🗒 Notes from Webinar: Why Open Matters for Achieving the SDGs

Webinar Notes: Why Open Software Matters for Achieving the Sustainable Development Goals

Key Takeaways

  1. DPGs are in many ways thriving and there is a proliferation of strong products, but they often receive project-based or organization-based funding and fail to thrive when scaled to the level of widespread adoption in the digital ecosystem (on the level of something like OpenMRS or DHIS2)

  2. According to the World Bank, only 13% of public sector projects success, with more than half failing because of financial reasons

  3. While many digital public goods thrive in the innovation phase, they fail to sustainably grow and mature, creating difficulties in their ability to promote social impact across the globe

  4. Moving forward, it is important to identify who has a core responsibility for maintaining and deploying digital public goods, as well as create innovative partnerships and business models to help support them

  5. Community open source enables multiple vendors to come in and build on top of the software, but the question is how you can ensure that this value capture feeds back into sustaining the core of the product

  6. Digital public goods need a legal fiscal home, primary maintainer, dedicated product team, access to core funding, and connection to a community of practice

  7. Many different models are being explored for how a wide range of digital public goods can achieve financial sustainability on their journey towards widespread application in countries across the world on behalf of the SDGs

  8. The global community needs to not only work together to steward goods, but to find locations (such as a central foundation) where they can have legal fiscal sponsorship and attract necessary funding to diverse their revenue streams and opportunities for financial sustainability

Introduction (Kate Wilson)

  • Open source software is here and it matters if we are to achieve the SDGs in the coming decade

  • What are the financing channels that need to change and adapt for this to be achieved at scale?

Digital Impact Alliance (@harensen)

  • DPGs are essential in unlocking potential of digital technologies

  • Important to achieving the SDGs, while avoiding vendor lock-in and getting returns to scale

  • Grateful of ways and criteria for understanding how many digital public goods there are, but right now there are around 30+ projects that are being supported, with 130 more in the pipeline or ecosystem

  • Over 400 projects are being used to actively support governments and communities across the globe, though very few of these are succeeding, not just in terms of social impact but in terms of their business model and sustainability

  • Ecosystem includes: Mojaloop, DHIS2, ODK, RapidPro, OpenHIE, OpenMIS, OpenCRVS, Primero, Mosip, Moja Global, Open CRVS, OpenMRS, OpenSRP, Medic Mobile, etc

  • Investment portfolio for these goods varies depending on how you define it as well

  • According to the WB, only 13% of public sector projects success, with more than half failing because of financial reasons

  • Challenges for DPGs include, for example, underfunding and fragmentation

  • When something belongs to nobody, who is responsible for supporting

    • Decentralized nature both a strength and weakness, requiring better community governance
  • How can we coordinate existing efforts?

    • Maintainers: Primarily responsible for the open source project
    • Contributors: Contribute time and resources
    • Sustainers: Provide financial support to open source project
    • Consumers: Use and commercialized the open source project
  • Life cycle support for DPGs allows for ideas and innovation, but where we fail to reach scale is in growth and maturity

  • The open source community needs to work to effectively help projects scale and move into growth and maturity, which will result in solutions having to be redefined at least once

  • While most of open source technology is made with a social objective in mind

  • Even the success of OpenLMIS masks challenges on the long path to financial sustainability for open source projects

  • Rockefeller, USAID, and Gates help provide funds and a legal entity to help facilitate growth

  • Most DPGs are started in academic organizations, NGOs, and civil society, allowing them to grow and develop while attracting donor funding and enabling value capture

  • The Valley of Death often happens as a sustainability plan is developed, as seed funding runs out and the good is attempting to find longer-term sources of revenue

  • User-generated revenue and other alternative funding sources need to be generated to help sustain DPGs as they move past the valley of death

  • Digital public goods need a legal fiscal home, primary maintainer, dedicated product team, access to core funding, and connection to a community of practice

  • Open source tools for international development are part of a vision for how we can achieve the SDGs in the coming decade

Discussion: Why should we care about supporting Digital Public Goods and what are the main challenges they face at scale?

  • @brandon: OpenLMIS is not unique in the challenges they face at scale

  • Software for supply chains s challenging because it is difficult to enable cooperation across competing objectives

  • Ultimately, different NGOs received project-based funding, and without any core product maintainer or roadmap, it becomes easy for the project to be fragmented across different visions and with different communities of practice

  • VillageReach is one organization working to make sure the benefits in one project or country are being shared and mutually understood by other groups, in other contexts, and with a common path forward

  • OpenLMIS helped to solve the multiple organizations problem by facilitating multi-stakeholder participation, but that did not facilitate immediate business model sustainability

  • The lack of sustainability for these projects creates challenges in terms of how they deploy and scale up, which will be critical if they are to be used as part of a long-term vision for achieving the SDGs

  • Switching the model so that there is enterprise support and membership models to help participate and support the community that is maintaining

  • Private sector partnerships can also be used to create an open source core, with a commercial core maintained by the community maintainers (many different models which need to be iterated upon)

  • Moving from a donor, one-country funding model to shifting to the business models, revenue sources, and customer base for sustaining the community at scale

Discussion: Are there too many digital public goods? What is the promise of them?

  • @harensen: The promise of open source is that is being developed and supported by a community of practice

  • In terms of open source, you can pick up the product and iterate and add value to it for free

  • The nature of ownership for core products and their business models helps to make sure they are sustainable and necessary in the long-term

  • Community open source enables multiple vendors to come in and build on top of the software, but how can you ensure that this value capture feeds back into sustaining the core of the product --> How do you ensure value is coming back from a commonly shared value additive asset?

Discussion: Promoting the adoption and use of open source products in a national context

  • Skye Gilbert: Bringing knowledge to the fore on behalf of how these products are developed, implemented, and supported

  • Ex: In Tanzania, a knowledge and learning process informed how products were selected and enabled health leaders to make critical, informed choices

  • In terms of procurement, it is the case that the cost structures for procurement of medical devices and drugs are different than digital procurement, and running the latter through the former will create challenges in healthcare delivery

  • Kate Wilson: Ensuring the transparency of the open source business models and the community structures that support them in a national context

Discussion: Have we moved past product suitability to looking at the sustaining ecosystem?

  • @brandon: There are clear products, such as OpenMRS, which are widely used and fill a need the market was needing, and DPGs have rushed in to support this area

  • The products are viable and strong, but procurement and governance are unanswered questions, and ecosystem players are still trying to figure out the business models, cost-sharing measures, and community participation approaches needed to support them at scale

  • The potential for reusability as a metric for social impact

Discussion: Is there a form of taxation which could help support open source, digital public goods?

  • Skye Gilbert: GAVI model is illustrative --> Not a tax to the product, but money is taxed from the government in shifting money to fund GAVI

  • They also had to shift money into GAVI to support key areas in health, a form of taxation

  • The question of the most sustainable and equitable solution allows for many different models in how these goods could be “taxed”

  • @harensen: Importance goes to the international and national distinction, and while governments can share costs, the international donor community should be shifted to figure out how the social good this product is promoting can be subsidized

Discussion: What are challenges institutions are having from the innovation phase to growth and maturity?

  • There is now a bias towards using open source software, but that isn’t always clear in the procurement processes for governments in low- and middle-income countries

  • A lot more unpacking to do around that topic in the digital ecosystem, but unclear if it is in education, business model maturity, some copy of the two

  • Is it about supporting one product or bringing together many products?

  • @harensen: Important to identify has core responsibility and who can enter into a contract and guide the product

  • Without a sustaining legal entity and/or support organization, there really won’t be a mechanism to support DPGs at the scale they need to be used by governments as a way of supporting digital governance and infrastructure (while achieving economies of scale and working towards the SDGs)

  • Skye Gilbert: Meaning towards a place where you have alignment on procurement, but there is a lot of operational complexity in doing this

  • Supporting more than one product makes it difficult to coordinate across different projects and share the costs, creating large levels of overhead

  • We have set a vision for open source, but still need to get operating costs for sustaining them to come down at the same time

  • @brandon: For NGOs that are not able to be legal maintainers, the question yet again comes back to how these projects can be effectively supported to meet needs on a collective base

  • Setting up legal fiscal homes may support some goods, but having a home like a foundation that is supporting multiple goods could be a strong word on helping them on this path

  • Also costs to having many different legal homes for digital public goods, and sharing services while promoting testing and interoperability could be a core of that larger foundation or maintainer

  • @harensen: There are existing foundations for open source software, but the digital public goods is much larger

  • The financing model could be solved by a larger foundation which not only supports and houses the software, but provides training and support, enables interoperability, and helps to drive and sustain a community of practice around them

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Thank you for organizing this webinar, it was very informative. As a big fan of both open source software and the SDGs, I’m more than happy to see that we’re recognizing open source software as a digital public good and making strong connections between sustaining open source and achieving the SDGs.

Here is my humble opinion about the details on how to use taxation to sustain open source software and/or digital public goods.

First of all, since I believe there are no prior experiments like this, it would be safe to start with a limited scope and aim to grow in time (Agile methodology). Therefore, my preference would be to start only with open source software.

A quick summary of this approach would be:

  • Add 1% open source tax to value added tax or sales tax, to all proprietary software sales (operating systems, office tools, games, app store purchases etc.)
  • Via a public fund, distribute the collected taxes back to the open source ecosystem based on some metrics like usage & importance; similar to the systems that content creators get paid based on how much their content has been interacted (e.g. Spotify, Youtube).

The most obvious argument to justify this tax is almost all proprietary software already contains (mostly built upon) open source software components.

“Open source made up 70% of the audited codebases.”
Open Source Security and Risk Analysis Report from Synopsys

Here are some additional remarks.

Most optimum approach: Currently the expectation from open source software maintainers/entrepreneurs is to have a “business model” around their software. Although they already built a successful solution, they still need to find some other activities that can be monetized (in other words, we expect them to be successful twice).

Recognizing that open source software already made tremendous contributions to the economy and sustaining these initiatives through taxation would simplify the economy. It would create a direct link between the success of open source and the value that they generate in the economy.

Having a steady income based on their existing success would create a positive feedback loop for the creators; they could focus on what they do best, develop better software and keep making bigger & better contributions to the economy.

Keep the competition: To ensure that there’s a competition in the market, the collected taxes shouldn’t be distributed back to some specific companies/projects but to the whole ecosystem based on some agreed metrics.

Transparent: The system should be as transparent as possible; companies/individuals should be able to see how much taxes have been collected and how they’re going to be distributed. In the long term, this would incentivize other companies to open source their software, since it would be possible for them to calculate how much fund that they can get back from the collected taxes.

Minimum intervention: The governments should keep the intervention at a minimum level, use taxes only to prevent “Tragedy of the Commons” and aim for market correction/optimization.

Aim to grow: On the flip side, the correction/optimization that can be done in the market could potentially be much bigger. We should keep studying other areas and especially look for low hanging fruits.

Purely as a personal opinion; I find it unacceptable that we still struggle to solve “No Poverty” (SDG 1) and “Zero Hunger” (SDG 2), while we generate a massive amount of wealth in the economy. This outcome can only be explained that there’s a serious disconnection between how we spend our resources vs. what we actually think is important.

As long as we can justify the intervention and showcase the benefits, these market optimization systems should grow tax percentage wise (the size of the funding) and should be extended to cover other digital goods to achieve the SDGs.

The role of the UN: Once we study how such a system should potentially work, the UN should be the guiding body to show the benefits of taking this approach and hopefully convince the countries one by one to implement it.

When it comes to the distribution of the taxes; the UN may set up a global public fund for this purpose, the countries can join to this program and redirect their taxes, or alternatively, each country may set up their own public fund.


One of the biggest challenges of this approach is to develop a system that distributes the collected taxes back to a dynamic open source ecosystem.

Ideal scope of a “minimum viable product” of this system would be; to study the metrics, to research on software spending per country and to build a web application that shows how the system would work.

Metrics

Study and discover the metrics that’s going to determine how much funding an open source software could get out of the collected taxes. This can be done through a collaboration with existing initiatives in this space (e.g. CHAOSS, npms, npm rank).

Software spending per country

Especially if it’s easy to gather this data, a research on annual software spending of each country, so we can calculate how much money that could be generated once there is an open source tax.

Building the application

A web application that can showcase how the system works:

  • Shows how much tax that can be collected per country based on their software spending
  • Since metrics are not equal to each other, allows citizens (or open source experts?) to decide the weight of each metric in calculating the tax distribution
  • And finally shows which open source software should receive how much money based on these metrics (better the performance, more the funding)

As a software specialist, I already had attempts to develop an MVP in the past (*) and I intend to continue to work on these ideas in the future.

However, I’d be very eager to speed up the process if I could get some funding that would allow me to work on this area. My rough estimation would be that a solid MVP could be built in six months with a small team and 100K euro budget.

There are many more details that could be mentioned (e.g. international investments with national taxes, or how the system should grow in the future), but I hope this should be enough to paint a clearer picture of what I think is possible.

If you wish, I’d be happy if we could arrange a call to talk about possible solutions and/or how we can work together.

And of course, any other feedback is also more than welcome.

Thank you for taking the time!


(*) About my previous attempts:

Wealth Framework: An experimental project that aims to show how a publicly controlled fund could accelerate solving our global issues. Especially content wise, it’s in a half-baked state: https://wealth.forcrowd.org/

Global Goals Fund: This is a custom prototype that’s based on Wealth Framework. I developed and presented this project at the United Nations’ Connect2Effect hackathon in 2017: https://globalgoalsfund.forcrowd.org/

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Since as a new user I can only add two links per post:

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