The Innovation Imperative

The Innovation Imperative

National Innovation Strategies in the Global Economy

Edited by Göran Marklund, Nicholas S. Vonortas and Charles W. Wessner

As a result of globalization, strategies for investments in innovation capabilities have gained considerably in importance for businesses, research institutions and policymakers. Public policy has to provide conditions for investments in R & D and innovation that are internationally attractive and effective in stimulating innovation, economic growth and job-creation. This book focuses on the changing roles and challenges of innovation and growth policy, and the strategies and measures that are critical in a globalizing world. It provides guidance for innovation policy strategy formulations and design of innovation policy measures.

Chapter 3:  Globalization and Offshoring of Software

William Aspray, Frank Mayadas and Moshe Y. Vardi

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation, innovation policy

Extract

3. Globalization and offshoring of software William Aspray, Frank Mayadas and Moshe Y. Vardi 3.1 INTRODUCTION1 Computer science and technology (S&T) have been stunningly successful in forging a global market. These tools have enabled the information technology (IT) industry to create innovations that have driven down data and voice communication costs almost to zero; added Web features that provide information to anyone – anywhere, anytime; driven hardware costs so low that this technology is affordable in developing countries; developed standardized curricula and made educational material widely available; and produced agreed upon software standards that enable different machines and systems to interoperate. Globalization has resulted in billions of people joining the world free market, and dozens of countries joining the World Trade Organization (WTO). This trend has produced a world where not only goods, but also labour are tradeable, and can be sent over a wire rather than physically relocated. The Association of Computing Machinery’s (ACM) Job Migration Task Force undertook an in-depth study of software offshoring, including its extent and magnitude, perspectives of key countries and companies, globalization of research activities, risks and exposures and counter-balancing steps underway or contemplated in key countries. The findings of the study, which was published in 2006, point to continuing growth in the IT sector in both developing and developed countries and that, in contrast to media predictions, offshoring is not having an adverse impact on IT employment in developed countries.2 At the same time, the study highlights intensifying...

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