OSH Entrepreneurs and Value Creation

10 OSH is characterized by knowledge sharing and decentralization enabled by information and communication technologies (ICT) (Moritz et al., 2016). Ideally, OSH uses readily-available components, materials and standard processes, maximizing the possibility for others to make and use the hardware. OSH is a collaborative, product development process, in which building plan designs, assembly instructions and bills of material are made publicly available online for anyone to study, replicate, modify, distribute, and sell, including hardware based on those designs (Raasch et al., 2009; Bonvoisin et al., 2016; Bonvoisin et al., 2017).

11 OSH entrepreneurs are a novel type of entrepreneurs who forego intellectual property ownership and license their products as open source to run their businesses. They wager that the benefits reaped from their communities to lower their development, recruiting, and customer acquisition costs will offset the negative risks of lowering entry barriers to competitors (Li, Seering, 2019). These entrepreneurs tend to follow the maker ethos and open-source culture of being an actor rather than a spectator in a technological world (Waldman-Brown et al., 2015). While making money is not at the heart of OSH, products created in this way generate value and thus introduce the question of the nature of business models that should be associated with OSH.

12 Traditional business model research emphasizes value creation for customers in exchange for money for the business, focusing on questions of what and how value is created (Teece, 2010; Zott, Amit, 2010). In addition, research on Stakeholder Theory and Sustainable Business Models focuses on questions such as with and for whom value is created. Value becomes a net outcome meeting an actor’s business or personal needs, whether ecological, social, or economic in nature (Freudenreich et al., 2020).

13 Research has studied the components of OSHBM and has concluded that there is a blurring of boundaries between consumers and producers (Moritz et al., 2016; Thomson, Jakubowski, 2012). OSHBM appear to have “fuzzier systems and more units” (Pearce, 2012, 2017; Menichinelli, 2015) and are proto business models, identified as being particularly value driven (Thomas, 2019; Unterfrauner, Voigt, 2017; Fjeldsted et al., 2012).

14 The importance of community stands out as a key attribute of OSHBM (Fjeldsted et al., 2012; Boudreau, Lakhani, 2009; Bonvoisin et al., 2016; Mies et al., 2019; Wolf, Troxler, 2016; Troxler, 2019). Research, having studied the modes of governance on an intra-community level (Mies et al., 2019), has found that OSH communities are composed of active and passive users, developers and mentors, unconnected through organizational affiliation but gravitating around a core team in a social model commonly referred to as an “onion model”. Through an agile, democratized, and distributed production process, OSH communities “communitize” technology from private institutions to the public (Bonvoisin et al., 2017; Kohtala, Hyysalo, 2015). Within them, geographically dispersed contributors are coordinated in online platforms by a core team. Li and Seering (2019) have found that a sharing community increases the customer’s perceived value of an OSH innovation. Furthermore, members help decrease the risk of product failure by providing feedback. They help reduce R&D costs; they help introduce products to ideal customer pools; they provide a talent pool for recruitment and help to provide resources for product customer channels and relationships.

15 Extensive research has been done on the archetypes and typologies of ideal business model examples used in OSHBM (Franz, Pearce, 2022; Pearce, 2012, 2017; Li, Seering, 2019; Thomson, Jakubowski, 2012; Zimmerman, 2014; Wolf, Troxler, 2016; Moritz et al., 2016; Danish Design Center, 2018; Thomas, 2019). Thomas (2019) proposes a five-stage framework wherein OSH initiatives can generate value through a compounding effect by iterating through phases of financing for capital; fine-tuning the value proposition by monetizing products and associated services; leveraging the organization’s corporate competence; orchestrating and monetizing exchanges among actors, and finally franchising through the distributed enterprise model to increase impact.

16 The implications of OSH entrepreneurship drive novel value configurations. Value becomes distributed, as OSH project initiators diffuse the concept by training other entrepreneurs to replicate the model elsewhere for more impact (Thomson, Jakubowski, 2012). Regenerative value ensures that resources be harvested no faster than they are produced or, even better, are designed to give back to nature. Generative value empowers learning and sharing. The wager of technological openness is to remain free “in a mangle”, relying on one another to solve problems collectively that no single organization could tackle alone, and “to leave the pathways of innovation open” (Troxler, 2010; Hess, Ostrom, 2011; Eglash, 2016; Raworth, 2017; Zittrain, 2006). The novelty of OSHBM is that through distributive, regenerative, and generative design, OSH has the potential to generate, appropriate, and preserve value while positively altering the current, unsustainable, centralized economies of scale and their associated extraction of materials and labor.

17 Based on this OSHBM review, the gap identified is that while collaboration with the actors in its ecosystem is a key attribute of OSHBM, no research specifically tackles the spatial, city-level context nor the dynamics among external stakeholders that are conducive for OSH initiatives to grow in scope and scale (Freudenreich et al., 2020; Jouison-Laffitte, Verstraete, 2008). The gap is thus twofold: dynamic interactions in a spatial context.

Generic Considerations or Research Design

27 Considering that we are studying an emerging phenomenon, in answer to our research question, we opted for a qualitative exploratory case study, as the “phenomenon under study is not readily distinguishable from its context” (Yin, 1993, p. 3). Research suggests that a crucial pathway for conceptual innovation is the construction of theoretical ideas on the basis of empirical data (Timmermans, Tavory, 2012). Hence, case study research has been found to be “highly suited” for innovation management research from a theory building perspective (Eisenhardt, Graebner, 2007; Goffin et al., 2019).

28 Table 2 displays our research design. The main research gap identified is that currently OSHBM research does not cover the nature of the interaction among stakeholders and OSH entrepreneurs located at a city level. The theoretical sampling was done within the scope of the Franco-German Open! Research project. The outcome is a model displaying how OSH initiatives may grow in scope and scale.

Context Description: Barcelona

29 The city of Barcelona is used as a revelatory case (Yin, 1993) because of its pivotal position in the Fab City Network and the number of commons-based cooperative platforms originating from the city, placing it at the heart of global trends like open technology and the circular economy. Barcelona counted 1,340 commons-based collaborative economy platforms at the time of the study in 2018 (Fuster-Morell, Espelt, 2018). In 2022, according to the Free Knowledge Institute, there are over 1000 in Catalonia, most of which are in Barcelona [3]. Moreover, earlier research confirms the importance of middlegrounds in fostering innovation in Barcelona, although it does not address the questions of extending value creation and capture beyond organizational boundaries (Capdevila, 2015, 2017).

30 The city is pioneering open, participative technology initiatives to make itself self-sufficient in terms of energy, industry, mobility, and even food. The Fab City project was born in Barcelona, and today the Global Academany Distributed Master [4], is coordinated from there as well. The team that founded the Fab Lab integrated the city’s leadership, which helped to establish a public network of Fab Labs per district. This built on the work of urban planner and engineer Ildefons Cerdà, who designed the 19th-century “extension” of Barcelona called the “Eixample”, already pioneering food sovereignty and social inclusion. Indeed, Barcelona is often cited as a palimpsest of technological and urban innovation centered on human values, a manuscript that is being continually rewritten (Barril, 2008). Therefore, it provides an interesting case for studying the historical progression of research on territorialized innovation, affected by socio-economic changes such as globalization, glocalization, and the development of collaborative platforms (Gay, Szostak, 2020).

Data Collection

31 Data was collected during four one-week stays in Barcelona over a four-month period from March to June 2018. One of the authors was co-hosted by two public instances: the Digital Commons Institute (Dimmons) at the UOC (Universitat Oberta de Catalunya) and the Free Knowledge Institute. Beginning with the three previously identified local OSH startups (Bonvoisin et al., 2016); a snowball sampling was conducted to find key stakeholders in the Barcelona ecosystem working in the field of digital production and open technology. Avoiding the subjective bias potential in official secondary data, the objective of the interviews was to seek firsthand knowledge of what these actors considered important in regard to the nature of their interactions, and how that might provide information on means for OSH initiatives to grow in scope and scale.

32 Primary data collection includes ten hours of semi-directed interviews with 15 actors, representing 13 respondents. For purposes of anonymity, all names were changed to alphabetical letters (a-m in Table 3). Face-to-face interviews focused on the stakeholders’ own scope of activities relating to OSH, the nature of their interactions with other stakeholders, their understanding of Barcelona specifics conducive to OSH, and finally, their identification of value created by OSH initiatives (see Appendix A).

33 Additional data was gathered through participatory observation during five workshops and conferences organized by key stakeholders, thus allowing for direct interaction with them, totaling 41 hours.

Table 2 – Details of data collection

Table 2 – Details of data collection

Data Analysis

34 Recordings were transcribed and coded using Sphinx Quali software in order to conduct a thematic analysis (Hsieh, Shannon, 2005; Miles et al., 2014). The macro themes were defined corresponding to the categories in the interview guide, namely the type of value created, captured, and shared; the political, economic, social, technological, environmental, and legal trends specific to Barcelona and the stakeholders, and the strategies and flows among them. These were subsequently refined into sub-categories, which were both deductive and inductive, in order to provide for a new, emerging understanding (see Figure 1).

Figure 1 – Coding macrothemes and subcategories

Figure 1 – Coding macrothemes and subcategories

35 The purpose of the analysis was to identify the most salient themes appearing in the data gathered, as well as the words appearing most frequently for each theme. The software functions on lemmatization, meaning that it sorted words from the transcriptions based on their common semantic roots. To simplify the analysis, common lemmas were grouped and further associated with synonyms. The frequency of macro themes and subcategories is displayed in Appendix B.

Prerequisites for OSH Initiative Support and Underlying Risks

38 The semantic analysis revealed an abundance of terms related to what the stakeholders considered important around the themes of “making”, “freedom”, and “collective innovation” (see Table 2). “Citizens”, “Empowerment”, “Fab Labs”, “Open Technologies”, “Innovation” and “Sovereignty” all refer to participatory democracy in the sense that, as people become involved in the process of collaborative innovation, the process will be educative and help in turn to forge new levels of involvement and awareness. In this sense, participation is not only the result of political consciousness, it helps to create it.

39 Although the point is not to single out core principles to which everyone must pledge allegiance, Commons are upheld by a variety of different values (Ostrom, 1990). Taken together these terms do somehow constitute a common front. Respondent “h” explained “technical revolutions will serve the common good. This movement faces a big challenge, which is all about confronting the present actual power games and the power concentration that we see in the digital space, and to make sure you can decentralize it so you can give the power back to the people, and you can democratize production”.

40 Respondent “f” added, “I think everyone has their own drive. There are different motivations behind it. There is always an overlap, so you can always find things in common, like ‘Oh we can do this together’”. Nevertheless, “f” added, the most important part is the “community and the sparks and new synergies that happen when people come together”. The value that OSH innovation brings is the shift in mentality from a consumer mindset: going to buy a chair at Ikea – to a creator mindset. Respondent “m” answered “whenever you buy a machine that is able to make a table, that machine – or that way of thinking – allows you to think that you can make a building, or a whole city”.

41 The salient issues appearing from our data concern the importance of creating technology for citizens, in order to foster the intent of food, energy, and technological sovereignty to reach Fab City objectives, as well as the shadow side of such initiatives and the risks associated with them.

Proposal for an OSH growth and scaling process: the pinball model

50 Our findings indicate a process through which OSH initiatives can interact with local and global actors to grow. Like the ball in a pinball machine, OSH initiatives need to bounce off and interact with the different stakeholders in the Barcelona OSH ecosystem in order to get funding, to join the city’s middlegrounds, to get to know their community and their ecosystem, and to build a strong network and consortium. The steps of the process the authors infer are: 1) build a tech for citizens project, 2) apply to governmental calls, 3) join the middleground and 4) build a consortium. These steps can happen simultaneously.

Figure 2 – Pinball model: How to leverage stakeholders to grow an OSH initiative

Figure 2 – Pinball model: How to leverage stakeholders to grow an OSH initiative

51 Figure 2 displays these stages. As projects iterate through rounds of interactions with external stakeholders, they become more valuable. The notion of generating traction among those interviewed was not interpreted as how to turn OSH initiatives into Fortune 500 Companies, but rather as how to reach the tipping point, where a niche project becomes one which will be useful in improving the lives of everyday citizens.

Deploying OSHBM from DIY to DIT

62 The stakes are high given the sustainability and democratic expectations that OSH initiatives hold. How may OSH initiatives grow in impact and scale to reach the objectives of Do-It-Together (DIT) and social manufacturing (Franz, Pearce, 2022; Marche et al., 2022). To date OSH has just not had the same impact and spread as OSS. Records on Github accessed on 4^th July 2022 indicate that there are 88 commitments to project a, 10 commitments to project b, and no files for project c.

63 A number of reasons can be given for this lack of traction. Hardware is hard, and costlier upfront than software (Tincq, Bénichou, 2014; Erhun, 2018). Another reason is the lack of coherent socio-political action necessary for impact and the lack of inclusion of the informal sector (Kohtala et al., 2020; Troxler, Maxigas, 2014; Waldman-Brown et al., 2014, 2015). How then may a niche project improve the lives of everyday citizens? Perhaps as previous research on sustainable entrepreneurship suggests (Hockerts, Wüstenhagen, 2010), these novel initiatives are not necessarily following customer demand, but creating future market space which feeds the collective imagination of what is possible. Moreover, are the Social Manufacturing and DIT concepts an adulteration of OSH principles? Or do DIY and DIT approaches have a compounded impact leading to the further transformation of industry from degenerative to regenerative? In any case, our research indicates three key success factors for deploying the impact of OSHBMs by fostering 1) values; 2) ethics; 3) governance.

Values

64 As noted in our findings, OSH initiatives are value driven around notions of making, of freedom, and of collective innovation, which materialize ideals at the core of the degrowth imaginary, such as autonomy and conviviality central to the objectives of Transition Towns, and the Fab City Collective (Kostakis et al., 2015; Fab City Collective, 2018; Hopkins, 2019). In their research on the historical progression of research on territorialized innovation, Gay and Szostak (2020) found that shared values have always been at the center of the dynamics of agglomeration.

65 The plural form of values stands out as the cementing factor binding stakeholder interaction. This infers that OSH projects serving the common good and putting technology at the service of citizens are more likely to gain stakeholder support. This finding supports earlier work suggesting that OSH projects with strong social or environmental vision were more likely to receive contributions (Bonvoisin et al., 2017; Thomas, Evrard-Samuel, 2017).

66 Finally, we suggest that values are key to understanding OSHBM and the interactions dynamics among firms and their extended stakeholders as values-based innovation helps address complex societal problems. We agree that if values are codified and reinforced, “they turn into obligatory normative orientations […] and can play a crucial role in the formation of networks” (Breuer, Lüdeke-Freund, 2018), which is line with epistemic community manifestos (Cohendet et al., 2014).

Ethics

67 To ensure that OSH projects grow in coherence with their established principles and their sustainability promises, the quality of the middleground needs to be maintained through ethical digital standards so as to govern these initiatives through participative democracy. Indeed, open technology needs to be open governance in order to fulfill its potential and to contribute to a sustainable development of society (Fuster-Morell, Espelt, 2018). If not, open technologies will not be so open and risk being taken over by extractivist behemoth intermediaries, which is what happened with the socalled “shared economy” (De Filippi, 2018).

68 To that end, emerging initiatives are worth mentioning as they are setting a basis for reflection on digital ethical standards and Open governance in Open Design (Troxler, 2019; Ostrom 2010). The first is the “commons balance” as part of the Decentralized Citizens Owned Data Ecosystem European project (Fuster Morell et al., 2017). This commons balance is a holistic framework created by the Dimmons Institute, serving to assess the pro-democratic and sustainable qualities of cooperative platforms. This relates to OSH, since these refer to the exchange, sharing, collaboration, and production of value, including labor among distributed groups supported by a digital platform. The democratic balance is an analytical tool that helps to visualize the democratic qualities of collaborative economy initiatives, to differentiate models, to provide insight into the sustainability of their design, and to inform about technological development (Fuster-Morell, Espelt, 2018).

69 Moreover, Freudenreich et al. (2020) have developed a framework analyzing the different types of value created with and for different stakeholders and the different kinds of value exchanged between the company and its stakeholders. According to their research on Business Models for Sustainability (BMfS), critical issues that have so far received insufficient attention are : value creation for stakeholder networks or the role of different business functions in managing stakeholder relationships for BMfS.

Governance

70 The question of governance lies at the heart of middleground innovation dynamics and grows in importance as OSH projects grow in scale, progressively emerging from underground Fab Labs until they reach everyday citizens (Gay, Szostak, 2020; Cohendet et al., 2021). Some researchers, like Störmer and Herstatt (2015), on the differences between endogenous and exogenous (self-versus firm-initiated) governance on innovation communities, find that grassroot democratic processes can “be a double-edged sword”. They suggest that the key to good governance lies “not between endogenous versus exogenous, but in the design of helpful, fair, and purposeful governance rules”. As such, the physical-virtual and global-local dynamics observed in OSH projects can serve to mitigate conflict and boost the performance of communities. Indeed, just as the OSH innovation itself becomes “faster, cheaper, and more efficient” through rounds of forking and modification by distributed developers (Bonvoisin et al., 2017), hopefully the standards guiding these communities will adapt and improve.

71 In sum, initiatives instigated by the Barcelona City Council guiding cities on how to deal with open technologies are paving the way as they are taken up by the Fab City network to inspire and help identify best practices.