[Discuss] Economic value of OSH work

Andrew Katz Andrew.Katz at moorcrofts.com
Tue Sep 2 14:59:00 UTC 2014

The Linux Foundation tried to figure out the value of a GNU/Linux distro quite a few years back:


It’s interesting in that it covers the methodology used (essentially, development cost). I’d also guess that the value has, conservatively, doubled since then (based on the additional dev work which has been done).



Andrew Katz
Moorcrofts LLP
Corporate Law | Technology Law | Commercial Law | Employment Law
Employee Incentivisation & Share Schemes | Intellectual Property Law
Commercial Property Law | Secured Lending
James House, Mere Park, Dedmere Road, Marlow, Bucks SL7 1FJ
+44 (0) 1628 470003 (phone) |  +44 (0) 7970 835001 (mobile)
mailto:andrew.katz at moorcrofts.com
Partners - Adrian Phillips, Andrew Katz, Teri Hunter, Craig Havard
Registered in England & Wales OC 311818
Regulated and authorized by the Solicitors Regulation Authority
"Partner" means a member of Moorcrofts LLP
We store email addresses and the names of addressees to assist with future correspondence.

From: discuss-bounces at lists.oshwa.org [mailto:discuss-bounces at lists.oshwa.org] On Behalf Of Emilio Velis
Sent: 02 September 2014 15:54
To: The Open Source Hardware Association Discussion List
Subject: Re: [Discuss] Economic value of OSH work

There are different ways of valuing open source work, and probably many aren't even in the realm of conventional economics. The best to measure the value of OSH work would be by comparing all the costs that R&D companies use and compare them to how much would it cost to build an open source equivalent. Costs are easy:
Total cost of design = total time spent by collaborators x hourly wage + paper and materials (prints, scans, other staples)
Cost of manufacturing = machine time + materials + shipping for materials + additives + cost of machine deprecation
You also need to evaluate in terms of:
- logistics (what you would spend in terms of price+shipping compare to making it yourself),
- average cost of maintenance (training, spare parts)
- deprecation (the expected time the machine will work. If a proprietary machine is expected to last 50 years with maintenance, compared to open source options that are 10 times cheaper but you have to build a new one every 5 years...)
- cost of intellectual property: having the source code of a machine also gives your company value since you have a base for R&D. However, this would have to be calculated differently because it's not a monopoly.
Maybe these ideas will give you a starting ground. Let me know if you need any help! This would be a very good subject for a research paper.

On 2 September 2014 07:13, Joshua Pearce <professor.pearce at gmail.com<mailto:professor.pearce at gmail.com>> wrote:

Hi All,

I know that many of you has been thinking about how to determine the value of OSH work. Are you aware of any methods to calculate absolute value in real economic terms?

For example if you spend an hour of your time making an OpenSCAD file for a parametric test tube rack and put it in the public domain - and then for the rest of time anyone can download the file, customize the rack for their needs and print it for the cost of materials and a tiny amount of electricity. How much is that gift worth?

Clearly it is more than your opportunity cost or wage for one hour...but how much more is the value to humanity?

Is it:
(cost to purchase - cost to print) x (number of people downloading it)?


(hourly wage of person needing a test tube rack) x (number of people using it)?


total value of the test tube market - (cost to print)x (number of racks in the market) ....summed for N years?


As the cost of test tube racks has now decreased it is the total value of the current market + a bonus for expanding future use because of lower costs + some kind of educational bonus because more schools can afford them + some fraction of future discoveries made possible because now part of the expense of doing science was decreased.....


Is there a better way to do this - and get to quantification?


Joshua M. Pearce, Ph.D.
Associate Professor
The Michigan Tech Open Sustainability Technology Lab<http://www.appropedia.org/Category:MOST>
Department of Materials Science & Engineering
Department of Electrical & Computer Engineering
Michigan Technological University
601 M&M Building
1400 Townsend Drive
Houghton, MI 49931-1295

Open Source Lab<http://store.elsevier.com/coArticle.jsp?pageid=18200010>

discuss mailing list
discuss at lists.oshwa.org<mailto:discuss at lists.oshwa.org>

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.oshwa.org/pipermail/discuss/attachments/20140902/1944b863/attachment-0001.html>

More information about the discuss mailing list