Economic Development as a Learning Process

Economic Development as a Learning Process

Variation Across Sectoral Systems

Edited by Franco Malerba and Richard R. Nelson

Until recently, economists studying economic development have tended to consider it a universal process, or focussed their attention on common aspects. This book originates from the growing recognition of significant sectoral differences in economic development and examines the catching-up process in five different economic sectors: pharmaceuticals, telecommunications equipment, semiconductors, software, and agro-food industries. Each of these sector studies explore the learning and catch-up processes in various developing countries, in order to identify both the common features, and those which differ significantly across sectors and nations. The authors pay particular attention to China, India, Brazil, Korea and Taiwan.

Chapter 3: The Global Computer Software Sector

Jorge Niosi, Suma Athreye and Ted Tschang

Subjects: development studies, development economics, economics and finance, development economics, economics of innovation, evolutionary economics, innovation and technology, economics of innovation


Jorge Niosi, Suma Athreye and Ted Tschang 3.1 OVERVIEW OF THE SECTOR (1950–2007) The computer software and service industry (CSS) is now a global sector with multiple product and service niches. In the United States it is comparable to the automobile industry in terms of employment, sales, value added, or market capitalization. Its core is composed of three related activities: software publishing, computer systems design and services, and data processing services.1 Other related activities are telephone call centres, which may or may not be related to software.2 Companies active in these sectors often include several classes and move from one class to another within their main activity. Of course, publishing packaged software for large markets and designing software for specific clients are much more demanding than entering data or responding to technical telephone calls from clients. 3.1.1 Evolution of the Sector The CCS industry has moved through different stages. The industry was born in the United States, the cradle of the computer, and the CSS sector progressively detached itself from the computer manufacturing industry. The main stages were as follows (Hoch et al., 2000). The first era (1950–59) was the period of the birth of independent programming services: IBM had a virtual monopoly on the sale of mainframes computers, and usually sold programs embedded in their machines. However, large corporations and government departments using mainframes required programs that IBM did not provide. Professional service companies appeared at this time; most of them were based in the US. A...

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