Context
How can a bunch of loosely affiliated volunteer computer hackers take on software industry giants and win? How can they create stable and effective software products without the scaffolding of a firm’s bureaucracy and highly paid programmers? The Free/Open Source software (F/OSS) movement is doing just that. The Apache web server software and the GNU/Linux operating system, all initially developed by volunteers, are prime examples of software products that are winning significant market share against established companies like Microsoft and Sun Microsystems.

In this article, David Lancashire attempts to build a theory, backed by data, to help explain the motivations and peculiar geographic concentration of F/OSS developers.

Main Hypothesis and Findings
On the face of it, F/OSS development seems to violate standard economic assumptions about individual motivation. Theories generated from within the F/OSS community (e.g., Eric Raymond’s The Cathedral and the Bazaar) have focused instead on the uniqueness of hacker culture. But Lancashire downplays these accounts as self-serving.

Lancashire studies two well-known, complex F/OSS projects, the Linux operating system kernel and the GNOME graphical-user interface (GUI). He obtains country of origin data on over 430 code contributors to these projects and then ranks the countries based on developers per capita and home internet penetration. In the aggregate, US based developers constitute the majority of developers on both projects. However, when ranked on a per capita basis, the US ranks 10th among 11 countries for the home internet measure and it ranks ninth on developers per capita. Surprisingly, countries like Hungary, Sweden and Denmark rank in the top three based on home internet measures and Sweden, Denmark and Australia are top three based on developers per capita.

Lancashire posits an economic model based on opportunity costs to explain these findings. His central claim is that the in the past ten years the locus of F/OSS development appears to have shifted over to Europe. This shift to Europe, from his perspective, is due to the opportunity costs faced by US based software developers—soaring demand and high wages for computer professionals decrease the attractiveness of unpaid activities. On the other hand, European developers not only face lower opportunity costs, but they also benefit by gaining a reputation from participating in open source projects. They can then gain access to higher wage jobs abroad. He sees open source participation as a kind of fixed cost of acquiring reputation.

Contributions, Limitations and Extensions
Lancashire provides a parsimonious explanation of F/OSS motivations. However, he may oversimplify a complex phenomenon. Some researchers identify other economic considerations, including meeting specific user needs and distributing effort requirements . Sociological studies show that F/OSS participants, rather than having a single motivation like reputation, claim heterogeneous motivations , including learning, having fun, ideology and user need. Lancashire’s fixed cost hypothesis, while plausible, would benefit from additional empirical testing and incorporation in a broader theory that includes multiple motivations for participation.

See also the discussion at Slashdot.