china’s software industry planning to win how ireland can be china’s ally
TRANSCRIPT
China’s Software Industry
Planning to Win
How Ireland can be China’s Ally
Market Background
Darach McEvoy
Director, Cornerstone
Europe + USA = 73.5% ofWorld IT Market 2004
Ireland at Center of 73.5% of World IT Market
IRELAND
China software exports to grow 44% p.a.
0
500
1000
1500
2000
2500
2003 2004 2005 2006 2007 2008
Ireland the World’s No 1 Software Exporter (2002)(OECD/Eurostat 2004)
Exports
US$ Billions
As % of All Exports
% of GDP
Ireland 10,377 9.1 8.5
USA 6,930 0.7 0.1
Germany 5,162 0.7 0.3
Great Britain 4,463 1.1 0.3
Spain 2,483 1.3 0.4
All OECD 42,200 0.7 0.2
All EU 30,646 1.0 0.3
Where does USA outsource software?
(Source: IDC)
1) India
2) Canada
3) Ireland
4) China
China must be better than India
• Technical ability
• Project management ability
• Software quality
• Software development speed
• English language ability
• Technical negotiation skills
Ireland can be China’s Partner
• Only 4 million people• 1.5% Chinese!• English speaking• No natural resources except people• Minimal bureaucracy• Highly supportive Government• Ranked as No.1 Most Global country for last
3 years (AT Kearney)
China – Ireland Political Relations
• High level of political and government co-operation
• Irish Government has an “Asia Strategy” to develop co-operation with China
• Visit by Premier Wen Jiabao in May 2004 the latest official visit by both sides
Overcome the Problems
• Geographic distance
• Time zone distance (also an advantage)
• Language
• Culture
• Business understanding
• Methodologies
25 Different Languages in EuropeOnly 14% Use English
Ireland is English Speaking• Population 458
million• Ireland is the
main localisation centre for Europe
• China and Ireland can work together
Ireland - Business Position
• Government 100% pro-business
• Stable government and politics
• Low business profit tax of 12.5%
• Access to venture capital
• Access to R&D funds
Major Tax Advantages
• 12.5% tax on profits
• 32.5% tax credit for R&D
• Special tax advantages for operating a HQ
• No tax on selling subsidiary company
• No tax on patents, licences, etc.
Ireland’s Position in IT industry
• Bridge for US firms for Europe• Knowledge based economy• Media Lab Europe - European Partner
of famous MIT Media Lab in Massachusetts
• Government strategy to support– R&D– Sales and marketing
Ireland got almost half the FDI of China in 2002! (UNCTAD/WIR/Overview 2003)
Ireland is a safe location• Highly regarded member of EU• Politically and financially very stable• Close relations with USA
– Family relations– Good political relations– US Immigration in Ireland’s airports – only country
in Europe– American Arbitration Association has branch in
Ireland
Ireland – Closer than China even to West Coast USA
From…
To…
Beijing Dublin
Los Angeles 10,080 km 8,300 km
New York 11,000 km 5,100 km
London 8,145 km 400 km
Advantages of Using Ireland
• Local face – customers like it
• Close to the market
• Opportunities for partnerships
• Tax advantages
Share the Cost - Incubator Center
• Dedicated office
• Serviced offices (16 locations in Ireland)
China must GIVE and TAKE
• 3.4 million US jobs to move offshore by 2015
• Politically sensitive
• Backlash already against India
• Therefore create goodwill
• Bring new jobs to Europe and USA
• Co-operate in R&D
Opportunities for Chinese Firms
• Partner for US and European firms in China– Localisation– Sales and support
• Software development centers
• R&D centers
Asia Trade Forum
• Irish Exporters Association will support Ireland-China software initiative
• Cornerstone can provide the premises and services to help
Next steps
• Training and certification
• Business relationships
• Exchanges
• R&D relationships
• Incubator centre in Ireland
Training & Certification
Kraken Yu
Director, Cornerstone
Member of the Council of the Asia Trade Forum
Extreme Programming
Agent Oriented Software Engineering
World ICT Value 2004