Proprietary Procurement is Stopping Open Innovation in Canada
The internet has fostered a huge growth in innovation. It was built open and fostered the exponential growth of open source software communities around the globe. Communities were built to allow people to build our modern digital world. Now, not everyone has embraced this approach, but it has become a cornerstone of almost all successful software projects.
Open source approaches to software development became competitive as the negligible cost of distributing bits made sharing ideas easy. The ability to use, modify and distribute software freely has also created a shift from products to services.
Unfortunately, government procurement is still firmly in the universe of atoms. Government IT simply hasn’t caught up with the internet.
If governments want to support innovation, they have to set the defaults to open. The Open First White Paper produced by the Government of Canada states that departments should be open by default “releasing all non-sensitive data, information and source code under an open licence that enables sharing and reuse.”
Right now the defaults for GC contracts seem to be either Crown Copyright or contractor ownership. Neither of those supports sharing. I would prefer if content & data were all licensed under a public domain CC0 license, but the Open Government Licence is fine. There are some good licenses mentioned in the Open First White Paper, my preference is the GPL. Some work by the GC is dual licensed so that it could be either under Crown Copyright or an open license. This is a bit more confusing, but would not interfere with innovation.
Defaulting to Crown Copyright means that government cannot innovate with people outside of the GC. If will obviously make innovation much slower.
Many governments assumed that giving contractors the IP would increase Canadian innovation, but this hasn’t panned out. Most government IT solutions are not with companies with Canadian IP. IBM Canada may be a company registered in Canada, but the IP is clearly not going to give Canadians any global advantage.
There are certainly examples where government contracts have handed over IP to Canadian-owned companies. It is possible that these contracts produced proprietary software that allowed a company to develop an innovative product for a global market. If there are success stories like this, they aren’t well publicized.
The reality is that much of the software IP that government manages is simply handed over to contracting companies (sometimes called ‘body shops’). One of the underlying principles of government procurement a belief that commercial exploitation of Intellectual Property:
- contributes to economic growth and job creation.
- is best achieved by the private sector.
“By default, the Contractor is to own the Foreground IP arising under Crown Procurement Contracts” — Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts
Even in Ottawa, most people aren’t aware of the role that human resource agencies play in filling important roles of the public sector. These agencies are simply interested in billing contractors on an hourly basis, and are often largely unaware of what is being developed. Many government departments are staffed by contractors who work alongside government employees but are not part of the public sector. The individual contractors may be passionate about the work they are doing, but almost all will have handed over their rights to any intellectual property produced to the agency they were hired by. Why would we expect a disinterested 3rd party to do anything with the IP that is being developed by these contractors? Their business model is clearly charging a percentage on top of what they can get for the talent the government needs.
If government contracts were open by default then there would be much less vendor lock-in. It would be much easier for small businesses to build on the IP that is generated through delivering government services. It would also allow businesses to build on IP that government paid for, regardless of who developed it.
If my company develops software for a government client and wants to take it to a broader market, we aren’t stopped from doing so. If another business fails to see the market potential of some software, then my company could choose to capitalize that, and vice versa. The team that build the software would have a natural advantage to see how it might be extended, but would not have exclusive rights to it.
I am a big advocate of open* but also understand the importance of developing the “special sauce”. That small proprietary piece that allows for a business to effectively “productize” an open source solution. It could be the customer focus, customization options or simply convenience. Companies working with Open* IP will still be able to commercialize it. A government procurement process will no longer be able to dictate the companies that have the opportunity to do this.
Business of course is not the only type of organization capable of innovating. Many government departments around the world are creating and publishing open intellectual property. Canada’s Web Experience Toolkit (WET) and the framework developed for the responsible use of artificial intelligence (AI) are both good Canadian examples. Canadian Digital Service has been big on leveraging open source solutions in the tools that they build.
The UK’s Government Digital Service has been leading the way. Because governments started working in the open we are seeing a lot more innovation happening between government agencies. Well expressed concepts are often more generally applicable than the original authors conceive. You can find a great many government agencies sharing both policy and code on GitHub. This is causing a huge amount of innovation in the Open Government community.
Open solutions developed by government can also lower the cost of entry for educational institutions and civil society. Opening up this IP allows for a broad swath of society to find ways to build on the investment that government has made. A solution that the government could adopt is to actively support a policy directive to the Open First White Paper which states a preference for open solutions. Any other licensing would require a justification.
If the goal of giving IP developed for government to the vendors that created it was to encourage the growth of Canadian business, then start there. Make it easier for small Canadian businesses to get contracts with government. Break up the process into smaller chunks that make it easier for small businesses to compete.
We want to hear your what you think of this, but especially if you work in procurement. Working together we can find a process which is fair and which is able to support an innovative and open government.
If you liked this, watch this space to links to upcoming articles.
- Government Procurement is Stagnating Canadian Innovation
- Micro Procurement and Incremental Innovations
- Innovation, Procurement and Sustainability
Additional Reading
- The next generation of open source software procurement models — Adrian Offerman
- Doing your civic duty one line of code at a time — Tee Morris
- Why Open Source Software Matters for Government and Civic Tech — Rufus Pollock
