Openness a driver or an inhibitor for innovation Brussels, OpenForum Europe Meeting, Sep' 27, 2006

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Openness!A driver or an inhibitor for
innovation? Theory and practice from Europe and
the world

• Christian Wernberg-Tougaard
• Director Continental Europe, Marketing
  Communication, Global Public Sector
• christian.wernberg-tougaard_at_unisys.com
• http//blog.wernberg.org

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Short bio

• Expirience
• Specialist in Governments of the
  Nordic/Continental Europe with great insight in
  the challenges and solutions offered in this the
  most digitized areas in the World.
• Vice chair of the European IT-security agency,
  ENISA, working group on Awareness Raising
• Steering committee member Netsafe Now (Denmark)
• Planing member of The Danish Board of Technology
  IT-security expert group and expert group on
  RFID.Member of the RIFD STOA WG group under the
  Rathenau Institute.
• Recently I have been appointed member of the
  IT-security panel, which guides the Danish
  Minister of Technology on IT-security issues.
• Key Note Speaker at IDCs eGovernment conference
  in Rome 2004
• Present member of the OSS Committee at the Danish
  IT-industry organisation. Former member of Danish
  Open Source Venders Organisation (www.osl.dk) and
  has been expert member in the Danish evaluation
  of Software at the Desktop which examined
  guidelines for use of Open Source vs. traditional
  software.
• Will appear with a chapter in a book on Open
  Souce with the title Methodological
  considerations in strategizing the use of open
  source in the Public Sector December 18, 2006.

• Family and education
• 2 kids and a wife (legal advisor Ministry of
  Immegration)
• Master of Economics from the University of
  Aarhus.
• Ministry of Education (1996 1998) Head of
  Section
• Ministry of Science (1998 2000) Head of
  Section.
• Computer Science Corporation CSC (2000-2004)
  Account Manager/Innovation Manager.
• Unisys (2004 - 2005) Director, Nordic, Business
  Development
• Unisys (2005 - ) Director, Continental Europe,
  Global Public Sector, Marketing Communication
• Has the responsibility for innovating the way the
  Public Sector Practices act towards Public Sector
  clients and has the responsibility for helping
  clients to think innovative and evaluate new
  technology as well as being the prime
  spokesperson in the Nordics.
• LinkedIn profile http//www.linkedin.com/pub/0/1
  19/873
• My blog http//blog.wernberg.org

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Agenda (15-20 minutes)

• Openness ...
• Examples of pros
• Examples of cons
• Examples of both
• Conclusion

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Openness and Innovation
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The basics around Openness!

• The more, the merrier
• From standard macro-economic perspective a closed
  market will be inefficient compared to a open
  economy.
• This is in a constraint-free world true for Open
  Standards.
• No one can deny that Open Standards is preferable
  to closed standards.
• Closed standards hinderer interoperability
• Closed standards hinderer flexibility
• Closed standards hinderer innovation
• Openness when it is open how
• it is concieved?
• it is adapted?
• it is made available and maintained?
• Many favors Open Standards as the only right way
• I endorse Open Standards as a tool to achieve
  sound, efficient and flexible solutions (see
  http//cyber.law.harvard.edu/epolicy/ )
• But there can be problems around Openness
  problems that we need to address to secure we are
  not exterminating innovation.

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Openness Innovation (I)

• Linux, JBOSS, TYPO3 and other
• Development of collaborative, internetbased
  communities has proved an engine of innovation.
• The OSS development team members are according
  to a sociological survey of TYPO3 gathered
  around a computer science challenge and the
  wish for freedom. When asked they are not
  anti-proprietarists as they want freedom not
  to force others to use it.
• The management of an OSS project is often loosely
  coupled but often there is a guru which is
  endorsed by skills, knowledge and innovation
  power.
• Only a fraction of all projects on SourceForge
  becomes a success.
• But even though there is an increasing amount of
  service innovation around of Open Source software
  as the business models are maturing and the
  penetration of OSS increases.

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Openness Innovation (II)

• The Gold digger
• In late 1990s the Goldcorp. mine was approaching
  bankruptcy. Something drastic had to happen.
  Owner McEwen realized that openness would be the
  solution inspired by the Linux development and
  innovation.
• His reasoning If he could attract the attention
  of world-class talent to the problem of finding
  more gold in Red Lake, just as Linux managed to
  attract world-class programmers to the cause of
  better software, he could tap into thousands of
  minds that he wouldn't normally have access to.
  He could also speed up exploration and improve
  his odds of discovery.(from http//www.fastcompan
  y.com/online/59/mcewen.html )
• By sharing previously secret information among
  scientists they kick-started new ways of
  analyzing geologic data (the winners of the
  competition was an Australian firm that only by
  data mining, could deduce the best dig sites) and
  applying the collaborative output maps of most
  possible dig sites arose.

Goldcorp Inc. (TSXG)(NYSEGG) is pleased to
announce its 2005 annual and fourth quarter
results, highlights of which are - Record net
earnings of 286 million (0.91 per share) for
2005, an increase of 460 compared with 51
million (0.27 per share) in 2004. - Record
fourth quarter net earnings of 102 million
(0.30 per share), compared to 2004 earnings of
15 million (0.08 per share). - 2005 gold
production increased to 1,136,300 ounces (2004 -
628,000 ounces) and gold sales more than tripled
to 1,344,600 ounces at a total cash cost of 22
per ounce (2004- 427,600 ounces at 115 per
ounce).
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Openness ? Innovation (I)

• The story of MSM
• Methylsulfonylmethane (MSM), also known as methyl
  sulfone or dimethylsulfone (DMSO2), is an
  odorless breakdown product of dimethyl sulfoxide
  (DMSO).
• MSM is very easy to produce, it is as such a free
  good. MSM has shown to be very efficient as a
  support agent for physiological response to
  stress, e.g., gastrointestinal distress,
  inflammation of the mucous membranes and allergic
  reactions.
• But as this is a free (open) knowledge no
  medical company will invest in proliferating the
  use of MSM as there is no way they can make an
  descent ROI.
• The big question Is this example of openess
  leading to dis-innovation usable in an IT-world??

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Openness ? Innovation (II)

• Near-commercialization of Open Source
• In some areas Open Source has become closer to
  closed source than Open Source. Linux
  distributions like RedHat is in this area.
• To protect image, owning the hill
  near-commecialized OSS packages can deny the
  risk of including new tools, new directions so
  because they have an obligation to openness
  they might outrule innovation because this can
  harm trust or stability.
• I have together with colleagues and Dr. John
  Gøtze (Harvard eOpen Policy) surveyed the move
  towards commercialization of OSS. Please see
  attached slides for more info on the book and the
  model.

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Openness ? / Innovation ?

• Government Open Source / Open Standard use
• Denmark has decided that all PSI interaction must
  be based on Open Standards and so has Peru,
• The challenge is that some politicians has talked
  about white-lists but what about innovation
  then?
• DS484 (BS17799) is open but costs money to use
  (maintenance).
• What about PDF or GMS/3G standards?
• The FESD standard of JDMS in Denmark
• 3 companies develops the JDMS standard together
  with the government the results are open
  standard but the process is closed and hence
  might be making a monopoly competition
  situation because the minimum innovation
  inclusion in the standard maximizes the profit at
  the participating companies.
• The focus of standards should be on
  interoperability.

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Conclusion

• Open Source and Open Standards are carriers of
  innovation. Why there shouldnt be any doubt
  about moving in this direction naturally based
  on a evaluation of fit.
• But there are challenges
• What about IPR getting a good idea should be
  protected against theft?
• Governments develops closed standards masked as
  open as there is a democratic process but the
  result is closedness.
• Openness can be limiting innovation because
  there is not a competitive marked the service
  marked might step in an save the equation.
• Commoditization of OSS can also decrease the
  willingness to include innovation in the source
  as this is seen as a threat to the integrity of
  the source.

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APPENDIX AHow should PSIs choose between
trad. software and OSS?How to evaluate
software?
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Evaluating Open Source in Government

• The following are based on an evaluation and
  benchmark approach that has been developed by
• Christian Wernberg-Tougaard, Unisys
• Kristoffer Herning, Unisys
• Patrice-Emanuel Schmitz, Unisys
• Dr. John Gøtze, Ass. Professor IT-university of
  Denmark
• The chapter is part of a book Knowledge
  management and Open Source to be published by
  Idea-Group publishing late 2006.
• Subtitle of the book chapter Methodological
  considerations in strategizing the use of open
  source in the Public Sector
• Available from December 18, 2006.

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Strategic dynamics in OSS
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Short about the holistic model

• Incorporates SOA architectural methodology as the
  underlining fundament.
• Especially the Zachmann-framework and the Unisys
  3DVE are used.
• Normally OSS (or proprietary software) is thought
  only to impact applications- and infrastructure
  environment.
• In our methodology we try to be holistic to
  capture the impact on all layers of an
  organisation of the choice of software.

Special focus on the criterias that a PSI could
use to evaluate what strategy to persue.
The Impact of Open Source on Public Sector
Business Processes will more closely examine
what business processes are affected by the new
paradigme
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The book chapter is focusing on a subset of
possible evaluation criterias.

• Flexibility and interoperability
• Security
• Independence and Anti Monopoly
• Legal issues
• Costs and benefits
• Support and development in the F/OSS Ecosystem
• Internal or external resource building