Software Exports and Developing Countries : Implications for Argentina
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1 Software Exports and Developing Countries : Implications for Argentina Dr Brian Nicholson University of Manchester, UK Professor Sundeep Sahay University of Oslo, Norway
2 Agenda Our background Global marketplace for software and information services The software export success model (SESM) Empirical experience with SESM Some implications for Argentina
3 Background: Research Program Ongoing since programme of research : software development outsourcing to India from USA, Canada, UK, Japan, Korea, Singapore Small companies (with Erran Carmel) Norway - Russia software development Germany-India relationship Business process outsourcing: accounting services Software export success and developing countries (with Richard Heeks): Iran
4 An optimistic viewpoint India : 7% of GDP, $ 57 bn. By 2008 Part of network society Trickle down effects Better employment conditions Knowledge work Modernisation, socio economic development Global markets, funding, know how Engage or be marginalized
5 A pessimistic viewpoint Anti globalisation movement Work related: digital sweatshops - footloose, deskilled, temporary, gender & age discrimination, international division of labour Ethical concerns: race to the bottom, managerialism, tax avoidance Societal related: Mcdonaldization destruction of local culture and tradition, benefits an elite, no evidence of poverty alleviation Industry related: : weakens domestic industry, loss of jobs in outsourcing country Ongoing legislation to ban in two USA states
6 Background to SESM Frameworks and previous literature on software export success First tier suppliers : 3I s India, Israel and Ireland Second Tier : Russia, Philippines and China New aspirant countries: South Africa, Costa Rica, Ukraine, Mexico, Argentina, Mauritius, Bangladesh, Pakistan, Iran Empirical application : Iran
7 The Software Export Success Model International M arket Demand for Software International Linkages Trust National Software Industry Clusters (Com petition) Collaboration National Software-Related Infrastructure People Technology Finance R& D O ther National Software Vision/Strategy Government Industry
8 International demand: geographical perspective Sustained USA demand for offshore outsourcing despite downturn India US$6 bn Forrester estimates doubling of global offshore software outsourcing by 2004, 3.3 mn. white collar jobs & $ 136 bn. in wages will move out of the US to low cost countries IT Enabled services $142 bn by 2008 Growth in Europe : Italy, Germany, Scandinavia Far East : Korea, Japan
9 International demand: Categories of products and services Software products : virus checking, entertainment, consumer electronics Software services : body shopping, bug fixing, testing, coding, applications, design Information processing services : data processing, medical & legal transcription, Business process outsourcing : accounting, call centres, insurance claims, architectural blueprints, financial analysis, airline reservations
10 Linkages, risk and trust Political, economic, legislative, cultural Mitigation strategies: Diaspora linkages : China example Trade associations : Nasscom, Fort Ross Diplomatic engagement : Iran WTO : China, Iran Certification CMM, PCMM, ISO :India, China Overseas presence : Ireland
11 National software vision Extent of government intervention? Government led : Ireland Industry led : India, Russia Products or services? Succeeding strategies Strategy making process: top down or bottom up? Iran, Jordan Geographical focus : India Need for long-term perspective
12 National software related infrastructure Technology A broader view of infrastructure - Iran Compatibility of standards - India People: English language, language training Creating networks:ap, India Cultural traits: Iran, Russia
13 National software related infrastructure Finance and R&D Incubators Israel Diaspora funds China Proactivity Israel Listing on NASDAQ, NYSE etc
14 National software industry Collaborations Foreign partnerships Iran Public-Private AP, India Overseas marketing India Industry associations NASSCOM, Fort Ross City hubs Bangalore, Cork, Dublin, St. Petersburg, Tehran, Tel Aviv
15 The Iran Example Key Strategic question: How does Iran adequately meet its domestic demand, while simultaneously becoming globally competitive?
16 Addressing the question Multi-level approach Policy level: developing profile of supply and demand, enabling conditions Industry level: trade associations, firms, production and marketing domestic and international International level expatriates, FDIs, marketing
17 New entrant strategies: some points of reflection for Argentina Clear understanding of objectives and how to account for the pessimistic arguments? What is the portfolio of products versus services? How to walk on two legs: domestic orientation versus exports? Identifying areas of technological expertise? What should be the geographical focus? How to create enabling networks of people, infrastructure, markets, technology, funding? How to institute an appropriate strategy making process?
18 Further reading Sundeep Sahay Brian Nicholson les1.man.ac.uk/accounting/staff/academic/b_nicholson.htm
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