The Hidden $8.8 Trillion Economic Force: Harvard Research Reveals the True Value of Open Source Software

In a groundbreaking study that could reshape how we understand the digital economy, Harvard Business School researchers have uncovered that open source software (OSS) creates a staggering $8.8 trillion in economic value worldwide—despite costing just $4.15 billion to develop.

Open source software freely available code that powers everything from websites to mobile apps to enterprise systems has long been recognized as important, but its true economic impact has remained elusive. This new research provides the first comprehensive measurement of both the supply side (cost to create) and demand side (value generated through use) of widely-used OSS.

"Companies would need to spend 3.5 times more on software than they currently do if OSS didn't exist," the researchers concluded after analyzing unique global data capturing OSS usage across millions of firms.

The findings reveal what might be the most efficient economic multiplier in modern history: every $1 invested in creating open source software generates over $2,100 in economic value a 2,100× return on investment.

The research team, led by Manuel Hoffmann, Frank Nagle, and Yanuo Zhou, employed two complementary datasets to track both "inward-facing" code (used in creating products) and "outward-facing" code (used on company websites), allowing them to capture a comprehensive picture of how companies utilize open source software.

Perhaps most striking is the concentration of value creation: 96% of the $8.8 trillion in economic value comes from code written by just 5% of OSS developers. These elite contributors don't just work on a few high-profile projects they contribute to substantially more projects than developers at the lower end of the value distribution.

The study also found dramatic differences in value creation across programming languages. The top six languages (Go, JavaScript, TypeScript, Java, C, and Python) account for 84% of all OSS economic value.

Go—a language developed at Google for building scalable infrastructure generates the highest value on both the supply and demand sides, followed by JavaScript, which dominates web development.

Not surprisingly, the research revealed that technology-intensive industries derive the most value from OSS. "Professional, Scientific, and Technical Services" lead with approximately $43 billion in demand-side value, followed by "Retail Trade" and "Administrative Support Services" at $36 billion and $35 billion respectively. Traditional industries like mining, utilities, and agriculture showed lower but still significant value derived from open source software.

This research fundamentally changes how we should understand the digital economy. While open source software appears as "zero" in traditional economic measurements (because it's freely available), it actually represents one of the largest sources of value in the global economy.

"Our research lays the groundwork for future studies of not only OSS, but of all information technology and its growing impact on the global economy," conclude the researchers.

For policymakers, businesses, and open source communities, these findings highlight both the tremendous efficiency of collaborative software development and the critical importance of supporting the relatively small number of developers who create disproportionate economic value.

This research was conducted by Manuel Hoffmann (Harvard Business School), Frank Nagle (Harvard Business School), and Yanuo Zhou (University of Toronto). The full study is available at: https://www.hbs.edu/ris/Publication%20Files/24-038_51f8444f-502c-4139-8bf2-56eb4b65c58a.pdf