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Open source worth some €450 bn./p.a. in EU

The contribution of open source to the economies of EU Member States is estimated to be worth some € 450 bn. annually according to a report of the first Open Forum Academy conference, which took place in Brussels on 24 September. This figure is made up of some €374 bn. in savings from the re-use of code, plus other savings of some €114 bn.

This quotes a paper presented by Carlo Daffara of Bristol-based CloudWeavers. In order to assess open source’s contribution to the economy of the EU Member States, Daffara combines code re-use data with macro-economic estimates, reckoning that some 35% of the software used in the past 5 years is directly or indirectly derived from open source. To translate this into savings, Daffara draws on estimates for the total value of the IT sector, which are estimated to be between €374 bn. and €399 bn.

Below is the conclusion of Daffara’s paper.

The data collected up to now indicates that Open Source does have at least an immediate economic effect through code reuse and effort reduction; a lower bound of such effects can be estimated to be at least 114B€/year, through direct savings, reduction in project failure and improvements in code maintenance costs – equivalent to 30% of the entire software and services market. Also, the effect of reinvestment of such savings into internal IT provides an additional second order effect in terms of productivity and increased efficiency of at least 342B€/year – a decidedly not marginal contribution to the European Economy.

Download Daffara’s paper and the other conference proceedings (PDF).