SOFTWARE DEVELOPMENT INDUSTRY and the ICT Sector in the Arab World. Fouad Bajwa. 7 May 2013

Transcription

1 SOFTWARE DEVELOPMENT INDUSTRY and the ICT Sector in the Arab World Fouad Bajwa 7 May 2013 * All United Nations/UNCTAD/ESCWA related information is shared for information and references purposes only and do not represent the views of the UN or it s agencies whatsoever. Focus What is the landscape of software development industry across the Arab World. Data and Indicator Issues Software focus areas Challenges Recommendations 1

2 Software is Everywhere The growing emphasis on ICTs in the delivery of government, healthcare, education and other goods and services demands customized applications. Countries therefore need the capacity to adopt, adapt and develop relevant software. BAN Ki-moon, UN Secretary-General Source: UNCTAD IER2012 Software Sector Opportunities Low capital barriers to entry Generator of employment not least for the skilled youth Source of innovation Source of export revenue Key to sustain productive ICT use in society Source: UNCTAD IER2012 2

3 Developing Countries Spend Little on Software Source: WITSA/IHS Global Insight Inc. India tops software exports from the South Followed by China, Philippines and Singapore Top 20 exporters of computer and information services, 2010 or latest year Middle East and Northern Africa? Source: UNCTAD IER2012 3

4 Market Orientation Differs Asia-Pacific examples: Export-oriented: - Sri Lanka - India - Philippines - Malaysia Domestic salesoriented: - China - Pakistan - Bangladesh - Indonesia - Islamic Rep. Of Iran Growing Demand for Software Social media, online work and cloud computing Broadband enables new forms of software development Use of social media creates demand for new applications o End 2011: 481 million Facebook users; ~75% outside of North America o Mobile version widely used in developing countries Online software freelancing rising fast o Elance: programmers from 150 (!) countries involved o Bangladesh: some 10,000 freelance programmers Cloud computing and Software as a Service (SaaS) o Brazil and China among fastest adopters of cloud computing Source: UNCTAD, Facebook, Elance.com, Capgemini, Forrester, media reports. 4

5 Local Demand for Software is Expanding Mobile applications Expanding use of mobile phones more demand for mobile apps Global mobile app industry in 2011: $15-20 billion, set to rise to $38 billion by 2014 Mobile apps development adapted to local needs, cultures and languages on the rise in developing countries Diverse content: from news and entertainment to patient care and government services apps Source: Various market estimates, ITU, AT Kearney, World Bank. Strong Appetite for Smartphones 5

6 Mobile Opportunity Nearly 22 million smartphone and tablet device users in the Arab Downloading mobile-based software applications (apps) primarily distributed: o Android mobile operating system (40% of market share with 8,800,00 devices) o Apple ios (35% with 7,700,000 devices) o Blackberry at (15% with 3,300,000 devices) o Windows (10% with 2,200,000 devices). Games and Communications lead the app sphere. Internet Access Mobile or Desktops Mobile versus Desktop Usage in the MENA Country % Mobile % Desktop Sudan Libyan Arab Jamahiriya Kuwait Oman Saudi Arabia Bahrain United Arab Emirates Syrian Arab Republic Qatar Yemen Jordan Lebanon Iraq Egypt Source: Pingdom 1 6

7 Social Media Fifteen ESCWA member countries (Facebook did not provide data on Syria and Sudan) where 43,945,000 people with profiles from the region segmented by a gender distribution of 28,494,600 males and 15,169,500 females. The targeted analysis shows that out the total population, 2,349,700 profiles were related to computer programming whereas 8,153,140 were owners of old computers and 604,940 were technology early adopters whereas 1,438,840 were small business owners and 5,473,220 profiles were related to the broader category of Science/Technology with a gender distribution of 4,331,220 males and 2,244,280. 5,473,220 profiles are related to the broad category Gaming (Social/Online) out of which 3,386,200 are men and 2,057,660 are females. The Facebook analysis was conducted on 28/04/2013 using the platforms application programming interface and/or tool for targeted audience population profiling on Social Media 5,473,220 profiles are related to the broad category Gaming (Social/Online) out of which 3,386,200 are men and 2,057,660 are females. The Facebook analysis was conducted on 28/04/2013 using the platforms application programming interface and/or tool for targeted audience population profiling on 7

8 Social Media Middle East and Northern Africa Internet Users, Population and Facebook Statistics ESCWA Population Internet Internet Population Internet Facebook Member (est.) Users in Users in Penetration Users % Users Country Dec/2000 June/2012 % Bahrain 1,248,348 40, , % 1.1 % 345,520 Egypt 83,688, ,000 29,809, % 17.8 % 13,833,980 Iraq 31,129,225 12,500 2,211, % 2.4 % 3,290,840 Jordan 6,508, ,300 2,481, % 2.8 % 2,576,280 Kuwait 2,646, ,000 1,963, % 2.2 % 791,620 Lebanon 4,140, ,000 2,152, % 2.4 % 1,522,960 Libya 5,613,380 10, , % 0.6 % 878,440 Morocco 32,309, ,000 16,477, % 9.8 % 5,384,720 Oman 3,090,150 90,000 2,101, % 2.3 % 479,680 Palestine 2,622,544 35,000 1,512, % 1.7 % 1,097,800 Qatar 1,951,591 30,000 1,682, % 1.9 % 679,680 Saudi Arabia 26,534, ,000 13,000, % 14.4 % 5,353,960 Sudan 34,206,710 30,000 6,499, % 3.9 % n/a Syria 22,530,746 30,000 5,069, % 5.6 % n/a Tunisia 10,732, ,000 4,196, % 2.5 % 3,670,400 United Arab Emirates 8,264, ,000 5,859, % 6.5 % 3,419,340 Yemen 24,771,809 15,000 3,691, % 4.1 % 619,780 Total 301,988,870 2,454, ,079,275 43,945,000 Source: Internet World Stats Usage and Population Statistics 1 1 This table has been adapted from the statistics on Middle East with a selected number of countries from Africa customized to reflect ESCWA member countries. The Facebook population statistics were researched again to reflect the actual status of profile population on 28/04/2013 and a gender distribution was also added to the population numbers for further insight. Social Media Middle East and Northern Africa Facebook Total Users and Gender Distribution ESCWA Facebook Male Female Member Country Users Bahrain 345, , ,420 Egypt 13,833,980 8,816,860 4,930,360 Iraq 3,290,840 2,447, ,700 Jordan 2,576,280 1,500,340 1,068,200 Kuwait 791, , ,620 Lebanon 1,522, , ,360 Libya 878, , ,480 Morocco 5,384,720 3,347,560 2,021,580 Oman 479, , ,160 Palestine 1,097, , ,280 Qatar 679, , ,760 Saudi Arabia 5,353,960 3,851,400 1,490,680 Sudan Syria n/a n/a Tunisia 3,670,400 2,110,240 1,533,860 United Arab Emirates 3,419,340 2,310,360 1,083,560 Yemen 619, , ,660 Est. Total 43,945,000 28,491,980 (65%) 15,223,680 (35%) 8

9 Free and Open Source Software Coming of Age FOSS continue to gain market share in many market segments FOSS offers several advantages to users o Promotion of local learning o Lower costs and more local value creation o Less dependence on proprietary software o National security considerations o Opportunities for local business development ICT growth areas rely on FOSS Policies becoming more FOSS friendly o Among developing regions, Asia is the front-runner Case of Excellence Delivered cited in report Source: UNCTAD, Center for Strategic and International Studies, NetCraft, StatCounter. FOSS Policies Globally Open source policy initiatives, by region Approved Proposed Failed Total Europe Asia Latin America and the Caribbean North America Africa Middle East Source: IER2012 9

10 Linux Training and Certification in Arab Countries ITU and the Linux Professional Institute (LPI) launched an initiative in 2011 to support the roll-out of a Linux certification and training program. For Both organizations, the objective of the programme is to unlock the potential of ICTs to deliver employment opportunities and to empower ICT trainees in their careers. Training and certifications of Linux and other open source software had already been jointly delivered by the two institutions in Afghanistan, the Lao People s Democratic Republic, Occupied Palestinian Territory, Pakistan, Syrian Arab Republic and Yemen. Source: UNCTAD IER2012 Linux Training and Certification in Arab Countries Building on this initial experience, the two organizations joined efforts in March 2012 and put together a comprehensive three-year project to be implemented in the 22 members of the League of Arab States. Establishing more than 130 Linux train-the-trainer centres to develop and strengthen local ICT capacity in human resources. The project has an initial budget of $5.8 million and is expected to reach some 13,200 direct beneficiaries. Source: UNCTAD, based on information provided by ITU and LPI. 10

11 Country FOSS Case - Egypt FOSS case of Egypt, Rizk and El-Kassas (2010) note that there was insignificant FOSS activity in the country. Factors for this underuse involved: o the buyers trust in established proprietary software brands, the equating of price and value of software by the public and private sectors in avoiding low-cost solutions, o the aggressive marketing by large software companies directly to students through universities and building direct relationships with the public sector agencies, o overemphasized educational emphasis on proprietary software systems all contribute to a lesser demand for FOSS skills and lesser jobs in the domain. In order to counter this and change social and market perception, there needs to be support of FOSS by the government. Source citied UNCTAD IER2012 Software Strategies Spreading Software strategies put in place in many countries, e.g., o Bangladesh rapid growth of freelancing o China software production rose from $9 billion to $286 billion in the last decade supported by government policies o India increasing focus on domestic software needs o Malaysia strong emphasis on FOSS o Republic of Korea Software Korea Quantum Jump Strategy o Sri Lanka mainly export oriented Strategies need to be adapted to each case Involve private sector, university and developer community Source: UNCTAD IER

12 Barriers to Software Growth According to national IT/software associations Share (%) of respondents mentioning factor Source: UNCTAD and WITSA Venture Capital Rising but Concentrated 12

13 Main Barriers Main barriers to the growth and development of the software and IT services industry (Share of respondents mentioning factor Barrier Middle East and Africa% Limited capabilities in domestic software/ IT 43 services companies Lack of qualified human resources 43 Limited access to venture capital 86 Weak demand among private enterprises for software and IT services Lack of government procurement of software and IT services Limited demand from export markets 29 Inadequate protection of intellectual property rights 14 High rates of software piracy 29 Unfavourable general business climate 14 Source: UNCTAD WITSA Survey of IT/Software Associations, Note: * Excluding West Asia; ** Latin America and the Caribbean. Based on 38 responses. 1 Expenditures for Software in MENA Allocation of expenditures for software industry in the MENA region Country Percentage of total ICT expenditure Kuwait 1 Reproduced and adapted to reflect only Middle East and 12.3% Northern Africa by author from UNCTAD IER2012 Table V.1. Page Saudi Arabia 11.5% Tunisia 10.5% Jordan 6.2% Egypt 5.3% Morocco 3.4% Source: Adapted from UNCTAD WITSA Survey of IT/Software Associations,

14 Online Work Economy Elance.com IT & Programming Freelancer Earnings $436,767,760 Lifetime Earnings (in USD) Freelancers Growth 2,072,203 Elance.com MENA Stats IT/Software Human Resource Contributing on Elance.com KSA 1,364 Yemen - 69 Oman Jordan Qatar UAE 2882 Kuwait Egypt Tunisia Morroco

15 National Software Systems IER2012 Areas for Policy Intervention Affordable ICT infrastructure especially broadband Availability of skilled workforce Public procurement as strategic tool to create local demand o Make use of FOSS where feasible Foster local software industry capabilities o Business environment o Encourage relevant quality certification o Access to finance Strengthening legal framework o IPRs, e-payment, e-transactions Source: UNCTAD IER

16 IER2012 Conclusions Importance of software capabilities is rising Greater opportunities for engaging in software projects and seizing them requires active involvement by Governments and their partners Strategies should seek to balance exports and domestic sales and leverage partnerships with other stakeholders Goal: to move from passive adopters of foreign technology to developers of relevant local applications Companies in every industry need to assume that a software revolution is coming. Marc Andreessen, Wall Street Journal, 20 August 2011 Conclusions The need to understand and include National Software System strategy by policy makers as and integral part of the ICT industry activities while monitoring the contribution to the national GDPs and the regional software production and consumption. The need to explore Formal and Informal Sector Software Development trends across the MENA region, identifying cases sharing, and learning. Indicators are missing, the need to develop and record Software Industry spend, investments, output through a single online information gateway. Study the missing linkages between Venture Capital/Private Equity, improving market efficiency. 16

17 Conclusions International linkages development, the need to stimulate National Software Trade and Development Associations, participation in global software demand. Promoting knowledge management through cluster development cross regional technical knowledge transfer and sharing of resources. Linking Entrepreneurs and Universities for the development of high quality skilled human resource through dialogue, internships, employment and curriculum development. Using the Online Work Economy potential as an important capacity and skill development vehicle. Conclusion Recognizing the potential of Youth and Gender with reference to the Online Work Economy. The Mobile Opportunity has never been more important and can be used as a strategic intervention across both society and economy. The Social Media Opportunity needs to be researched further. The FOSS contribution will soon represent the technical capacity and software development health of countries. Encourage member states to increase Software Development spend in the Public Sector to stimulate local software development demand and supply. Fact finding missions by ESCWA for ICT sector specific data collection and creation of a regional ICT Data Gateway online. 17

18 A Role for International Partners Capacity-building Training Application development Strengthen legal and regulatory frameworks Create demand by using software expertise in developing countries when developing software applications for their development projects Source: UNCTAD IER2012 The author shared references from an United Nations (UNCTAD) flagship report titled INFORMATION ECONOMY REPORT 2012 that can be downloaded free of charge at 18