With the permission of Dr. Heeks, this piece has been published as the
Inaugural ViewPoints Column on the International Development Network
(IDN) Web Site at http://www.idn.org/
Please stop be the sight, take a look around and see if you all would
like to be a part of this growing web presence.
Christopher L. Byrne
Director, International Development Network
"Information Resources for Sustainable Development"
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Dr Richard Heeks wrote:
> FLYING SOFTWARE: Is the Information Society heading
> 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
> >>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
> >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.
> 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: [log in to unmask]
> W: http://www.man.ac.uk/idpm/