NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Asish Arora, Alfonso Gambardella

NBER Working Paper No. 10538
Issued in June 2004
NBER Program(s):   ITI   PR

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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Document Object Identifier (DOI): 10.3386/w10538

Published: The Globalization of the Software Industry: Perspectives and Opportunities for Developed and Developing Countries, Ashish Arora, Alfonso Gambardella. in Innovation Policy and the Economy, Volume 5, Jaffe, Lerner, and Stern. 2005

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