National Innovation Strategies in the Global Economy
Edited by Göran Marklund, Nicholas S. Vonortas and Charles W. Wessner
Chapter 3: Globalization and Offshoring of Software
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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