If you his suggestion that open source doesn't innovate. It's something that proprietary software stifles.you might miss something that is critically important for understanding how innovation happens in the 21st Century. It's something that Jaron Lanier completely misses in
It's called the customer.
The dozens of examples of IT innovation that I read in judging the JBoss Innovation Awards? Customer innovations. And what are they increasingly innovating with? Open source.
In fact, in nearly every example I read they suggested that they could not do such innovation with proprietary software because of license restrictions and because they were locked out of the intricacies - the IP - of how the software they were using worked.
Open source unleashes customer innovation. Sure, the vendor is still important. Red Hat still had to write excellent software upon which customers would want to build. But innovation is no longer a one-way street where vendors spoon feed (or force feed, as the case may be) innovation to customers.
Open source makes innovation a two-way street. It allows end users to fashion innovation to suit their needs. It makes vendors and their customers co-innovators.
It is unleashing 21st-century innovation. Of the customer. By the customer. For the customer. Just as it should be.