The economic benefits of Open Source software

Continuing to make my way through the Open Rights Group’s important report on Digital Sovereignty. Their (and my!) preferred solution involves moving systems over to open source technologies, or, if suitable candidates don’t exist, then creating new technologies that are open source from the start.

The key advantages that following this path would provide I think exist in domains far beyond the financial. It would be urgently worth doing even if it cost significant money. But it’s nice to see some figures collected which suggest that such a move could in fact support local economic growth. That was, after all, the one true key sole priority of our current government not so long ago, for better or worse.

From p19 of the report:

• Greater investment in Open Source can also drive UK economic growth, supporting domestic innovation and a more competitive technology sector.

• Despite underpinning much of the global digital economy, Open Source remains underrecognised in UK government strategy.

• National economies would be 2–3% smaller without Open Source software.

• Open Source is present in over 95% of proprietary software systems, making up around 70% of their codebase on average.

• EU research suggests every £1 invested in Open Source returns around £4 in economic value.

• The Linux Foundation estimates 2–5x return on investment for organisations contributing to Open Source, rising to around 6x for leading contributors.

• France’s government preference for Open Source procurement helped generate 9–18% annual growth in IT startups, while also creating globally valuable Open Source assets.

• In the UK, OpenUK estimates Open Source contributes around £13 billion annually, representing 27% of the technology sector.

• A 2024 Harvard study estimates the global demand-side value of Open Source at $8.8 trillion, noting firms would need to spend 3.5x more on software without it.

• European Commission research suggests a 10% increase in Open Source contributions could add 0.4–0.6% to annual European economic growth