Cases and Policies
Edited by Charlie Karlsson
Chapter 10: The Clustering of Software Consultancy in Oslo: Reason for and Effects of Clustering
10 The clustering of software consultancy in Oslo: reason for and eﬀects of clustering Arne Isaksen 1 The software industry: an emblematic ‘new economy’ sector This chapter deals with one of the emblematic industries of the knowledge economy, the software industry. The software industry is here deﬁned in terms of production of software for sale as stand-alone software and not embodied as applications in other products. The software industry deﬁned in this way has several characteristics to be aware of (Steinmueller, 2004). It is a young industry that has grown very rapidly over the last ten to 15 years. As in many new industries, entry barriers are fairly low. The software industry is, thus, dominated numerically by small enterprises, but a good part of the employment and turnover is found in a small number of very large ﬁrms, often multinationals or their subsidiaries. The importance of large ﬁrms may reﬂect that development costs of packaged software can be very high but, once developed, software can be replicated almost for nothing. Thus production of standardized software solutions has huge economies of scale. As a representative of the knowledge economy, the software industry relies largely on highly educated employees. Software is also an innovative industry, at least in terms of the number of new and altered products it brings to market and in terms of the selfdescription of ﬁrms in the industry in, for example, the EU’s Community Innovation Survey. The high level of innovativeness may partly be...
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