January 15, 2002

Stanco champions Free Software at World Bank

Author: JT Smith

On December 6, 2001, Tony Stanco, Senior Policy Analyst at the Cyberspace Policy Institute of The
George Washington University delivered the following presentation to the World Bank's InfoDev Annual
Meeting in Washington D.C. This speech is part of an initiative by the Free Software Foundation and The
FreeDevelopers Network (TM) to help create a software industry in every country. Only Free Software
allows each country to have its own software industry on an equal footing with everyone else, because it
requires everyone to share the same source code base. Also, a fully functional software industry
represents the best way for developing countries to join the world economy, because it doesn't require
large, expensive plants, as do most other major industries.

By Tony Stanco:

I would like to thank InfoDev for inviting me to speak about Open Source/Free Software. I am a Senior
Policy Analyst at The George Washington University's Cyberspace Policy Institute, where I advocate
Open Source/Free Software to governments and universities around the world. I am also the founder of
The FreeDevelopers Network. I have been asked to talk today to this august group about Open
Source/Free Software and how it can help poor and developing countries create their own IT

Software as important global industry

Software is critically important to the new high-tech world we are entering. It is the cyber nerve system of
information technology, and has a disproportionate economic impact on this new world. It is no
coincidence that software has created some of the world's richest companies. In fact, at one time
Microsoft was capitalized at over $500 billion. That was more value in one company than at any other time
in history, and it was all built on software.

Software can be such a high value product, because it has few requirements for expensive physical assets
in its production. This allows for gross margins upwards of 85% -- higher than any traditional plant-based
industry. Therefore, software development provides a unique opportunity for developing countries that
missed out on the physical infrastructure build-out of the last century to leap frog into this century and
make up for lost time.

Software development should be seen as a strategic issue for the World Bank and national governments,
because its creation depends on major investments in people, not major investments in plants. And one
resource that developing countries have is lots of people. As a result, if some of those people can be
educated to create software, those countries can tap into the world economy rather quickly.

I also want to point out that software development can be taught relatively easily. It is something that 14
year-olds are relatively good at, and generally they like to do it, too. Let's not forget that Bill Gates started
programming at about that age, and some people think he has done pretty well (though others have issues
with how it was done). There was a point at the height of the market when Bill Gates could have given $10
to every man, woman and child in the world and still have $40 billion left over.

So it is clear that software development is a very important economic activity. But why is Open
Source/Free Software important?

Open Source/Free Software

It may surprise some of you that Open Source/Free Software is not just about developing great software.
It is also an international social movement that touches on the fundamental human rights of freedom and

Professor Lessig and others say that software in the high-tech world is the functional equivalent of law.
They argue that computers are quickly becoming a cyberpolice force that mimics traditional law
enforcement. (And the recent Microsoft antitrust trial has left it already ambiguous whether national
governments will regulate Microsoft, or Microsoft will regulate national governments.)

The power of software is ubiquitous and inherent in this new digital age, because software and computers
are starting to control the way people interact with each other, with business and with their governments.
Think of what computer voting will be like and how e-government is already being defined by the contours
of software. In cyberspace, these transactions and relationships are dictated by the lines of software code,
just as traditional law defines their contours in real space.

The first concern of Free Software is, therefore, the potential impact of software on freedom and
democracy if these fundamental rights in cyberspace are left to a few white businessmen in America. This
is not what the media have reported about the Movement. They have reported that Free Software is about
superior software development, but that is only part of the story. The whole social movement aspect is
currently under-reported, but is nonetheless extremely important.

Some Open Source/Free Software facts

For those of you who don't know of the successes of Open Source/Free Software, here are some facts.

Merrill Lynch, in an In-Depth Report on October 30, 2001, called Open Source/Free Software a
"disruptive innovation" that has the potential to topple the traditional software business model, including
that of the industry heavyweight, Microsoft.

The same report also said that GNU/Linux has a replacement cost estimated at over $1 billion using
conventional measurements. This is an amazing figure, given that the Open Source/Free Software
Community created GNU/Linux in their spare time, without a traditional corporate hierarchy or
organization, and without relying on traditional intellectual property laws that some companies claim are
absolutely necessary for the development of professional software.

Some of you may have read that Microsoft called Open Source/Free Software a cancer, a destroyer of
intellectual property, and anti-American. At the beginning of this year, the company really went after
Open Source/Free Software. Of course, all this backfired, because, with Microsoft complaining so loudly
about the threat, even skeptics naturally started to think that there was something to it after all. Otherwise,
why would the world's most successful software company, with $35 billion in the bank and 3 separate
monopolies be concerned about a bunch of volunteers? And in the end, even Steve Ballmer was forced to
concede that Linux was "Threat number one."

The Open Source/Free Software Community has grown to about 300,000 developers in over 70 countries.
These 300,000 people are currently working on about 30,000 software projects, and most of these were
started in the last couple of years.

According to the European Commission's Study into the Use of Open Source Software in the Public
Sector, released in June 2001, from December 2000 to June 2001, the number of Open Source/Free
Software projects doubled. This fact alone should suggest that the future is very bright indeed for this
important Movement.

Security and Free Software

Another important fact to know about Free Software in these days after September 11th is its superior

The U.S. National Security Agency likes GNU/Linux so much that it is promoting its own Security
Enhanced SELinux, which it would like to see as the platform for the country's critical IT infrastructure in
e-government and e-commerce.

The NSA thinks that Free Software can be more secure than traditional, proprietary software, because
you can't hide back doors in code when everyone can inspect it.

The Cyberspace Policy Institute at George Washington University, the Free Software Foundation and The
FreeDevelopers Network are working with the NSA to help make SELinux a secure
e-government/e-commerce platform for use around the world.

How is the movement doing globally?

Many countries are looking to Open Source/Free Software as a way to develop their own home-grown
software industry. Some are doing it for national pride. Others for reasons of national security. Still others,
just because they don't like paying the Microsoft software tax. This group includes China, France, Brazil,
Japan, Germany, and India, among many others.

As an example of this trend, this past July Richard Stallman and I inaugurated the Free Software
Foundation-India and FreeDevelopers-India in Trivandrum, Kerela. This initiative was sponsored by the
public, private, and academic sectors there, with Kerela's Ministry of Information Technology, the Indian
Institute of Information Technology and Management, and TechnoPark, all involved.

Why did Kerela look to Open Source/Free Software? Kerela is one of the poorest states in India, but one
with a high literacy rate. Some enlightened politicians and developers there realized that India has one of
the largest software developer communities in the world, but that it does not share the wealth produced by
the world's software in a fair way.

In looking at the issue, they believed that the problem is not that Indian developers are not as good as
American developers, but that traditional proprietary software companies exploit the developers in India
by paying them less, and that these companies sometimes require the best and brightest to leave India and
work elsewhere. They further believe that Indian developers were treated as second-class software
citizens, because they didn't have the right to study and analyze the code as did some developers in other
countries, thus giving their competitors an unfair advantage. As a result, the forward-thinking people in
Kerela adopted Open Source/Free Software for some e-education and e-government projects.

Open Source/Free Software allows India to place its software developers on an equal footing with
American and European developers, so that the products produced by the Indian developers are the result
of their abilities, and not hindered by restricted access to secret code. It was this ability to educate future
software developers to create their own software industry that attracted Kerela to Open Source/Free

I believe that Open Source/Free Software can help InfoDev bring other such innovative IT projects to
developing countries, thereby helping them create their own software industries, so that they, too, can
enjoy the fruits of the world economy in self-sustaining ways.

By the way, we are looking for more Open Source/Free Software participants and partners, so if you are
interested please contact me. Thank You.

Tony Stanco, Esq.

Senior Policy Analyst

Open Source/Free Software and e-Gov

Cyberspace Policy Institute

George Washington University

2033 K Street N.W., Suite 340

Washington, DC 20006

202-994-5513 Fax:202-994-5505





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