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The Globalization of the Software Industry: Perspectives and Opportunities for Developed and Developing Countries

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  • Asish Arora
  • Alfonso Gambardella

Abstract

The spectacular growth of the software industry in some non-G7 economies has aroused both interest and concern. This paper addresses two sets of inter-related issues. First, we explore the determinants of these successful stories. We then touch upon the broader question of what lessons, if any, can be drawn from for economic development more generally. Finally, examining the long term implications of offshoring of software, we conclude that it is unlikely to pose a long term threat to American technological leadership. Instead, the U.S. economy will broadly benefit from the growth of new software producing regions. The U.S. technological leadership rests in part upon the continued position of the U.S. as the primary destination for highly trained and skilled scientists and engineers from the world over. Though this is likely to persist for some time the increasing attractiveness of foreign emerging economy destinations is a long-term concern for continued U.S. technological leadership.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10538.

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Date of creation: Jun 2004
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Publication status: published as Ashish Arora, Alfonso Gambardella. "The Globalization of the Software Industry: Perspectives and Opportunities for Developed and Developing Countries," in Adam B. Jaffe, Josh Lerner and Scott Stern, editors, "Innovation Policy and the Economy, Volume 5" The MIT Press (2005)
Handle: RePEc:nbr:nberwo:10538

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  1. Arora, Ashish & Athreye, Suma, 2001. "The Software Industry and India's Economic Development," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Alan Barrett & Philip J. O'Connell, 2000. "Is there a Wage Premium for Returning Irish Migrants?," Papers WP125, Economic and Social Research Institute (ESRI).
  3. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-39, December.
  4. Catherine L. Mann, 2003. "Globalization of IT Services and White Collar Jobs: The Next Wave of Productivity Growth," Policy Briefs PB03-11, Peterson Institute for International Economics.
  5. William Carrington & Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 98/102, International Monetary Fund.
  6. Mariani,Myriam, 1999. "Next to Production or to Technological Clusters? The Economics and Management of R&D Location," Research Memoranda 027, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
  7. Ashish Arora & Surendra K. Bagde, 2010. "Human capital and the Indian software industry," NBER Working Papers 16167, National Bureau of Economic Research, Inc.
  8. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
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