Author(s)

Joshua M. Pearce^1,2*

¹Department of Materials Science & Engineering, Michigan Technological University, Houghton, MI, USA.
²Department of Electrical & Computer Engineering, Michigan Technological University, Houghton, MI, USA.

With the maturation of digital manufacturing technologies like 3-D printing, a new paradigm is emerging of distributed manufacturing in both scientific equipment and consumer goods. Hardware released under free licenses is known as free and open source hardware (FOSH). The availability of these FOSH designs has a large value to those with access to digital manufacturing methods and particularly for scientists with needs for highly-customized low-volume production products. It is challenging to use traditional funding models to support the necessary investment of resources in FOSH development because of the difficulty in quantifying the value of the result. In order to overcome that challenge and harvest the current opportunity in both low-cost scientific equipment and consumer products, this article evaluates the following methods to quantify the value of FOSH design including: 1) downloaded substitution valuation; 2) avoided reproduction valuation and 3) market savings valuation along with additional benefits related to market expansion, scientific innovation acceleration, educational enhancement and medical care improvement. The strengths and weaknesses of these methods are analyzed and the results show that the methods are relatively straight-forward to institute, based on reliable freely-available data, and that they minimize assumptions. A case study of a syringe pump with numerous scientific and medical applications is presented. The results found millions of dollars of economic value from a relatively simple scientific device being released under open-licenses representing orders of magnitude increase in value from conventional proprietary development. The inescapable conclusion of this study is that FOSH development should be funded by organizations interested in maximizing return on public investments particularly in technologies associated with science, medicine and education.

Open Hardware, Free and Open Source Software, Positive Externalities, Value, Valuation

Pearce, J. (2015) Quantifying the Value of Open Source Hard-ware Development. Modern Economy, 6, 1-11. doi: 10.4236/me.2015.61001.