Community Enterprises – Aliens under Attack

26 Pages Posted: 11 Apr 2011 Last revised: 22 Nov 2011

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Roger Luethi

University of Zurich

Margit Osterloh

University of Basel; Professor (em.) University of Zurich

Date Written: November 16, 2011


Management research has long focused on for-profit organizations that produce privately owned resources based on central authority and within well-defined boundaries. In recent times, a new kind of enterprise has emerged that we call Community Enterprises. They are private sector not for profit organizations that produce innovation resources and make them freely available to follow-on creators. Starting in the software industry, Community Enterprises have become leading providers of fundamental building blocks for innovation. They create enormous economic value by producing generative technologies that everyone can use and improve. However, this value is hardly measurable. Most importantly, Community Enterprises collide with the appropriation strategies of firms, which aim at acquiring exclusive control of useful resources. They are a major competitive force to for-profit firms and therefore are under attack. We analyze Community Enterprises as aliens in the market economy to which they provide essential resources. We find that market regulation cannot ensure their activities. Instead, we argue that the easiest way to do so is to support Community Enterprises through terms and conditions on government procurement and funding.

Keywords: organization theory, for-profit firms, community enterprise, Wikipedia

JEL Classification: D21, D23, J00, O31

Suggested Citation

Frey, Bruno S. and Luethi, Roger and Osterloh, Margit, Community Enterprises – Aliens under Attack (November 16, 2011). Available at SSRN: or

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002

Roger Luethi

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006

Margit Osterloh

University of Basel ( email )

Petersplatz 1
Basel, CH-4003

Professor (em.) University of Zurich ( email )

Südstrasse 11
Zürich, CH-8008

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