Fair Trade Software: Open Source, Impact Sourcing and Fair Trade to create shared value

About

Fair Trade Software (FTS) is an economic model that delivers high-quality and cost-effective software for corporate customers whilst simultaneously helping to grow knowledge economies in developing countries. By labelling software (such as corporate websites) produced in this manner with a Fair Trade label it is possible to clearly signal to end-users and consumers that societal needs are being addressed, adding value for all parties. The concept of FTS was conceived in 2010 when Dutch IT firm Competa realised that by creating virtual teams with members in developing countries such as Kenya, it would be possible for software development services to meet Fair Trade criteria. Working in virtual teams is common in Open Source development, but by attaching a Fair Trade label a number of interesting economic possibilities open up. FTS is an example of the principle of Shared Value Creation, defined by Michael E. Porter and Mark R. Kramer (Harvard Business Review, 2011) as creating economic value in a way that also creates value for society. The concept of Shared Value recognizes that societal needs, not just conventional economic needs, define markets. By paying attention to what constitutes value for each stakeholder, Competa creates value for itself and the other parties. This presentation will expalin the FTS model, and show how this is an example of Shared Value Creation.