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• Working Paper | HBS Working Paper Series | 2020

  Open Source Software and Global Entrepreneurship

  Nataliya Langburd Wright, Frank Nagle and Shane Greenstein

  Does more activity in open source lead to more entrepreneurial activity and, if so, how much, and in what direction? This study measures how participation on the GitHub open source platform affects the founding of new ventures globally. We estimate these effects using cross-country variation in new venture foundings and open source participation. The study finds that a 1 percent increase in GitHub commits (code contributions) from people residing in a given country generates a 0.1-0.5 percent increase in the number of technology ventures founded within that country, a 0.6 percent increase in the number of new financing deals, a 0.97 percent increase in financing value, a 0.3 percent increase in the number of technology acquisitions, and a 0.1-0.5 percent increase in the number of global and mission-oriented ventures. The analysis develops an approach to identification based on various instrumental variables and shows that these associations can support causal inferences. We conclude that open source software (OSS) contributes to different rates of entrepreneurship around the world and therefore can act as a policy lever to improve economic development and can also indicate promising investment opportunities.

  Citation:

  Wright, Nataliya Langburd, Frank Nagle, and Shane Greenstein. "Open Source Software and Global Entrepreneurship." Harvard Business School Working Paper, No. 20-139, June 2020.  View Details

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• Article | Strategic Management Review | 2020

  Why Do User Communities Matter for Strategy?

  Sonali K. Shah and Frank Nagle

  In this essay, we explore how strategic management research and practice could benefit from considering the benefits and challenges obtainable through working with user communities. User communities represent a unique organizing structure for the exchange of ideas and knowledge: they are composed primarily of users working collaboratively, voluntarily, and with minimal oversight to freely and openly develop and exchange knowledge around a common artifact. The prevalence of user communities appears to be on the rise, as evidenced by communities across a variety of fields including software, Legos, sports equipment, and automobiles. The innovation literature has begun to document the power of user communities as a source of open innovation, yet the broader strategic implications of user communities remain underexplored: existing research coupled with examples suggests that user communities can be used to enact both differentiation and low-cost strategies. We discuss the benefits that user communities can provide and the challenges they can create for firms, develop a framework for understanding the differences between how user communities and firms are organized and operate, and theorize the conditions under which user communities will emerge and function, thereby illustrating the relevance and import of user communities to firms and the strategic management literature.

  Keywords: user communities; innovation; open source; collaboration; cooperative strategy; Knowledge Sharing; Strategy; Collaborative Innovation and Invention;

  Citation:

  Shah, Sonali K., and Frank Nagle. "Why Do User Communities Matter for Strategy?" Special Issue on Open Innovation. Strategic Management Review 1, no. 2 (2020): 305–353.  View Details

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• Article | Harvard Business Review (website)

  The Case for AI Insurance

  Ram Shankar Siva Kumar and Frank Nagle

  When organizations place machine learning systems at the center of their businesses, they introduce the risk of failures that could lead to a data breach, brand damage, property damage, business interruption, and in some cases, bodily harm. Even when companies are empowered to address AI failure modes, it is important to recognize that it is harder to be the defender than the attacker since the former needs to guard against all possible scenarios, while the latter only needs to find a single weakness to exploit. Enter AI insurance. The authors believe that businesses can expect stringent requirements when AI insurance is introduced to limit the insurance provider’s liability with rates cooling off as the AI insurance market matures. They offer a guide on preparing for the introduction of these insurance plans.

  Keywords: artificial intelligence; Machine learning; cybersecurity; Online Technology; Safety; Insurance;

  Citation:

  Kumar, Ram Shankar Siva, and Frank Nagle. "The Case for AI Insurance." Harvard Business Review (website) (April 29, 2020).  View Details

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