Message-ID: <2A5CC857023@fs1.ec.man.ac.uk> Date: Wed, 25 Mar 1998 15:34:36 BST From: Dr Richard Heeks <mailto:mzdid10@FS1.EC.MAN.AC.UK> Subject: Flying Software: Is the Information Society heading South? To: mailto:DEVEL-L@AMERICAN.EDU
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.
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
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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: mailto:richard.heeks@man.ac.uk W: http://www.man.ac.uk/idpm/