Distributive Enterprise

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Description

From the Open Source Ecology wiki:

"A Distributive Enterprise (DE) is a social enterprise that focuses on open economic development - open collaboration in innovation. In particular, it is a transparent enterprise which maintains the open replication of such an enterprise - independently by others or with incubation assistance - at the core of its operational strategy. As such, this differs from a traditional franchise - in that the Distributive Enterprise (perhaps to be called Open Franchise?) has no strings attached. The Distributive Enterprise is a business model that applies to any product or service.

The assumption of a DE is that significant potential exists for market domination by a DE in any sector. OSE theorizes here that a DE is destined to become a dominant market force, as long as true Economic Time Binding mechanisms are developed within the field of Open Source Product Development. This is based on an assumption from game theory, which states that cooperators win - and as such, collaboratively-developed enterprise can become a dominant market force. The assumption is that cooperation allows many individuals to build enterprises, enabled by the instant communication of the internet age. When applied to large-market items (billion dollar and larger market items), which are currently monopolies or behave in a monopolistic fashion, the result of a DE is significant improvement in the distribution of wealth. 'Market domination' via DE is a misnomer, in that such 'domination' occurs by the force of many distinct actors. Thus, it is not the typical 'domination' associated with a single or small group of dominating agents.

Further, theory and practice of open source software - and now hardware - indicates that the best products arise when open source development is operative. The best case of this is shown clearly with RepRap - the open source 3D printer - which now forms the basis of a billion dollar industry [1]. The promise of Distributive Enterprise is that lowering barriers to entry carries true democratizing potential, and as such, will be the dominant market force when barriers are lowered to a sufficient point. Practically speaking - if the best product of some sort is developed (under the assumption that intellectual capital is the largest enabler of economic power) - then adoption can be widespread when intellectual capital has reached the point of allowing import substitution for items that were previously possible only in the centralized production scenario.

The benefit is allowing more companies or individuals to produce better products. Customers benefit by increased access to quality goods and services. By pooling knowledge, all the businesses in the network benefit from better design and lower development costs.

(Discuss how the ecosystem generates value for the network, and more value than democratic capitalism, while not requiring protectionism)

The goal is to create an economic system that promotes not only production of wealth, but also, its distribution. Peak performance organizations - ones that are ethical and distributive - are the intended outcomes. In general, a distributive enterprise tends towards regenerative development.

Someone interested in replicating an enterprise has several options. One option is to download all knowhow, designs, and enterprise plans for free. Or, the person may be trained by the DE organization such as OSE. OSE is currently developing immersion training for social entrepreneurs.

The DE model allows free download of plans because downloading does not take any energy on the part of the entity or person who produced the plans. However, if the Developer is teaching or putting in effort, it is good for the Developer to get paid. This is an ethical model which allows replication to happen freely, while allowing the Developer to be financially sustainable. Thus, the developer may focus on further innovation - which is the essence of open source economic development.

There are several models for financial sustainability of entities or individuals who publish their intellectual property (IP) openly. Some of these financial models require a fundamental mindset of abundance, but others can be understood from the mindset of scarcity. From an abundance mindset, 'the more you give away, the more comes back to you.' If one does not believe in such abundance, a revenue model based on production or education will suffice. In the case of production, it is likely that this person's sales will be driven by the marketing of the developer's primacy in a given field. This production scenario further assumes that work or production can be outsourced readily using advanced production and communication technology available today. The education model, on the other hand, revolves around the high value of skill that can be converted to tangible earning by teaching, holding workshops, or other means.

In practice, it is typical for the developer who shares his IP to have mastery and primacy in a given field of endeavor. In such a case, that individual is in high demand for various contracts, consulting gigs, speaking engagements, and many other opportunities - and marketing is ascertained by their fame. THere tends to be a positive feedback loop - reifying the notion that 'the more you give the more comes back to you.[ Making a living is not an issue in such a mindset, and the individual with that mindset operates as a high-performing peak player.

The goal is to address the issue of artificial scarcity and Disparity of Wealth as related both to peoples' lifestyles and to global geopolitics. Another goal is to embody a Higher Purpose in the economic system and in lifestyle choices.

To test the usefulness and purpose of its results - a distributive enterprise dogfoods its own products. Participants in distributive enterprise aim to blend their lifestyle with their work - as an expression of consistency between one's values and one's actions. This leads to a connection of the economy to addressing pressing world issues. As Gandhi said, be the change you want to see in the world.

The Distributive Enterprise concept builds upon the notions of appropriate scale proposed by E.F. Schumacher, upon the concept of economic swadeshi proposed by M.K Gandhi - and it is updated by bringing it into the digital age where information can be shared readily. The Distributive Enterprise model is an expression of human-centered economics of collaborative development.

OSE's theory is that any Distributive Enterprise - once the enterprise reaches viral replicability criteria - will dominate the marketplace compared to proprietary products. Proprietary products carry inherent development, marketing, organizational overhead, and maintenance cost inefficiencies, while open source products are based on principles of optimization and collaborative efficiency. Open source products are aimed at efficient production on a small scale, or for machines, on the scale of one. As a network of many distributed producers, OSE predicts that the combined effort of many small enterprises can produce a volume of good and services that mathes or exceeds centralized, mass production. For this to happen, mechanisms of quality control, the tools for efficient small scale production, self-marketability, and optimization of the design are required. All of these are tractable issues, and are part of the viral replicability criteria."

(http://opensourceecology.org/wiki/Distributive_Enterprise)