Software Exports and Developing
Countries : Implications for
Argentina
Dr Brian Nicholson University of
Dr Brian Nicholson University of
Manchester, UK
Manchester, UK
Professor Sundeep Sahay University
Professor Sundeep Sahay University
of Oslo, Norway
Agenda
Our background
Our background
Global marketplace for software and
Global marketplace for software and
information services
information services
The software export success model (SESM)
The software export success model (SESM)
Empirical experience with SESM
Empirical experience with SESM
Background: Research Program
Ongoing since 1996 - programme of research :Ongoing since 1996 - programme of research :
software development outsourcing to India from
software development outsourcing to India from
USA, Canada, UK, Japan, Korea, Singapore
USA, Canada, UK, Japan, Korea, Singapore
Small companies (with Erran Carmel)Small companies (with Erran Carmel)
Norway - Russia software developmentNorway - Russia software development
Germany-India relationshipGermany-India relationship
Business process outsourcing: accounting servicesBusiness process outsourcing: accounting services
Software export success and developing countriesSoftware export success and developing countries
(with Richard Heeks): Iran
An optimistic viewpoint
India : 7% of GDP, $ 57 bn. By 2008India : 7% of GDP, $ 57 bn. By 2008
Part of network societyPart of network society
Trickle down effectsTrickle down effects
Better employment conditionsBetter employment conditions
Knowledge workKnowledge work
Modernisation, socio economic developmentModernisation, socio economic development
Global markets, funding, know howGlobal markets, funding, know how
A pessimistic viewpoint
Anti globalisation movementAnti globalisation movement
Work related:Work related: “digital sweatshops” - footloose, “digital sweatshops” - footloose,
deskilled, temporary, gender & age discrimination,
deskilled, temporary, gender & age discrimination,
international division of labour
international division of labour
Ethical concerns:Ethical concerns: race to the bottom, race to the bottom,
managerialism, tax avoidance
managerialism, tax avoidance
Societal related:Societal related: “Mcdonaldization” – destruction “Mcdonaldization” – destruction
of local culture and tradition, benefits an elite, no
of local culture and tradition, benefits an elite, no
evidence of poverty alleviation
evidence of poverty alleviation
Industry relatedIndustry related: weakens domestic industry, loss: weakens domestic industry, loss
of jobs in outsourcing country
of jobs in outsourcing country
Background to SESM
Frameworks and previous literature on softwareFrameworks and previous literature on software
export success
export success
First tier suppliers : 3I’s India, Israel and IrelandFirst tier suppliers : 3I’s India, Israel and Ireland
Second Tier : Russia, Philippines and ChinaSecond Tier : Russia, Philippines and China
New aspirant countries: South Africa, Costa Rica,New aspirant countries: South Africa, Costa Rica,
Ukraine, Mexico, Argentina, Mauritius,
Ukraine, Mexico, Argentina, Mauritius,
Bangladesh, Pakistan, Iran
Bangladesh, Pakistan, Iran
T h e S o ftw a r e E x p o r t S u c c e s s M o d e l I n te r n a tio n a l M a r k e t D e m a n d fo r S o ftw a r e I n te r n a tio n a l L in k a g e s T r u s t N a tio n a l S o ftw a r e I n d u s tr y
C lu s te rs (C o m p e titio n ) C o lla b o ra tio n
N a tio n a l S o ftw a r e -R e la te d I n fr a s tr u c tu r e P e o p le T e c h n o lo g y F in a n c e R & D O th e r N a tio n a l S o ftw a r e V is io n /S tr a te g y G o v e rn m e n t In d u s try
International demand:
geographical perspective
Sustained USA demand for offshore outsourcingSustained USA demand for offshore outsourcing
despite downturn
despite downturn
India 2000-01 US$6 bnIndia 2000-01 US$6 bn
Forrester estimates doubling of global offshoreForrester estimates doubling of global offshore
software outsourcing by 2004, 3.3 mn. white
software outsourcing by 2004, 3.3 mn. white
collar jobs & $ 136 bn. in wages will move out
collar jobs & $ 136 bn. in wages will move out
of the US to low cost countries
of the US to low cost countries
IT Enabled services $142 bn by 2008IT Enabled services $142 bn by 2008
Growth in Europe : Italy, Germany,Growth in Europe : Italy, Germany,
Scandinavia
Scandinavia
International demand: Categories
of products and services
Software products : virus checking, entertainment,Software products : virus checking, entertainment,
consumer electronics
consumer electronics
Software services : body shopping, bug fixing,Software services : body shopping, bug fixing,
testing, coding, applications, design
testing, coding, applications, design
Information processing services : data processing,Information processing services : data processing,
medical & legal transcription,
medical & legal transcription,
Business process outsourcing : accounting, callBusiness process outsourcing : accounting, call
centres, insurance claims, architectural blueprints,
centres, insurance claims, architectural blueprints,
financial analysis, airline reservations
Linkages, risk and trust
Political, economic, legislative, culturalPolitical, economic, legislative, cultural
Mitigation strategies:Mitigation strategies:
Diaspora linkages : China exampleDiaspora linkages : China example
Trade associations : Nasscom, Fort RossTrade associations : Nasscom, Fort Ross
Diplomatic engagement : IranDiplomatic engagement : Iran
WTO : China, IranWTO : China, Iran
Certification CMM, PCMM, ISO :India, ChinaCertification CMM, PCMM, ISO :India, China
National software vision
Extent of government intervention?Extent of government intervention?
Government led : IrelandGovernment led : Ireland
Industry led : India, RussiaIndustry led : India, Russia
Products or services?Products or services?
Succeeding strategiesSucceeding strategies
Strategy making process: top down or bottom up?Strategy making process: top down or bottom up?
Iran, Jordan
Iran, Jordan
Geographical focus : IndiaGeographical focus : India
National software related
infrastructure
Technology
Technology
A broader view of infrastructure - Iran
A broader view of infrastructure - Iran
Compatibility of standards - India
Compatibility of standards - India
People:
People:
English language, language training
English language, language training
Creating networks:AP, India
Creating networks:AP, India
National software related
infrastructure
Finance and R&D
Finance and R&D
Incubators – Israel
Incubators – Israel
Diaspora funds – China
Diaspora funds – China
Proactivity – Israel
Proactivity – Israel
National software industry
Collaborations
Collaborations
Foreign partnerships – Iran
Foreign partnerships – Iran
Public-Private – AP, India
Public-Private – AP, India
Overseas marketing – India
Overseas marketing – India
Industry associations – NASSCOM, Fort
Industry associations – NASSCOM, Fort
Ross
Ross
City hubs – Bangalore, Cork, Dublin, St.
City hubs – Bangalore, Cork, Dublin, St.
Petersburg, Tehran, Tel Aviv
The Iran Example
Key Strategic question:
Key Strategic question:
How does Iran adequately meet its
How does Iran adequately meet its
domestic demand, while simultaneously
domestic demand, while simultaneously
becoming globally competitive?
Addressing the question
Multi-level approach
Multi-level approach
Policy level: developing profile of supply
Policy level: developing profile of supply
and demand, enabling conditions
and demand, enabling conditions
Industry level: trade associations, firms,
Industry level: trade associations, firms,
production and marketing – domestic and
production and marketing – domestic and
international
international
International level – expatriates, FDIs,
International level – expatriates, FDIs,
marketing
New entrant strategies: some
points of reflection for Argentina
Clear understanding of objectives and how toClear understanding of objectives and how to
account for the pessimistic arguments?
account for the pessimistic arguments?
What is the portfolio of products versus services?What is the portfolio of products versus services?
How to walk on two legs: domestic orientationHow to walk on two legs: domestic orientation
versus exports?
versus exports?
Identifying areas of technological expertise?Identifying areas of technological expertise?
What should be the geographical focus?What should be the geographical focus?
How to create enabling networks of people,How to create enabling networks of people,
infrastructure, markets, technology, funding?
infrastructure, markets, technology, funding?
How to institute an appropriate strategy makingHow to institute an appropriate strategy making
process?
Further reading
Sundeep Sahay
Sundeep Sahay
www.ifi.uio.no/~sundeeps
www.ifi.uio.no/~sundeeps
Brian Nicholson
Brian Nicholson
les1.man.ac.uk/accounting/Staff/Academic/B_Nicholson.htm
