How to Make Millions of Dollars of Value with Open Source Hardware

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A new study by the MOST lab shows that the release of hardware designs under open licenses creates enormous economic value as digital manufacturing technologies allow businesses and individuals to fabricate products for the cost of materials. This open source hardware paradigm is now scalable and challenges the view of conventional world economic news.

Making Lots of Value With Open Source Hardware

Making Lots of Value With Open Source Hardware

It is now clear millions of dollars of value can be created by designers if they share their work under open licenses.

With the rise of distributed manufacturing with 3-D printing, hardware designs released under free and open licenses is growing exponentially. These designs – everything from Android phone accessories to prosthetic arms – can have an enormous value for those that want them. The number of open designs is growing exponentially as thousands of people download free files by the millions – but it is difficult to quantify the value of the result. Industry knows open source software has a enormous value, but how valuable is an open source hardware design?

To answer that question, Dr. Joshua Pearce, an associate professor and director of the MTU Open Sustainability Technology (MOST) Lab analyzed three methods to quantify the value of open source hardware design in the latest issue of the journal Modern Economy.

“The first method is the easiest. As 3-D printing products costs less than purchasing them, the value of a design is the savings users generate by substituting open hardware scaled by the number of downloads. Most free design repositories (e.g. Youmagine and Thingiverse) track the number of downloads”, says Pearce. “The second method is more applicable to companies and represents the costs that they would incur if they hired engineers to create an equivalent design”, he continues.

The third method is only valid when distributed manufacturing is more widespread and entire product markets are impacted. Pearce showed that the three methods represented minimum estimates as there are additional benefits related to market expansion because of lower costs, scientific innovation acceleration, educational enhancement and medical care improvement.

He then looked at case study of a syringe pump with numerous scientific and medical applications that his group had developed and shared last year. The open source pump design saves users hundreds to thousands of dollars depending on the commercial pump it replaces. Pearce adds, “As it was an open design, hundreds of people are already using it – and several have even improved on the design and shared their improvements. This is a clear example of the power of the free and open source paradigm to drive innovation.”

The results of the case study analysis found millions of dollars of economic value already created. “The results are somewhat shocking – it is now clear millions of dollars of value can be created by designers if they share their work under open licenses. This scalability in value is much more difficult to achieve with traditional closed development methods.” said Pearce, who concludes, “For individuals or funding organizations interested in doing the most good and maximizing value for the public it is clear that supporting open designs of hardware should be a top priority.”

Full article: Pearce, J.M. (2015) Quantifying the Value of Open Source Hardware Development. Modern Economy, 6, 1-11. Open access link, Syringe pump design files

Joshua Pearce is the author of the Open-Source Lab: How to Build Your Own Hardware and Reduce Research Costs, Elsevier, 2014

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