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Article #51Software flying south ?
From: Martin Sieg
Date: Wed, 25 Mar 1998 00:00
Date: Wed, 25 Mar 1998 00:00
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This is of interest and ripe for comment. Martin. >>> FORWARDED from Dr Richard Heeks <mzdid10@FS1.EC.MAN.AC.UK>>>> > FLYING SOFTWARE: Is the Information Society heading > South? > > In 1998, developing countries will export around US$3bn- > worth of computer software to Western markets, making use of > telecommunication networks: a major signal that Information > Society benefits can be global. However, such 'headline > images' are deceptive. Software production retains output, > location and skill skews that provide limited benefits for DCs. > These skews will be difficult to eliminate, but government > action is needed to address them. > > Over the past five years, all DC software exporters worth their > salt have invested in telecommunication links and many are > Internet-connected. The new image projected is one of 'virtual > development' in which clients sitting in the West interact with > software professionals developing packages overseas. The > reality, though, is somewhat different with most software > export contracts involving: > >>A skewed output profile: software packages represent a > tiny proportion of total DC exports. Thus, the Microsoft of the > 21st century is not currently being born in the back streets of > Bangalore. Instead producers in the South provide software > services. > >>A skewed location profile: large amounts of > development work take place at the client's site, i.e. by having > DC software developers fly over to work with the client. > >>A skewed skills profile: most work undertaken by DC > developers is relatively low-skill software construction and > testing, leaving the high-skill tasks of analysis and design > residing in Western hands. > > As a result, much of the US$3bn earned leaves developing > countries to pay for: travel and living allowances of the DC > developers who work at the client site; marketing expenses; > information and communication technology imports used for > DC-based contract components; and profit repatriation by the > many multinationals involved in this trade. > > The dominance of service over package exports can be > explained by the almost insuperable barriers of cost, skills, and > information that exist in the package sector. But why do the > other skews persist? Three factors can be highlighted: > >>The 'Information Superhighway' is not a reality for most > DC users. Fax and email correspondence, not > videoconferencing, remain the backbone of communications. > These mechanisms cannot provide the depth of interaction that > software development requires. > >>Client uncertainty about DC firms' skills, capability and > credibility. To reduce risk, clients choose to retain as much > control as they can over production. This means only > contracting out relatively simple, low-skill tasks, and having > work carried out under their noses. > >>A 'programmer heavy' skills profile in developing > countries, with no shortage of raw recruits but very few > experienced project managers, analysts and designers. > > How can developing countries break out of this 'body shopping > prison'? The spread of global networks will help, but only > addresses the first factor, not the second two. Time will also > help, as individual client-developer relationships move slowly > up a 'trust curve' and uncertainties diminish. But, finally, there > is a role for the state. > > The Department of Defense was a key driver in the creation of > the US software industry, and all subsequent development in > other countries has been state-initiated, state-led or state- > promoted. Selective policy liberalisations - such as removal of > software import tariffs - have a role. However, the elimination > of all state interventions and the free play of market forces will > lead only to the atrophy of local software-related technological > capabilities. > > >From South Africa to Egypt to India to Singapore the story is > the same: building a viable software industry requires > government promotional interventions in financing and > marketing, in skills and infrastructure development, in > procurement, and in the diffusion of best practice. > > REFERENCES: > Heeks, R. (1996) India's Software Industry, Sage Publications > Heeks, R. (forthcoming) Building Software Industries in > Africa, IDPM (University of Manchester) Working Paper > > --------------------------------------------------- > > Dr Richard Heeks, Institute for Development Policy and > Management, Precinct Centre, University of Manchester, > Manchester, M13 9GH, UK > T: +44-161-275-2870 > F: +44-161-273-8829 > E: richard.heeks@man.ac.uk > W: http://www.man.ac.uk/idpm/
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X-Google-Language: ENGLISH,ASCII-7-bit X-Google-Thread: 105940,672e3c1f52d7d80,start X-Google-Attributes: gid105940,public From: Martin Sieg <siegm@GUSUN.GEORGETOWN.EDU> Subject: Software flying south ? Date: 1998/03/25 Message-ID: <3519B683.81B0621@gusun.georgetown.edu> X-Deja-AN: 337746254 Sender: Media for Development in Democracy <DEVMEDIA@LISTSERV.UOGUELPH.CA> Content-Transfer-Encoding: 7bit Approved: NETNEWS@AUVM.AMERICAN.EDU * Comments: To: CCT-L Listserv <CCT-L@listproc.georgetown.edu> Content-Type: text/plain; charset=us-ascii MIME-Version: 1.0 Newsgroups: bit.listserv.devmedia