New fears over exports of software
(ZOU HUILIN)
02/22/2002
Though Shanghai's software exports are on the rise, experts as well as officials worry that this trend may be threatened because of practices of local software companies and the stark economic conditions persisting around the world.Software exports from the city hit US$100 million for 2001, doublle the value for 2000. Nevertheless, there is widespread concern that the bottom in Shanghai's software exports may drop out. Tang Qingfu, vice director of Shanghai Municipal Foreign Economic Relation and Trade Commission, said, "In 2001, software exports accounted for less than 2 per cent of Shanghai's total exports. The proportion of software exports to total exports is extremely low compared with that of the US or India." At a forum held by the commission and Shanghai Informatization Office, Tang pointed out that the problems lie in the incompetence of local software companies in four areas - lack of interest to develop the overseas market, lack of talent, lack of international name brand recognition, lack of innovative products. Shortage of talent At present, most local companies only target the domestic market, and are not willing to become involved with exports. The Software Offshore Business Union of Shanghai (SOBUS) revealed that software exports accounted for less than 9 per cent of the total production value for the industry in the city. One factor hindering companies from entering the export market is a lack of talent in the area of business management. Shanghai Software Industry Association (SSIA) reported Shanghai only has about 200 qualified project managers working in local firms. What's worse is that with more foreign software companies setting up business in the Shanghai area, and the relatively low salaries offered by local firms, many fear an exodus of talent to these foreign owned ventures. Ju Dehua, director of Shanghai Software Quality Consortium under SSIA, said, "Currently, local companies attach little importance to obtaining the quality certifications recognized by foreign companies all over the world." Only 10 local companies gained the certification of ISO9000, and none has passed the approval of CMM (Capability Maturity Model). Insiders refer to the CMM licence as softwares' passport to the US market. Ju added that without those certifications, it is difficult for local companies to establish international reputations even if their products are advanced and of good quality. In addition to the above factors, one critical problem for local enterprises is that they do little to enhance R&D (Research & Development) capability. Statistics from 2000 show local companies introduced 220 software technologies abroad, but only produced 200 products under Chinese company brandnames. The world economic slowdown and global slump in the software market will further challenge local companies. Therefore, a majority of industry insiders are calling for collaboration between the municipality and local enterprises to give the industry a boost. In the coming years, the city's trade commission plans to promote the products of local companies abroad by offering local companies more opportunities to build ties with foreign companies. At the same time, the municipality is negotiating with many CMM certification institutes to lower the cost for local companies. At present, six local companies are ready to apply for CMM certification.
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