This Nobel Prize winner thinks open source software is Canada’s ticket to growth

'There's a huge opportunity to be the home for open innovation'

Paul Romer, co-winner of the 2018 Nobel Prize for Economics, speaks at a news conference at the Stern School of Business of New York University, in New York on Oct. 8, 2018. Richard Drew/AP Photo.

In the last decade, Microsoft Windows has seen its market share more than cut in half, plummeting from nearly 100 percent to below 40 percent.

The competitor that did the damage was Google, a rival behemoth that now dominates the tech world with its Android operating system that runs on phones, tablets, and even stripped-down laptops.

But it wasn’t all Google. Android is open source software, which means anyone can download the code and play around with it. Other manufacturers can take the Android engine and use it to power a device, meaning they don’t have to build their own operating system or license one.

Windows is a closed, proprietary system and has always drawn the ire of the open source community. Android grew out of the Linux operating system, a long-time favourite of coders and assorted nerds who enjoy its versatility and reputation as an anti-Windows upstart.

Android’s rise is an example of how knowledge and ideas are vital to economic growth, the insight that won Paul Romer a Nobel Prize. It’s a phenomenon that British author Matt Ridley described as “ideas having sex with each other.”

Romer, who is also the former chief economist of the World Bank, made the case at a summit hosted by The Coalition for a Better Future in Ottawa last week that open source software and the creative energy that accompanies it could be one way to jump-start Canada’s lacklustre growth.

With so many smaller countries looking to build one big tech company, like Google or Microsoft, why not create an open source ecosystem that bristles with creative, innovative ideas?

“The rest of the world is going to specialize in trying to have tech giants that are monopolists and building ‘unicorns.’ There’s a huge opportunity for other countries to be the places that are the home for open innovation that’s really very much in the spirit of science,” said Romer.

Whether this community grows in the private sector or in a university research environment doesn’t matter much. It’s the ideas and knowledge that do all the work, said Romer.

“One of the messages I would give to Canada or any other country in a similar position is think about how you could make yourself the place which is the leader in all of these open source kinds of efforts,” said Romer.

“Get the collateral benefits of being close to those as generators of ideas. And you have the private activity which will build actively on the public activity,” he said.

The summit has drawn criticism, especially from more market-oriented thinkers, who see it as an exercise in central planning.

Although Romer issued a stark warning against picking economic winners and losers in his speech, he also joked to the National Post that he was a “recovering University of Chicago economist” and said he does see a role for government in juicing innovation and economic growth.

“History has shown that rapid, sustainable, and widely distributed economic growth is never the result of central planning,” wrote Matthew Lau in the Financial Post, in a piece that worried the summit was saddling businesses with all kind of goals beyond producing goods and services that benefit society.

Romer argued that the market works most of the time, for example when it correctly identifies beneficial and profitable ideas to pursue or harmful and unprofitable ideas that are not worth pursuing. Romer said he spends most of his time worrying about all the opportunities that are harmful and profitable, especially in the world of tech. Although he was originally enthusiastic about the potential in Silicon Valley, Romer now believes that it has spawned companies, like Google and Facebook, that are a “danger in terms of the social fabric.”

“The government has not been strong enough to stop firms doing things that are clearly harmful to the prospects for growth and the quality of life,” said Romer.

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