Building Open Source Hardware Business Models

Building Open Source Hardware Business Models

Copyright: © 2023 |Pages: 30
DOI: 10.4018/978-1-6684-4785-7.ch003
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Abstract

Open source hardware (OSH) initiatives are collectively managed projects enabled by the internet and digital fabrication tools. They allow people to create products in a cheaper, faster, and more efficient manner. To date, there is no strategic and actionable framework using the commons theory for analyzing how these hardware initiatives develop economically effective and sustainable business models. Based on an analysis of the business models of 27 community-based and community-oriented OSH initiatives studied over a 3-year period, this chapter presents such a framework. The five-stages spiral framework offers to guide companies and startups involved in OSH to interact with their surrounding innovation ecosystems progressively, enrich their value propositions and grow in impact.
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Background

Digital Knowledge Commons

The Commons Theory is an intriguing boundary-spanning theory, expressing the transition from hierarchical and proprietary logic based on closed property, to a decentralized, contributive logic of structured openness managed by formal and informal institutional mechanisms. Choosing the Commons theory as a theoretical base offers a feasible construct from which to study how open source hardware initiatives grow while opening up their core innovation to a wider community.

The Theory contends that Digital Commons are a self-organized social system for the long-term stewardship of non-depletable and non-rivalrous resources preserving shared values and community identity, and are subject to social dilemmas. Unlike Natural Commons which are scarce, the particularity of Digital Commons is that the more they are used and shared, the more efficient, cheaper and transparent they become. They furnish raw material for ideas and need to be kept open in order that knowledge circulate (Bollier, 2014; Litman, 2014; Raworth, 2017; Hess & Ostrom, 2011).

In the case of free and libre open source hardware (FLOSH) because the building plans, assembly instructions, and bills of materials are published on a digital platform, such as GitHub, they are Digital Knowledge Commons. Eric Von Hippel (2005), in the concluding insights of his book Democratizing Innovation writes, “As innovation becomes more user-centered, the information needs to flow more freely and in a more democratic way, thereby creating “rich intellectual commons . . . [and] attacking a major structure of the social division of labor.”

Kate Raworth (2017) explains that the Commons theory is powerfully disruptive, as it addresses novel configurations in value creation and capitalism through distributive and regenerative design. The notion of “distributive” means easy to replicate. Anyone with an Internet connection can entertain, inform, learn and teach worldwide.

Digital fabrication technologies are the essence of distributive design and manufacturing as they blur the line between producers and consumers. Applied to industry, the term distributive manufacturing means democratizing access to manufacturing. The idea is to make technology more robust, more modular and more freely available, globally empowering global citizens to break away from currently unsustainable supply chains (Rifkin, 2014, p.8; Kumar et al., 2020; Rauch et al., 2016).

The other disruption offered by Digital Commons is that of being regenerative by design. The concept of a circular economy is the intention of transforming industrial manufacturing from extractive to regenerative design by using renewable energy and eradicating waste by design. Diverging from the take-make-and-waste mentality, waste becomes “food” as biological and technical materials are never used up and thrown away but circulated again and again through cycles of reuse and renewal. (Raworth, 2017, p. 220). Sustainability as meeting the needs of the present without compromising the needs of future generations to meet their own needs, merely means achieving a neutral point of not doing any more damage to our ecosystem. Regenerative design goes further, restoring, renewing and revitalizing energy sources and materials. Regenerative design integrates the needs of society with those of nature (Orcajada, 2021).

To these novel configurations, generativity is added as the human capacity to problem-solve in a myriad of different ways adapted to a plethora of different contexts. Eglash (2016) refers to generativity as “the bottom-up circulation of unalienated value”. Zittrain defines generativity as unintended applications which spontaneously occur when “driven by large, varied, and uncoordinated audiences” (2006, p. 1980). Troxler, (2010) defines it as “fab-lab magic”: the satisfaction of going from an idea to a tangible reality and of showing others how to do it. In layman’s terms, this means making sure the “apple seed” of an innovation – design plans, bill of materials and assembly instructions – remains open, so as to generate countless new apple trees. Generativity is the basis of the Academany programs, developed by Neil Gershenfeld and Sherry Lassiter, sets the grounds for worldwide educational collaborations offering distributed education on demand, combining local manufacturing and global networking.

Table 1 provides a literature review on the Commons theory covering the history of the Commons (Ostrom 1990), the integration of Commons to growth (Hess & Ostrom, 2011; Benkler, 2017; Litman, 2014); the importance of open governance (Fuster Morell and Espelt, 2018; Troxler, 2019); and the novel configurations of value creation and capture offered through Digital Commons (Raworth, 2017).

Yet, to date and to our knowledge, how Digital Knowledge Commons can be monetized, what growth patterns could be aligned with distributed, regenerative and generative value, has not been treated in literature. Thus, it is interesting to look at business models for open source hardware as this concept has become the means of representing how value is created and captured.

Table 1.
Literature review of the commons theory

Key Terms in this Chapter

Osh: Open Source Hardware is a collaborative product development process in which building plan designs, assembly instructions and bills of material are made publicly available for anyone to study, replicate, modify, distribute and sell, including hardware created, based on those designs.

FLOSH: Free and libre open source hardware.

Business Models: The architecture of activities through which a firm creates, captures and delivers value.

Digital Commons: Digital Commons are non-depletable and non-rivalrous. The more they are used and shared, the more efficient, cheaper, and transparent they become. They serve as the raw material for ideas, and need to be kept open to allow knowledge to circulate.

Commons: A shareable resource of nature or society that people choose to use or govern through self-organizing that is vulnerable to social dilemmas.

FOSS: Free open source software.

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