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SZ poised for big software industry
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Liu Fuzhong
THE growing software industry gets a strong boost with the start of a new incentive package for local software businesses. The number of software development companies has risen to over 500, with them playing host for a large resource pool of top software engineers and cutting-edge technology. Over the past few years, Shenzhen has developed a 50-billion-yuan software industry, accounting for almost one-third of the nation's total software sales.
The new growth in the local software industry follows the pattern of the speedy development of the entire nation's software industry. Last year China recorded domestic software sales worth 23 billion yuan, up 30.7 per cent from the previous year. China's Ministry of Information Industry predicts that software sales this year will top 31.5 billion yuan, up 34 per cent from last year. By 2005, China aims that software and information services will generate annual sales revenue of more than 250 billion yuan. The ministry also expects that by 2005 China's software exports will reach US$1-2 billion.
Shenzhen, already well advanced in software development and its deployment, has been given new opportunities by the country's 10th five-year plan, with its focus on information technology that will industrialize the nation. And at the core of the new information technology is software.
Local software firms have already developed strengths in a few application areas including embedded software technology, financial information services, business management software, educational tools, office automation systems and translation programs.
The local software companies have been among the first in China to see themselves as service providers or problem shooters. Taking advantage of the fact that Shenzhen is the site of one of China's two stock exchanges, local software developers created the nation's first electronic trading systems. Their products are intalled in stock exchanges, brokerage firms and the desk-top computers of individual traders. Some companies including Liming Network Company and yestock.com, now part of Legend Group, have come up with an integrated trading platform extending information and trading services to telephones and mobile devices.
Despite the spectacular growth, experts say the local software industry still faces an uphill battle to be able to compete in the international market. According to Li Zhiyuan, vice-chairman of the local software association, with over 200 members, small size and poor management can hinder the growth of local firms.
"Most software firms in Shenzhen are small in size, employing from a dozen to a few hundred people and have rather humble financing. A big research project requires the collaboration of many software engineers and a lot of investment. But those small firms are now busy churning out a few products just to keep alive," Li said in a recent interview.
Government could play a major part in solving the problem. The Shenzhen Municipal Government has recently announced plans to develop a software park and offer companies a very attractive package to come and open software enterprises there. The idea is that a good business environment and start-up support will save companies a lot of money up front and thus allow them to focus upon new products and service development.
Poor management can also be a constraint. "Time is money. All software engineers understand that a delayed release means a lost market. Therefore an efficient management system is essential in software engineering. Yet local firms are not well equipped to deal with management issues." Li said.
Li added that one of the key elements in the success of the Indian software industry is the Indians' early adoption of international management practices. "You have to set a benchmark with the leading level of international management, or you will be left behind."
Fortunately local software firms are beginning to realize the importance of a good management system. Many of them are trying to adopt CMM (Capacity Maturity Model), an international management standard for software engineering.
In another development, Shenzhen's first training school for software engineering that will be open to the public, was recently opened. Many experts point out that it shows that Shenzhen's software development industry has entered the era of a work force composed of differently skilled workers. More and more low-level workers will enter the business while well-educated engineers will be put in the position of leadership, forming a human basis for the mass production of software.
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