Zen and the Art of Nonprofit Technology

An interesting study was released yesterday by an organization called the Computer and Communications Industry Association (with heavyweight members like Google and Microsoft) which shows that fair use exceptions to copyright generate more economic benefit than copyrights themselves. Here’s a tidbit of a Infoworld report about the study:

By one measure — “value added,” which the report defines as “an industry’s gross output minus its purchased intermediate inputs” — the fair use economy is greater than the copyright economy.

Recent studies indicate that the value added to the U.S. economy by copyright industries amounts to $1.3 trillion, said Black. The value added to the U.S. economy by the fair use amounts to $2.2 trillion.

The fair use economy’s “value added” is thus almost 70% larger than that of the copyright industries.

The $4.5 trillion in annual revenue attributable to fair use represents a 31% increase since 2002, according to the report, which claims that fair use industries are responsible for 18% of U.S. economic growth and almost 11 million American jobs.

So, if fair use adds more economic benefit than copyrights - what would open source do? Well, we have some data from Europe:

FLOSS potentially saves industry over 36% in software R&D investment that can result in increased profits or be more usefully spent in further innovation.

ASAY: Importantly, these savings apply to everyone, not merely open source companies/developers. Open source isn’t biased in distributing its benefits.

…• Increased FLOSS use may provide a way for Europe to compensate for a low GDP share of ICT investment relative to the US. A growth and innovation simulation model shows that increasing the FLOSS share of software investment from 20% to 40% would lead to a 0.1% increase in annual EU GDP growth excluding benefits within the ICT industry itself – i.e. over Euro 10 billion annually.

The evidence seems to be growing. At least on a large scale, open is economically better than closed.

Update: Nick Carr thinks the fair use study is “a crock.” He has some good points.