The survey conducted by UNCTAD and WITSA explored the role of national IT/software associations in supporting local software industry development. It found that the top three barriers to growth were limited access to venture capital, lack of qualified human resources, and lack of government procurement. The greatest growth potential was seen in export markets, vertical industries like banking and healthcare, and the government/defense sector. The survey also identified important policy changes needed across areas like ICT infrastructure, education and skills, public procurement, the business climate, export promotion, access to capital, and promoting innovation.

1. The Software Industry, Innovation and Developing Countries
GLOBAL SURVEY OF IT/SOFTWARE ASSOCIATIONS
June 2012
The UN Conference on Trade and Development (UNCTAD) and the World Information
Technology and Services Alliance (WITSA) conducted a global survey of national IT/Software
Associations to explore their role in supporting local software industry development.
Software capability, in terms of software development and IT services associated with
effective customization, support and use, is regarded as a growing indicator of economic
development. The survey provides an analysis of this aspect of economic growth. The
survey was comprised of four parts: Background information; Information about the
member companies in the software and IT services industry, Information about the
IT/software association, and Policy considerations.
The results of this questionnaire will also feature prominently in the UNCTAD Information
Economy Report (IER) 2012. The most recent edition of the IER is available for free
download at: www.unctad.org/ier2011.
The survey includes data from the following 38 national ICT industry associations,
representing more than 50 percent of the global software market:
• Argentina (CESSI)
• Armenia (UITE)
• Bangladesh (BCS)
• Bermuda (BTD)
• Brazil (Assespro)
• Bulgaria (Basscom)
• Canada (ITAC)
• Chinese Taipei (CISA)
• Colombia (Fedesoft)
• Costa Rica (Camtic)
• Dominican Republic (Dominican Association of Software)
• Ecuador (AESOFT)
• Egypt (EITESAL)
• Finland (The Federation of Finnish Technology Industries)
• Gambia (ITAG)
• Greece (SEPE)
• Haiti (AHTIC)
• India (NASSCOM)
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2. • Jordan (int@j)
• Kosovo (STIKK)
• Malaysia (PIKOM)
• Mexico (Canieti)
• Morocco (APEBI)
• Nigeria (ITAN)
• Republic of Korea (FKII)
• Romania (ATIC)
• Russia (RUSSOFT)
• Singapore (SiTF)
• South Africa
• Thailand (ATCI)
• Trinidad (ICT Society of Trinidad and Tobago (ICTS))
• Turkey
• Ukraine (IT Ukraine)
• United Kingdom (Intellect)
• Uruguay (CUTI)
• USA (TechAmerica)
• Venezuela (CAVEDATOS)
• Vietnam (Vinasa)
In terms of survey results, the top three barriers to growth of the software industry are:
#1 Limited access to venture capital;
#2 lack of qualified human resources; and
#3 lack of government procurement of software and IT services.
General business climate, export markets, IP protection and software piracy ranked lowest
in terms of obstacles to growth.
The greatest growth potential was seen in the export markets (33%), in the vertical
industries, such as banking, mining, health care, etc. (30%), and in the government/defense
sector (22%). The smallest growth potential was seen in the domestic sectors (14%).
We have also compiled a list of the most important policy changes needed to facilitate the
growth and development of the software and IT services industry, as submitted by
members.
ICT infrastructure
• Provide access to affordable communications infrastructure, with acceptable broadband
speeds.
• Modern regulatory framework for the telecommunications sector at large
• Build infrastructure across tier 2/3 cities in the country
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3. Education and skills development
• Develop education programs at the tertiary level for Software and IT Services (2)
• Double the percentage of youth enrolled in scientific and technological careers.
• Develop human resources for the Software and IT Services Industry (2)
• Improve the quality of primary, secondary and tertiary education.
• Promote technical and college education to accelerate the availability of human
resources.
• Support technological education and entrepreneurship
• Increase the level of computer science and ICT skills. In spite of economic uncertainty,
the software and IT services industry is performing strongly and looking to
recruit. However, many companies report difficulties in recruiting potential new
employees with the requisite skills. There has been a decline in the number of students
taking ICT lessons in school and a sharp fall in the number of students taking computing
at A-level and at degree level over the past decade. This is a major issue for our sector
and unless it is addressed, we may be disadvantaged in an increasingly competitive
global economy. Solving this problem requires government and industry partnership and
we are actively involved in a number of campaigns to try and address this.
• Invest in human capital and stimulate PPP for education
Public procurement
• Enhance Government use of software and IT services and encourage e-government
• Increase government procurement opportunities for national companies
• Specify share of ICT (software and maintenance) in Government's public procurement
projects
• Take multistakeholder approach to developing better procurement mechanisms
• Grow the use of local software by government
• Synergize focus on e-governance initiatives across the country
• Implement a true electronic government as an example for to the private sector
• Stimulate efficient development and implementation of e-government
• Increase access of local IT services companies to public tenders to increase experience
Government vision and institutions
• Create a Ministry responsible for the National IT Policies and Strategies
• Make institutional reforms to improve government capabilities and public policy making.
• Time bound and clarity in implementation of different policies in the country
Enhanced ICT use in private sector
• Create incentives for the private sector to invest in IT
• Promote integration of ICT in vertical sectors
• Subsidize ICT use in non IT industry sectors
• Promote the use of local software in SMEs.
• Encourage preference for use of local software in all sectors.
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4. Better business climate in general
• Create a more favorable business climate for domestic entrepreneurs. Markets are often
dominated by the large multinationals./ beneficial environment for business
development/stimulate private sector in general
• Make taxation schemes more competitive/Lower sales taxes
• Execute/More focus on Public Private Partnership Projects
• Clean up the legal environment
• Adopt structured policy support for growth of SMEs and start-ups
• Offer incentives for IT (including IT education)
• De-monopolize the economy
Export promotion
• Export Development/ active assistance/increased support with access to export market
• Support SMEs in accessing international markets
• Implement a normal high tech export support policy
Enhance access to capital
• Facilitate access to venture capital and other financial instruments/ Facilitate more
venture capital
• Promote the interest of international investment funds
• Improve access to finance - One of the biggest barriers to growth for SMEs is having
access to finance to grow. This is not an easy issue to solve and whilst the government
has taken steps to address it, there is still work to be done (by both government and
financial institutions) to get credit flowing and to accelerate the implementation of
various schemes.
Promote innovation and R&D
• Reach 1% of GDP in R&D
• Strengthen the institutional sector of STI, through legal framework update, redesign and
policy
• Enhance protection and enforcement of intellectual property rights (3)
• Enhanced focus on R&D, IP development
• Prioritize innovation and ensure R&D incentives are globally competitive. Governments
must raise the R&D tax credit for SMEs, protect the science and research budgets, and
invest in catapult centers to help businesses commercialize R&D on new and emerging
technologies.
• Globally competitive R&D incentives (for both SMEs and large companies)
Software sector development
• Train and encourage companies to collaborate and find new niche opportunities
• Encourage innovation & commercialization via public policy
• Increase recognition of the IT industry as an innovator and provider of high-value
solutions
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5. • Win-win growth of large, medium and small software firms by building a software
ecosystem
• Favorable legislation and incentives for the software and IT services industry
• Offer more government support to the industry
• Ease taxation on the IT industry
• Increase trust of local clients in domestic IT industry capabilities
• Launch smaller sized projects that local companies can bid for
Other areas
• Address issues of global protectionism through bilateral and multilateral forums
If you have any questions or if you require more information, please contact Anders
Halvorsen at ahalvorsen@witsa.org.
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