China To Undertake The International Software Outsourcing Technology Spillover Effects Research

With the rapid development of the global economy and the information technology, the mankind has been in an information sociality unreversely. As the core of the information industry, the software industry is the basic and strategic industry of the national economy, it is the important develop and contest area for every country. It is also for China.The software industry developed by self in China for a long time, it grew slowly. After more and more international software enterprises came to China to sale their software products in 1980s, many scholars said that the international enterprises had been the monopolistic position. After undertaking the international software outsourcing had a big success in India, it developed quickly in China in these years.The author collected and analysised over 1000 articles which did research on outsourcing, service outsourcing and software outsourcing. He found more articles focused on the micro enterperises management and macro outsourcer countries, less focused on the outsourcee countries. More focused on the technology overflow of manufacture international transfer, less focused on the technology overflow of service industry, such as software. More used qualitative analysis; less used quantitative study in the fewer articles which involved in the technology overflow in software outsourcing.By the author's opinion, whether it had technology overflow effects or not by undertaking the international software outsourcing in the outsourcee countries, it is a key problem which would be relate to the ability of independent innovation. It will be helpful for the research on the technology overflow effects in service outsourcing. We can't solve the problem if we stepped arguing on the base of quality analisys. So we should do some empirical study that based on the first-hand data from the enterprises. That is the main object of the article. It examines the effect of technology overflow in China international software outsourcing.The article includes six chapters.As the introduction, Chapter 1 outlined the research background, subject and aims as well as basic framework of the thesis.Chapter 2 focused on the background of the international software outsourcing and the analysis of the status quo. The author defines and differentiates the notions of outsourcing, service outsourcing and software outsourcing firstly. He tracks the history of software outsourcing, he finds that software outsourcing has been done for a long time, and has a trendency from on-site outsourcing to offshore outsourcing. He thinks that the development of international software outsourcing is encouraging. The outsourcers concentrate in the developed world such as The US, EU and Japan and the outsourcees are mainly developing countries like India and Ireland.The author reviews the theory background of international software outsourcing and notes that economic globalizing, international work division, national competence, service trade, service development, theories of multi- business, core business and industry clusters lay a solid foundation for the rise and growth of international software outsourcing. He finds out three engines for the robust growth of international software outsourcing. First, competition escalation is the inside reason. Enterprises have to outsource to reduce cost, distract risks and explore new markets. Second, technology progress is the outside force. The rapid dissemination of information technology makes software a tradable product and this helps reduce the trade cost between countries and enhance efficiency. Third, the government attitude is the external propulsion. The policies of outsourcers and outsourcees in the aspects of education, employment and investment attraction promote outsourcing greatly.Chapter 3 included the history of undertaking international software outsourcing in China and the conditions nowadays. The author interviewed 24 high level managers in the outsourcee enterprisens. On the basis of voluminous field study the author discovers four modes of how China undertakes international outsourcing: China-based multinational software R&D center, marketing agencies set up by multinationals, local enterprises engaged in outsourcing businesses only and local R&D-based outsourcees. The author holds that China undertakes international software outsourcing in small volume but at a rapid growth rate, that the outsourcees are relatively small-scaled ones which only make products of low added value and medium quality, which the markets are disproportionately in large cities like Beijing, Shanghai, Dalian and Xi'an.Chapter 4 did the research on the technology overflow in undertaking international software outsourcing in China. It is the key point of the thesis. The author discovers after a survey on 104 Chinese enterprises that Chinese corporation realizes the effect of technology overflow in undertaking international software outsourcing and in doing so promotes its R&D capability. Among the possible paths of technology overflow effect, the demonstration effect by multinationals is most outstanding. Evidence is absent; however, that technology overflow can expand through industry linkage, industry cluster, and work force flow and market improvement.Chapter 5 focused on the strategy how to take up the Chinese ability to undertake the international software outsourcing. The author then analyses five factors that might influence China international software outsourcing, namely, market environment, institution environment, political environment, corporation competence and talents cost. The result shows that macros like market, institution and politics impose a significant impact on competence promotion; institution is the most influential in this regard. Following is market and politics. Micros like corporation competence and talents cost are less contributive. The author wraps up with some practical policy suggestions.As the concluding parts of the thesis, Chapter 6 concluded the analysis before.Because the software outsourcing is a new phenomenon in the international service transfer, there is no more research that focused on it, especially on the technology overflow. So the thesis has some theory value. It also has some practicle value for the industry development; China has the resource advantage and industry basement to undertake the software outsourcing. If the government takes some good measures, it will be helpful for the software industry development.During the research period, the author took note that it is difficult to collect the data of the industry as it developed in a short period; there is not the good statistics method to do it. Although the author tried his best to collect so many materials from the enterprises; it is hard to say that the materials could reflect the fact and trend of the industry. We should do more research on it later.