In part I of this series, we discussed large corporations and engineering firms opening up new and innovative technology centers all over the world. China being one of the prime location for such investments.
China’s Response to Increasing Global Competition in Software Development Outsourcing
Direction of software development outsourcing today has drastically changed from mainly being EU and U.S. to India.
EU and U.S. companies are increasing their focus on China, Eastern Europe, small U.S firms and various other Asian countries to outsource their development work.
Moreover, larger clients are looking at multiple countries and vendors for outsourcing.
More and more clients are also becoming more demanding when it comes to higher-end software development services.
Hence, outsourcing companies (and even national governments) need to increase the training of their workforce in both technical and cross-cultural communication skills to achieve their revenue targets.
The Chinese government has responded to this outsourcing challenge by increasing its support to the growth of R&D in China’s information and software technology.
And aside from establishing ICT infrastructures and universities for software engineering and computer sciences, the Chinese government is also giving outsourcing companies around $650.00 for each graduate they hire for at least a year.
There are also substantial efforts to increase confidence in IP safeguards in China.
Outsourcing companies in collaboration with their international partners have developed effective security and educational measures to prevent IP theft.
Moreover, the Chinese government has also strengthened its Intellectual Property Law to attract more foreign investments in information technology.
Hence, the argument against off-shoring software development work to China due to IP concerns is significantly losing ground.
In conclusion, it seems more evident as the new policies are developed and as more students are primed for engineering, IT and software development, China increasingly shows they they have the resources and political will to rival the economic incentives of other nations competing for offshore software development projects and investments.
Category: Events, Globalization, News, Outsourcing Tips
[...] heavy competition in outsourcing has led to China’s needs to respond to such competition. In part II of this article, we discuss China’s response to increasing Global [...]