Open Source and the IT Trade Deficit

Brendan Scott of Open Source Law has written a very interesting paper on Open Source and the IT Trade Deficit in Australia.

GrokLaw has a HTML version of the report but I thought I’d reproduce Brendans Summary and a paragraph to further illustrate what I’ve been banging on about on the dangers of IP laws with regard to IT..

Over to Brendan..

1. Summary

1.1 Key points:

(a) Failure to adopt an open source operating system costs Australia on the order of
$430 million per year, even assuming licence costs substantially below RRP and
after allowances for contributions to the local economy.

(b) If the cost of other applications were included this figure would be substantially

(c) Open source can convert Australia’s current software rental trap into a capital
investment, boosting jobs and the information economy.

(d) Open source has the ability to make considerable favourable adjustments to the
balance of trade and to do so in the short term.

(e) Significant reductions in expenditure on software imports can be viably achieved by
open source substitution — i.e., without foregoing the use of functionality as business

(f) Open source is also relevant to preserving market access for equipment
manufacturers through software embedded in equipment.

2. About Australia’s IT Trade Deficit

2.1 Each year the ACS funds the production of a review of Australia’s IT trade deficit. The
most recent, released in October 2003 (Australian ICT Trade Update 2003, indicates that Australia ran a $14 billion deficit in
IT trade in the most recent year (2003) and that, under the incumbent, closed source,
licensing model for software, this deficit has grown at an average rate of 7.4% per annum.

2.2 There is a an even closer correlation between the recent, dramatic, decline in Australian IT
performance in the five years following the announcement, in April 1998, by the
Government that it would extend the scope of copyright monopolies (through what was later
to be called the Digital Agenda Act) to be brought into line with US practice.