Trends in Offshore Software Development in Japan
Transcript of Trends in Offshore Software Development in Japan
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Trends in Offshore Software
Development in Japan
Senior Researcher, Research Div. CICCSenior Researcher, Research Div. CICCVisiting Researcher, Institute for AsiaVisiting Researcher, Institute for Asia’’s IT Strategy, s IT Strategy,
WasedaWaseda UniversityUniversity
Tomoko AsaiTomoko Asai
May 13, 2008
CICC
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AgendaAgenda
1. CICC Activities
2. Software Industry in Japan
3. Trends in Offshore Development in Japan
4. Status of other countries (China, India, Vietnam, Philippines)
* All the Translation by CICC
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AgendaAgenda
1. CICC Activities
2. Software Industry in Japan
3. Trends in Offshore Development in Japan
4. Status of other countries (China, India, Vietnam, Philippines)
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CICC ActivitiesCICC Activities
Social and Public Information Systems in Asia Asian Forum for Information Technology (AFIT)Registration and dispatching of IT experts
IT standardization trend survey in AsiaTraining on International Standard Development
Training Programs(Invitational, On site, e-Learning)
Dispatch of representatives (Singapore Office)Support to JICA projectsCooperation and collaboration with related organizations
Holding seminars or lectures
Organizing the Asia OSS symposiumCooperation (HDR, Standardization, Localization)Research (Printing environment, Spread of OSS)
Improvement of Asia OSS Infrastructure
International Cooperation in the IT Industry
IT Standardization in Asia
IT Human Resource Development (HRD) in Asia
Other activities
Research on Asia informatization statusIT industry’s trend survey in Asia
(Asia IT Report)
Research and Information Provision
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CICCICC'C'NetworkNetwork of the Organizationsof the Organizations bbased on theased on the AFITAFIT
MalaysiaMAMPU
VietnamMIC, MOST
CambodiaNiDA
JapanMETI
ThailandMICT, NECTEC
KoreaMIC, MOCIE
Lao PDRSTEA
IndonesiaDepkominfo
MyanmarMCF
BangladeshMOI, BSTI
ChinaMII
MongoliaICTA, NITP
PhilippinesCICT, NCC, DTI
Sri LankaICTA
PakistanMoIT
IndiaMIT
NepalHLCIT
SingaporeIDA
Hong KongHKCS
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・MOI:Ministry of Industry ・BSTI:Bangladesh Standards and Testing InstitutionBangladesh
・MIC: Ministry of Information and Communications, ・MOST: Ministry of Schience and TechnologyVietnam
・MICT:Ministry of Information and Communication Technology・NECTEC:National Electronics and Computer Technology Center
Thailand
・ICTA:Information and Communication Technology Agency of Sri Lanka Sri Lanka
・IDA:Infocomm Development Authority of Singapore Singapore
・MoIT:Ministry of Information Technology Pakistan
・HLCIT:High Level Commission on ICT Nepal
・STEA:Science Technology and Environment Agency Lao PDR
・CICT:Commission on ICT ・NCC:National Computer Center ・DTI:Department of Trade and IndustryPhilippines
・MCF:Myanmar Computer Federation Myanmar
・ICTA:ICT Authority of Mongolia ・NITP:National IT Park Mongolia
・MAMPU:Malaysian Administrative Modernization and Management Planning UnitMalaysia
・MIC:Ministry of Information and Communication ・MOCIE:Ministry of Commerce, Industry & Energy Korea
・METI:Ministry of Economy Trade and Industry , CICCJapan
・Depkominfo:Department of Communication and Information Indonesia
・MIT:Ministry of Communication and Information Technology India
・HKCS:Hong Kong Computer SocietyHong Kong
・MII:Ministry of Information IndustryChina
・NiDA:National Information Communication Development AuthorityCambodia
OrganizationsEconomies
CICCICC'C'NetworkNetwork of the Organizationsof the Organizations bbased on theased on the AFITAFIT
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AgendaAgenda
1. CICC Activities
2. Software Industry in Japan
3. Trends in Offshore Development in Japan
4. Status of other countries (China, India, Vietnam, Philippines)
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Changes in Japanese IT Services IndustryChanges in Japanese IT Services Industry
Source:JISA (2008), Original:METI
Structure of Sales and Workers
0
5
10
15
20
1991 1994 1997 2000 2003 2006
Sales(trillion)
0
250
500
750
1,000workers(thousand)
sales workers
after the economic bubble
・Sales:decreased after the economic bubble, turned to growth in 1995. In 2006, 16.7 trillion yen
・Workers:decreased after 1991, turned to growth in 1996. In 2006, 820,000 workers
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IT Services Industry [Sales by Business Type]IT Services Industry [Sales by Business Type]
Sales Structure (2006)
other, 15.4%
facilitymanagemnet, 7.5%
data processingservice, 10.4%
software products,8.5%
other softwaredevelopment, 4.1%
customizedsoftware, 54.1%
・”Customize Software,” + “Software Products”:Sales 2/3
Source:JISA (2008), Original:METI
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IT Services IndustryIT Services Industry [Sales by Customer Business Type][Sales by Customer Business Type]
Sales by Customer Business Type (2006)
2,357.5
996.1
1,095.8
1,160.7
1,295.2
2,779.4
3,232.8
0.0 1,000.0 2,000.0 3,000.0 4,000.0
IT services industry
other services industies
wholesale/retail
Telecoms(excluding IT services industry)
public service
finance/security
manufacturer
(billion)
・Main Customer Business type: ”Manufacturer,” “Finance/security” :3 trillion yen
・IT Services Industry (between main contractors and subcontractors):2 trillion yen
Source:JISA (2008), Original:METI
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World Wide ICT MarketWorld Wide ICT Market
Worldwide ICT market(2006年)
U.S., 36.5%
Europe, 29.7%
Japan, 10.9%
China, 4.5%
Canada, 2.3%
Others, 16.1%
・36% by U.S., 66% by U.S.+ Europe・11% by Japan, mainly domestic trade
Source:JISA (2008)、Original:WITSA Digital Planet2006
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AgendaAgenda
1. CICC Activities
2. Software Industry in Japan
3. Trends in Offshore Development in Japan
4. Status of other countries (China, India, Vietnam, Philippines)
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What is Offshore Development?What is Offshore Development?
Source:JETRO (2008)、Mizuho Industry Focus
Other company Resource
Onshore Outsourcing
OnshoreShared Service
Within Own
company
OutsourcingOutsourcing--TypeTypeOffshoringOffshoring
InIn--househouse--TypeTypeOffshoringOffshoring
Japan(Onshore) Oversea(Offshore)
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Background of Offshore developmentBackground of Offshore development
・Market needs of Low cost & Shorter development period・Expand of Software development size (incl. embedded software)・Shortage of HR in Japan (esp. PM level, about 100000 pax)
-Less popular of Science and Engineer (incl. IT) course at Univ.-Gov & Univ & Company cooperation to develop higher level IT HR
・Software industry and IT HR increase in Asia, CMM qualified
・Deduction of development cost・Securing IT Engineer (esp. middle-PM level)・Quality, Stability, Reliablity are important
Recently…
・Seeking local market (china)・Correspondent to Globalization-Japan’s software export is 1/10 than import (mostly from US)
-US, India embark on system development of Japanese Global companywith “Global Delivery Model”
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LongLong--term Vision of term Vision of OffshoringOffshoring
PastOffshoring by taking advantage of wage difference※Main purpose is Cost reduction
PresentOptimizing the use of overseas resources※Make use of good resources efficiently※Keeping enough quality is challenge
Future
Structuring a global supply chain in the software/service field※Effective use of optimal resource in each region of the world※Using them as the based in the scope of global business system
【China】1st Phase:1994~98 “Beginning” – to find/develop local partner2nd Phase:1999~03 “Expansion” – to expand Lab-type offshoring
3rd Phase:2004~ “Mature” – to expand SI business,
to strength strategic partnership
Source:”Offshore Software Development”Presentation material of Mr. Ezaki, NEC, March2007
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Expansion of Offshore development by each phaseExpansion of Offshore development by each phase
Source:”Risk Management at Offshoreing”Presentation material (Japanese) of Mr. Ezaki, NEC, Aug 2007
・To make sure partner policy and potential ability・Japan side: Outsource precise system with guidance・Partner side: High % of success with top engineer
Trial Phase
6 month-1 year
Phase Feature Period
・Mutual understanding though trial and error・Accumulation of know-how, improve efficiency※Possibility of partnership breakup by error
Trial & ErrorPhase
1-2 year[3-4 offshorecycle is Needed]
・Growth as essential partner for Japan side・Improvement of efficiency, development of
upstream parts※Countermeasure of HR drain and motivation decline
Expansion phase(Lab contract)
2-3 years
・Construction of Best partnership・Development of SI service in that country・Further strategic & upstream alliance
Strategic Cooperation
Phase(capital relation)
4 years above
Expansion
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Flow of Offshore Flow of Offshore develpmentdevelpment
Decide policy of Offshore Make clear of policy, Notify inside the company
Research/decide local partner Mutual understanding by evaluation standard
Trial outsorcing Evaluate level: skill, quality and PJ management
Decide detail policyOutsourcing policy (business area, level),Schedule of HRD
Outsource each projects Mutual understanding of policy
Start/expand Lab contact Full scare cooperation
Lab contact:-Secure HR and location at local partner for certain PJ
-Secures same HR for certain period (need to offshore certain amount continously)
-Regular liason meetingSource:”Risk Management at Offshoreing”
Presentation material (Japanese) of Mr. Ezaki, NEC, Aug 2007
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Offshore Development Market Size Offshore Development Market Size (each survey)(each survey)
Source:IPA (2007)
comparing survey figures on offshore development market
71.3
90.1
67.3
83.6
47.1
206.7
0 50 100 150 200 250
questionnaire
questionnaire + estimate
Nillei Computer
MIC
balance of payments statistics
Gartner
billion yen
・Offshore Development is 47-200 billion yen market according to each survey・The market would be 100 billion yen considering other companies
which were not included on this survey・Making up 6% of total Japanese IT services industry (16 trillion yen)
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Offshore Outsourcing CountriesOffshore Outsourcing Countries
Source:IPA (2007)
[Offshore development transaction value]・61 companies - direct order of offshore development projects (28% of total)50 companies - indirect order (23% of total).
・Offshore sales account for about 4-6% of total Japan IT Services industry[Offshore Outsourcing Countries]・China is in first place, accounts for 68% (48.5 billion yen)・India is in second place, accounts for 20% (14.1 billion yen)・Vietnam grew twice from 2004 to 2006, though sales are only 430 million yen
Offshore development transaction value
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
2002年
2003年
2004年
2006年
(million yen)
China India Philippines Korea Vietnam U.S. Australia Others No response
Offshore Outsourcing Countries
82.3%82.3%82.3%82.3%
3.2%3.2%3.2%3.2%
30.6%30.6%30.6%30.6%
12.9%12.9%12.9%12.9%
4.8%4.8%4.8%4.8%
1.6%1.6%1.6%1.6%
3.2%3.2%3.2%3.2%
1.7%1.7%1.7%1.7%
1.6%1.6%1.6%1.6%
0%0%0%0% 20%20%20%20% 40%40%40%40% 60%60%60%60% 80%80%80%80% 100%100%100%100%
No responseNo responseNo responseNo response
EUEUEUEU
U.S., CanadaU.S., CanadaU.S., CanadaU.S., Canada
SingaporeSingaporeSingaporeSingapore
PhilippinesPhilippinesPhilippinesPhilippines
VietnamVietnamVietnamVietnam
IndiaIndiaIndiaIndia
KoreaKoreaKoreaKorea
ChinaChinaChinaChina
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Offshore Development process by CountryOffshore Development process by Country
Source:IPA (2007)
(注)No. of respondents :China 69、Korea 3、India 21、Vietnam 11、Philippines 3
・Development process differ by countries・China covers from detail design to integration test, while
India handles much upstream development compared with the other countries.
Offshore development structure
0
10
20
30
40
50
60
70
80
90
100
China Korea India Vietnam Philippines
requirement definition basic design detail design
programming unit test join test
integration test technology study/development others
no response
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Trend of Offshoring by Big Japanese IT venders (2006)
---70B(59B)
Total of 7
(1B)
Vietnam(17)-83 2.5 1.2BTIS
(1.1B)
Vietnam(10)585 1.7 1.9BJapan Unisys
(2.2B)
Vietnam(19)180 8 2.5BHitachi Software engineering
(2.6B)
Vietnam(below 2%)Below 2%98 1.4 3B overNTT Data
(10B)
NANAOver9011.0 10~12BNRI
Korea(4)(11.3B)
Vietnam(6)2070 NA13BHitachi
Vietnam(1-2)(9.6B)
Philippines(2-3)20~2570~754~714.4BFujitsu
Vietnam(2)(21.6 B)
Philippines(10)880 8 24 BillionNEC
OhtersIndiaChina(2005 Result)
% by country% of total SIPlan of 2006 Company name
Source: Nikkei Computer(2006/10/23)
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Trend of Offshoring by Big Japanese IT venders
NEC
Fujitsu
Hitachi
NRI
Japan Unisys
TIS
-4,000 people(2007/China)-Chengdu China, Subsidary company in Vietnam, India◇NEC software (Beijing/Jinan), Dalian, Shanghai, Guangzhou, Chengdu,Wuxi◇NEC Solutions Veitnam(06/5)◇NEC HCL System Technologies Limited, Inoda cisty(2005/12)
-3,000(2009/India) ◇Subsidary company of Rapidigm,Inc.(U.S. IT consulting and integration firm) and ZenSar, India
-2,000(2009(double from 2005)/China)◇Fujitsu (Xi'an) System Engineering Co. Ltd., etc.
-1,000(2009/Southeast Asia)
-2,000(2006(up 15% from 2005)/China)-1,500(2006(up 15% from 2005)/India)※In India, mainly software which requires high technical skill◇Hitachi India Pvt.Ltd, Delhi(2006/8)
-3,000(2006(up 10% from 2005)/China)-Similar increase is estimated in 2007
-500(2008/China,Vietnam for each)※Its subsidiary in Vietnam is the software development office ◇USOL Vietnam(2006/6)
-100(2008 (up fivefold from 2005)/Vietnam) ◇Cooperation with FPT-400 (2008 (up fivefold from 2005)/China)
Source:Nikkei Business Daily(2007/1/11) and some materials
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Purpose of Offshore DevelopmentPurpose of Offshore Development
Sources:IPA (2007)
Actual cost reduction effect:About 30%: 34%, About 20%: 24%Very few: 10%
Purpose of Offshore Development
0
10
20
30
40
50
60
70
80
90
100
China Korea India Vietnam Philippinesreducing development cost cutting development time
utilizing highly-skilled overseas personnel securing personnel
developing overseas markets response to business globalizationothers no response
・Overall purpose: “Securing HR”, “Reducing development cost”
・”Utilizing highly-skilled overseas HR” mark High lank in India and Korea・”Developing overseas market” accounts only for 18% in China and Vietnam・”Response to business globalization” is ranked in China, India and Phili
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Challenges in Offshore Development
0
20
40
60
80
100difficulties in quality control
missing the delivery date
difficulties in communication (languages)
different cultures and business practices
difficulties in securing highly-skilled
personnel
increasing personnel cost
problems about information security and
management
concerns about intellectual property
protection
resulting the lack of techniques and
know-how in Japan
exchange risk
political uncertainty
others
China India Vietnam
Challenges in Offshore DevelopmentChallenges in Offshore Development
・”Difficulties in communication (languages)”, “different cultures and business practices” are ranked high.
・Notable concerns about ”increasing personnel cost” (China, India), “intellectual property protection” (China)
Source:IPA (2007)
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Factors to Choose a Country for Offshore Development
・”Communication Skill in Japanese,” is top, followed by “Engineers skill and quality,”
“Price adequacy”,“sales performance with Japanese companies”
Source:IPA (2007)
Factors to Choose a Country for Offshore Development
others
repurtation in the industry of Japan
and the country
distance form Japan
speed to delivery
status of Japanese companies/sales
office in the country
referral from related parties and
business partners
management stability and ability of top
management
CMM/ISO management
sysytem
no response
sales performance with Japanese
companies
price adequacy
engineers skill and quality
communication skill in Japanese
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
1
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Retained technologies, operation fieldsRetained technologies9
Counted results of project evaluations (24 items)
Project evaluation (only forexisting contracted vendors)
8
Levels of contract prices containing such as unit of man-month labor cost, etc.
Price levels7
QCD Levels
Training system, workforce system, Japanese language skills, etc.
Staff members and their skills6
Quality control, progress management, etc.Development processes5
Information security management statusInformation Securities4
ManagementSystem
Rate of sales increase, profit rate, etc.Management Indices3
Positive attitude to the Japanese marketApproaches to Japanese Market2
Qualitative evaluation on corporate manager and managerial staff members
Management stance1CompanyManagement
The existing contracted partners takeprecedence. Information on such asbackground of the company’s establishment
Appropriateness to businesspolicy (Only for new partner)
0
Observing Point for EvaluationEvaluation ItemNo.
Evaluation Standards for Evaluation Standards for
Overseas Overseas PartnersPartners(from(from Japanese side)Japanese side)
・Partners are evaluated comprehensively by each points based on Company Management, Management System (Information security, Development processes) , QCD Levels
Source:”Offshore Software Development”Presentation material of Mr. Ezaki, NEC, March2007
It is important for offshore side to make sure who has powers to decide at Japan side
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Types of Types of OffshoringOffshoring and HR Flowand HR Flow
Japanese Company (SIer)
Local subsidiary Software Company
in Japan
(China, India, Vietnam, Phil)
Order
IndirectOffshore
①Off-shore
②ODC=Lab.type
Local Software Company
③JV
(Local+Japan)
④Local
Japanese subsidiary company
Japanese HR dispatching
Company(hire, procedure to dispatch, pre-training)
Japanese HR dispatching
company
・dispatch IT HR(on-site)・Global recruitment
Local Univ.Experienced HR
Securing HR
BridgeSE
Competitive market of
Securing IT HR
Supply of HR Supply of HR
Securing HR
JapaneseCustomer
Order
・dispatch IT HR(on-site)
Direct Offshore
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Expected Future Offshore Market SizeExpected Future Offshore Market Size
・Offshore development will be 257billion yen market in 2011. Workers 60 thousand.・There is a possibility to account for 1%+ of Japanese overall IT services industry
Source:IPA (2007)
changes in offshore development market and personnel
71.3
90.9
116.7
151.0
256.8
196.4
59,169
45,251
34,783
26,896
20,93516,424
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2006 2007 2008 2009 2010 2011
billion yen
0
10,000
20,000
30,000
40,000
50,000
60,000
person
offshore development market (billion) workers (person)
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AgendaAgenda
1. CICC Activities
2. Software Industry in Japan
3. Trends in Offshore Development in Japan
4. Status of other countries (China, India, Vietnam, Philippines)
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Software Industry Comparison with India, Philippines, Vietnam & Japan (1)
Mainly affiliated firm, SMEs
FPT - only big local player. (1,675 pax)Some are 100-50 pax,
Large-foreign / Filipino conglomerite. Most local -SMEs.
Share of the Top 5 is 40%
Share of the Top 5 is less than 10%
N/A21.8 billion yen
N/A7,92 billion yen*
997.5 billion yen*
Software Market size
N/A90.2 billion yen
N/A1.7 trillion yen*
8.5 trillion yen*
IT market size
IT/Software Industry Size
U.S. 36%, Europe 21%, Japan 21%, Others 22%
38%(2005)
275 billion yen (2005)(18% of total)(47% up vs. 2004)
154 billion yen (2005)
Vietnam
N/A
About 7%
16.7trillion yen*(43% up vs. 2005)
25 trillion yen (2004)
Japan
U.S.40%, Europe 38%, Japan 12%, Others 10%
U.S. 64%, Europe 25%, Japan/Korea 3%, Others 8%
Japan 59%, Europe and U.S. 20%, Asia 14%, others 7%
Destination for export of software
0.5~1.8%About 65% (20% of overall export in India)
About 10% or less
% of Software Export
230 billion yen(2005)(12% of total(280% up vs. 2004)
3.2 trillion yen*(80% of total)(about 30% up vs. 2005)
7.2 trillion yen*(10% of all IT)(23% up vs. 2005)
SoftwareIndustry Size
266.2 billion yen (2003)
5trillion yen* (2006)
71 trillion yen* (2006)
ICT Industry Size
PhilippinesIndiaChinaAspect
(2005, *2006)
Source:CICC
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China Software Industry Size
Source: MII
1,1001,600
2,780
3,900
4,800
38.20%45.50%
73.80%
40.30%
23.00%
0
1,000
2,000
3,000
4,000
5,000
6,000
2002年 2003年 2004年 2005年 2006年
売上
高(億
元)
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
成長
率(%)
□Details51% Software Service & SI40% Software Products9% Software ExportSales
(Chinese RMB) Growth (%)
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Size of Chinese Software company
78
10 12
70
13 17
212
19 21
250
20 27
0
50
100
150
200
250
300
1-5億元 5-10億元 10億元以上
2002年 2003年 2004年 2005年
(Unit: Number of the company)
Source: China Software Industry yearbook 2006
(above 15 B Yen)(7.5-10 B Yen)(1.5-7.5 Billion Yen)
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Software & Service Industry Size in India
1.7 1.9 2.5 2.6 3 3.9 4.8 6
14
2.6 46.2 7.7 9.6
12.817.7
23.6
60
0
10
20
30
40
50
60
70
1999
年
2000
年
2001
年
2002
年
2003
年
2004
年
2005
年
2006
年
2010
年
国内市場 輸出
CAGR 26-27%
CAGR 24-25%
2000-2006 CAGR:
・Domestic Market 18%・Export Market 33%
Unit:Billion USD
出典;NASSCOM
Domestic Market
Export
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Software Industry Comparison with India, Philippines, Vietnam & Japan (2)
Software Companies and Software Parks
Some Software parks are in main cities (Hanoi, Ho Chi Min,Danang etc.)
CMM 3: 1CMM 5: 2CMMI5:1
720
Vietnam
Some Techno parks and Science parks are in local cities
108 companies in 17 PEZA (Philippine Economic Zone Authority)
Government own = 35
Private = 25
They contribute greately to software export.
National level software parks = 11 parks
All = 300+
Software Parks
ISO9001:390CMMI Level5:9
CMM 3: 7CMM 5: 5
CMM/CMMI Level5:73
CMM 3: 200CMM 5: 30*
ISO/CMM
12,0006003,300*※4,000 by BPO
More than
10,000
Software Companies
JapanPhilippinesIndiaChinaAspect
(2005, *2006)
Source:CICC
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Software Industry Comparison with India, Philippines, Vietnam & Japan (3)
Language Skill
IT Human Resources
○ 8,045
△hard to listen
-
183
about 9,000
35thousand*(10thousand/NA)
Vietnam
-
△lowest TOEFL scores
40%
-
7,500人(IT)
340thousand(2005)
Japan
△2,550○5,368◎163tousandJapanese (No. of applicants)
◎fluent American English
◎peculiar accent
○increase studying in U.S.
English
30%5.8%10%(2000)20%(2004)
Rate of college education
86 (univ),643IT polytech,400 IT voc
343389(univ)、550(Softwarepolytech)
No. of ITColleges
80thousand240thousand (IT)
340thousandIT Related College Grads.
160thousand[software 12thousand](software5thousand
/500)
1.3million*[ITES 410thousand](900thousand/27thousand)
450 thousand*(200thousand/120thousand)
No. Of Software engineers(offshore/for Japan,estimated)
PhilippinesIndiaChinaAspect
(2005, *2006)
Source:CICC
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HRD by Company and GovernmentHRD by Company and Government
HRD by Company・India TCS and Infosys: 4 month training for freshman (equal 2 years outside)
-Hitachi dispatch 50 pax for 3-4 month to Infosys for training・China NEU soft, Vietnam FPT soft: establish own university・Japan Meitec:6 month training at own technical school (teamwork/skill/Japanese)→half will dispatch to Japan
Policy by the Government・Each country settle IT HRD policy, increase IT HR number at technical/vocational school, mutual skill standard by International cooperation→Result is… increase too many lower programmer who cannnot get job
Trend of IT area job・Student leave from IT area is happening with time-lag?Singapore→Japan→China→IndiaVery top get job at Finance or US IT company (google, IBM, Microsoft)
・very top Univ. graduate get job in IT area due to low Univ. entryFrom now, what will happen???
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IT Skill StandardIT Skill Standard・Publish IT skill standard ver3(2008.3), correspond to IT test・60% of Big IT company utilize as “standard”
・FE tests in Phil, Vietnam, Thai, Malaysia, Myanmar, Mongolia in Asia
Source;IPA
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Number of IT Engineers of China & India
7 8 1020
404543
52
67
83
106
129
0
20
40
60
80
100
120
140
2000年 2001年 2002年 2003年 2004年 2005年
中国 インド
(Unit:ten thousand)
□Detail of India (2005)・Domestic 360000・IT-ES Export 410000・IT Export 510000
Source:MII,NASSCOM
China India
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(REF) Japanese Language Proficiency Test (JLPT)
No. of Examinees per Country (Total of Level 1 to 4)
82,773
3,837 3,905 966
165,353
70,499
49,571
11,881 8,045 7,1082,9135,8552,7217,273
31,572
55,692
2,5502,8353,7125,368
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
中国
韓国
台湾 タイ
ベトナ
ム
イン
ドネ
シア
イン
ド
シン
ガポ
ール
マレ
ーシ
ア
フィリ
ピン
2003年 2006年
Comparison of 2003 & 2006
Source:JEES
China ThaiChineseTaipei
Korea PhilVietnam India Singapore MalaysiaIndonesia
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Software Industry Comparison with India, Vietnam & Philippines (4)
Large-scale system, Middleware package, Consulting, BPO, Embedded
・Many are CMMI Level 5・High quality IT HR・Global Offshore model・Proficient in English and U.S. and European market oriented.・Japan has become target in recent years・Lots of foreign invest
①Mumbai, Delhi, Bangalore, Hyderabad②Pune ③Gurgaon, Chennai, ④Asian countries including China
India
BPO、CAD-CAM
・AmericanEnglish+ friendly customer support brings rapid growth of call Centres and BPO・Filipinos areflexible, and follow the instructions andrequirements by the customer.・Brain drain to outside
①Manila②Cebu③9 otehr districts
Philippines
・Low cost oflabour, hardworking, low turnover・Relativelyhigh interestto Japan market.・Both gov. and private sectors are eager to Expand Jap.market. ・Shortage of high skill HR
・6 key industries of 11th 5year Plan(30% up annualy, (2010))・Priority Policy for Export・Many Japanese speaking IT HR・Take over of small company・Entrepreneurial・Lack of Security and Intellectual property・Lack of PM
Characteristics
Customized Software, Lower programming
Customized software (Japanese OK), Embedded system
Outsourcing area
①Hochiminh, Hanoi②Danang
①Costal areas(Beijing, Shaghai, Dailian)②Inland areas
Changes of region
VietnamChinaAspect
Source:CICC
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Moving local city for cheaper cost
Dalian
Chendu
Jinam
Beijing
Xian
Shanhai
Manila
CebuDanan
Hanoi
Guangzhou
Suzhou
Chenmai
BKK
HCM
Kolkata
Chennai
Bengalure
Mumbai
Gurgaon
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Software Parks in each country
China11 of national scale, 300+ including small size Picture:Dalian Software Park
VietnamEstablished one after another, mainly in Hanoi and Ho chi minhPicture:e-Town, Ho chi minh
MongoliaTrying to gain offshore outsourcing projectPicture:National Information Technology Park of Mongolia
17 was registered to Philippine Economic Zone AuthorityPicture:Cyber Park, Eastwood
Philippines
・Seek employment・Technology Transfer・Acquisition of Foreign currency→try to invite foreign company
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Location of Software Parks
Dalian
Shanghai
Hangzhou
Nanjing
GuanzhouZhuhai
Chengdu
Xi’an
Changsha
Beijing
Chengdu
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Chronology of China's Software Promotion and Software Parks (Policies)
Software Industry Promotion Action Plan(2002-2005): (No. 47 Document):::: Clear policy is set to prioritize locally developed software in government procurement.
Nov. 2002
Policies for Encouraging the Development of Software Industry
And Integrated Circuit (IC) Industry (No. 18 Document):::: Target
is set to catch up with the developped countries' level by 2010 in the
area of software industry's R&D and production capability
Jun. 2000
Decision made to set China's 3 major software industry hubs, Beijing, Shanghai Pudong, Zhuhai)
1992
Vice Minister Ceng Pei Yan of Ministry of Information Industry proposed policy of establishing software parks.
Early 1990's
State High-Tech Torch PlanPromotion of high-technology industry(disignation of
national high-technology industry development areas)
Aug. 1988
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Software Park Incentives1. National Policy (Applicable to all Software Firms)
Tax Incentives
� 14% of the 17% VAT to be refunded (until 2010)
� 2 years Income Tax Holiday, 50% tax deduction in the 3rd year
� Exemption of Import Tarrif / VAT on imported equipment / technology
� Salary and training expenses of software companies are tax deductible
� 10% lower income tax rate on government accredited China's National Priority Software Enterprises (updated yearly, 172 companies in 2003)
� Other incentive policies addresses: Investment & Loan, Export, Revenue Sharing, Human Resource, others
2. Local Government Incentives / Software Park Incentives :
� Individually different
� Lots of Incentives in each Parks, but importantly, prompt & punctual procedure and reliable management
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� Establishment of branch of in Japan –China, India, Phil, Vietnam, working as a bridge of offshore development.
� Visiting Japan from local city of China, or other countries, to call for investment with priority policy
� Difficult to find the job at programmer level in each country
Recent TrendRecent Trend
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財団法人 国際情報化協力センターCenter of the International Cooperation for Computerization
www.cicc.or.jpasai@net.cicc.or.jp