, contracted open source businesses and independent developers, we are shown how Nokia opened up software, leveraged externally developed open source technologies and encouraged contributions by both independent developers and competing businesses.
“We have evidence that some of our competitors are now looking at our code and they are investigating if they could use our code in their products. You might say that we help them now to get their products out fast.[...] But if we had not put it out there we could not have used the OSS communities who have already helped us to develop that code.”
Does this sound familiar to those of you who are aware of open development? The study points out that in the process of opening out the source code and encouraging external collaboration Nokia created a new market for the internet tablet, but more importantly it learned how to cooperate with a diverse community of employers, volunteers and contractors:
“It’s all about the process… You develop this openly within the communities and you try to synchronize your own work with the heartbeat of the communities. Some companies now understand this better than others. We certainly have done our learning. We have made some mistakes too on this front”
Moreover, by allowing external developers experiment with the software, Nokia enabled innovations previously seen as unrealistic by its own engineers:
“I think from my point, if you let people change things [...] and document them and open them up so people can hack their own stuff, you never know what is going to happen, what kind of things people are going to write for your device which ultimately could make it sell millions if someone writes the killer application for it”
Again, this is likely to be common sense to open source communities, who are familiar with governance models that document ways in for potential external contributors. The interesting bit is that increasingly the corporate sector is looking at open development as inspiration for their R&D and innovation policies.
Two common innovation models described in the study are the so-called “private investment” and “collective action” models. In the “private investment” model innovators commit their time and resources if they can get appropriate returns from these investments. By contrast, the “collective action” model assumes that publicly subsidised innovators work for the public domain, generally associated with non-rivalry and non-exclusivity in consumption. More recently a third, middle ground model called “private-collective” was identified, where the innovator uses private resources for public good innovation.
As is the case with open source development, this model seems counter-intuitive in the first instance. Why should one make one’s innovations available to all, and why should one pay for something that anyone else can use for free? In fact, the study points out, the innovator working within such a model often receives higher benefits by contributing to the public goods creation then by only free riding on its production by others.
This appears to be true beyond independent innovation. As the Nokia example demonstrates, companies themselves can benefit by encouraging the creation of publicly available innovations. The quote at the top of this post suggests that networking within appropriate communities can be more important than jealously guarding the secrets of the trade. This is a new type of asset for the companies, which if explored in the open development spirit can become an important source of competitive advantage.
And yes, in this respect OSS Watch’s expertise in open development becomes more valuable by the day.
