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Study finds open source key to European ICT competitiveness

A new study on the economic impact of Free/Libre Open Source Software (FLOSS) on the European information and communication technologies (ICT) sector has found that it could increase Europe's competitiveness.

'Given Europe's historically lower ability to create new software b...
Study finds open source key to European ICT competitiveness
A new study on the economic impact of Free/Libre Open Source Software (FLOSS) on the European information and communication technologies (ICT) sector has found that it could increase Europe's competitiveness.

'Given Europe's historically lower ability to create new software businesses compared to the US, due to restricted venture capital and risk tolerance, the high share of European FLOSS developers provides a unique opportunity to create new software businesses and reach towards the Lisbon goals of making Europe the most competitive knowledge economy by 2010,' states the report, which was requested by the European Commission's Enterprise DG.

The report also says that increasing the use of FLOSS could provide a way for Europe to compensate for low ICT investment as a share of gross domestic product.

'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 -- over €10 billion annually,' it states.

The paper suggests that Europe is in a good position to increase its €22 billion investment in FLOSS (compared to 36 billion in the US), considering that 63% of all FLOSS developers are resident in the European Union, while only 20% are in the US and Canada.

In addition, although the US has the edge in terms of large FLOSS-related businesses, according to the report, the greater number of individual contributors from Europe has led to an increasing number of globally successful FLOSS small and medium sized enterprises (SMEs).

'FLOSS provides opportunities in Europe for new businesses, a greater role in the wider information society and a business model that suits European SMEs,' reads the report. 'By providing a skills development environment valued by employers and retaining a greater share of value addition locally, FLOSS can encourage the creation of SMEs and jobs.'

The report was commissioned by DG enterprise of the European Commission and carried out by UNU-MERIT, a joint research and training centre of the United Nations University and Maastricht University.

The European Commission has taken many steps towards encouraging the development of FLOSS in the EU. In October 2006, it granted €3 million to the SQO-OSS22 project for testing the quality of FLOSS, and also extended its open source web portal, the Open Source observatory, to develop interoperability between applications.

Source: European Commission
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