Quick -- name an open source product that's innovative. If you said "Linux," you failed the test. Linux -- the darling of counter-culture programmers, for its "free software" advocacy and for providing an alternative to Microsoft Windows -- is not an innovation. It's essentially a copy of another operating system, called Unix, that has been around since the 1970s. Making a copy of existing product? No one that I know would call that "innovation."
And Linux isn't unique -- the open source model almost never generates breakthrough innovation. When Krzysztof Klincewicz, a management professor at the Tokyo Institute of Technology, analyzed the 500 top open source projects on SourceForge.net, he found that only 5 of the 500 -- one percent -- were examples of radical innovation.
Open source advocates get defensive when I point this out. Isn't Linux the most reliable operating system? Isn't it the only hope for those who can't stand Microsoft? Doesn't it represent the wave of the future, software development by crowdsourcing? I'm not saying that Linux is bad; just that it's not an innovation. I use open source products all the time -- the Wikipedia encyclopedia and the Firefox browser, for example. But encyclopedias have been around since Diderot, and Firefox is not radically different from any other browser.
The open source model is certainly capable of incremental innovation. Linux has many features that weren't in Unix 20 years ago, and it's improved on many of the features that were originally in Unix. Firefox has some nifty features that aren't in Internet Explorer. But for-profit businesses are also pretty good at incremental innovation. The reason why businesses are intrigued by the open source model is that they're looking for a new way to generate breakthrough innovations -- and open source is the wrong place to look.
In spite of these problems, I'm excited by open source because it points us in a new direction for tapping into the power of collaboration. The old model of innovation was strong central management, hierarchical reporting lines, and a linear staged process from the R&D lab through to the production floor. The open source model turns this on its head; no central control, and a distributed and diffused network of experts. The key to breakthrough innovation is to find the right balance between these two opposed models. MIT professor Eric von Hippel shows us one potential solution: the concept of "open innovation." When companies open up their innovation processes to key business partners and customers, they become more innovative. Proctor & Gamble has had incredible success with their "Connect and Develop" strategy; almost half of their new products originated in ideas that were first formed outside the company, rather than in its internal research labs.
Nicholas Carr, writing in the summer issue of Strategy and Business, outlines a second potential solution. He also argues that the pure open source model -- crowdsourcing, collective intelligence, products emerging improvisationally from the bottom up -- isn't very innovative. He points out that Linux is driven by a core group, led by Linus Torvalds, that exerts central control and guidance over the far-flung community of developers, synthesizing all of their work into a coherent product. His proposal is that open source communities are more successful and more innovative when they have a strong core team driving the effort.
Business leaders are rightly fascinated by the open source model. It's very close to the kind of group genius that generates radical innovation. But we're still working to come up with a tweak on the pure model, one that can tap into the power of social networks to generate breakthrough innovation.