An explanation for why there has been so much more progress in software than anywhere else is that it is one of few areas where firms have been able to experiment and release products unhindered. One reason is that for the purposes of the law, software is treated as a service, meaning that malfunctions are not exposed to the same legal risk as products.
Europe is big on open source software (I guess because doing a startups is so hard). I wonder how that's affected by the Liability Directive. Linus Torvalds may be in for some legal trouble.
(14) Free and open-source software, whereby the source code is openly shared and users can freely access, use, modify and redistribute the software or modified versions thereof, can contribute to research and innovation on the market. Such software is subject to licences that allow anyone the freedom to run, copy, distribute, study, change and improve the software. In order not to hamper innovation or research, this Directive should not apply to free and open-source software developed or supplied outside the course of a commercial activity, since products so developed or supplied are by definition not placed on the market. Developing or contributing to such software should not be understood as making it available on the market. Providing such software on open repositories should not be considered as making it available on the market, unless that occurs in the course of a commercial activity. In principle, the supply of free and open-source software by non-profit organisations should not be considered as taking place in a business-related context, unless such supply occurs in the course of a commercial activity. However, where software is supplied in exchange for a price, or for personal data used other than exclusively for improving the security, compatibility or interoperability of the software, and is therefore supplied in the course of a commercial activity, this Directive should apply.
(15) Where free and open-source software supplied outside the course of a commercial activity is subsequently integrated by a manufacturer as a component into a product in the course of a commercial activity and is thereby placed on the market, it should be possible to hold that manufacturer liable for damage caused by the defectiveness of such software but not the manufacturer of the software because the manufacturer of the software would not have fulfilled the conditions of placing a product or component on the market.
Excellent post that opens up new questions for me. It is true that we need more "superstars" and, above all, new superstars since the old ones seem to be giving up. Should we apply the principle of creative destruction and also promote it from the public sector?
On the other hand, and as you say in the article, there are many companies with a platform business model where the strategy tends to "The winner takes it all." How do we apply creative destruction to these cases?
Finally, it is striking that most of the digitalization in Europe runs on American operating systems. For example, isn't it strange that in our relationship with the European Commission we have to use Microsoft Teams as a video conference support?
Great piece. I’m a little confused about how to read the graph. Is it the average firm productivity in the industries? Basically, my confusion is why don’t they add up to the total, since superstars pull up the average.
Europe is big on open source software (I guess because doing a startups is so hard). I wonder how that's affected by the Liability Directive. Linus Torvalds may be in for some legal trouble.
Mixed bag. This is what the Directive says on OS:
(14) Free and open-source software, whereby the source code is openly shared and users can freely access, use, modify and redistribute the software or modified versions thereof, can contribute to research and innovation on the market. Such software is subject to licences that allow anyone the freedom to run, copy, distribute, study, change and improve the software. In order not to hamper innovation or research, this Directive should not apply to free and open-source software developed or supplied outside the course of a commercial activity, since products so developed or supplied are by definition not placed on the market. Developing or contributing to such software should not be understood as making it available on the market. Providing such software on open repositories should not be considered as making it available on the market, unless that occurs in the course of a commercial activity. In principle, the supply of free and open-source software by non-profit organisations should not be considered as taking place in a business-related context, unless such supply occurs in the course of a commercial activity. However, where software is supplied in exchange for a price, or for personal data used other than exclusively for improving the security, compatibility or interoperability of the software, and is therefore supplied in the course of a commercial activity, this Directive should apply.
(15) Where free and open-source software supplied outside the course of a commercial activity is subsequently integrated by a manufacturer as a component into a product in the course of a commercial activity and is thereby placed on the market, it should be possible to hold that manufacturer liable for damage caused by the defectiveness of such software but not the manufacturer of the software because the manufacturer of the software would not have fulfilled the conditions of placing a product or component on the market.
Excellent post that opens up new questions for me. It is true that we need more "superstars" and, above all, new superstars since the old ones seem to be giving up. Should we apply the principle of creative destruction and also promote it from the public sector?
On the other hand, and as you say in the article, there are many companies with a platform business model where the strategy tends to "The winner takes it all." How do we apply creative destruction to these cases?
Finally, it is striking that most of the digitalization in Europe runs on American operating systems. For example, isn't it strange that in our relationship with the European Commission we have to use Microsoft Teams as a video conference support?
Great piece. I’m a little confused about how to read the graph. Is it the average firm productivity in the industries? Basically, my confusion is why don’t they add up to the total, since superstars pull up the average.
Thanks! I think they do add up to the total — it is the weighted sum of the sector-specific averages. Graph is from Draghi p.20