The Changing Geography of Software Development

Access to cutting edge technology today is not restricted to a handful of researcher in select labs and universities in the Western Hemisphere, while software development, as element of the vast majority of advanced technologies, is also undergoing a process of major re-location. The geography of early-day software development resembled a medieval map of Europe: a few well-known centers of knowledge where this science has been flourishing and an outside uncharted world which has been of no importance for the core processes shaping the world of software development. Northern and Western Europe, as well as the West Coast of the United States have dominated software industry for decades, before Asia/Pacific, Eastern Europe and Latin America have managed to emerge as serious competitors.

For the sake of truth, it was a natural process of proliferation of knowledge and subsequent skills in IT professionals, and one day the West-based software vendors have realized that the initial spread of technology has evolved into technology-driven economies far beyond the frontiers of Western world, as depicted by numerous authors. India, the Philippines, and China have emerged as major powers in software development while a good number of countries in Central and Eastern Europe, and Latin America are chasing the pack, often providing better services that those offered by the Western software industry. Thus, the Silicon Valley is now more a place that belongs to the history of software development that the sole leading software research and development hub and source of innovation.
Central and Eastern Europe have always boasted world-class educational institutions in the field of natural sciences and mathematics, while India has managed to build and develop such educational facilities remarkably fast, within less than half a century. These institutions helped train and educate generations of software developers who have been eagerly awaiting their chance to have access to Western technologies to demonstrate their abilities and their time has come with the fall of the Iron Curtain.

At present, India is considered the leading provider of outsourced software development services in the world, while local research and development centers are recognized as world-class, attracting numerous foreign companies to outsource their R&D activities to New Delhi, Mumbai, and other IT parks in India. It was the outcome of a well-planned strategy to develop knowledge-based sectors of economy alongside investment in infrastructure required to build facilities able to compete on equal terms with rival software development centers around the world. In a similar fashion, large West European multinationals moved part of or their entire software development operations eastwards, where the newly adopted member-countries of the European Union are able to provide skilled IT labor force at lower cost.

Subsequently, a growing number of innovative companies are based in Asia/Pacific, mainly India and China, and Central Europe and the Baltic states, while once leading West-based software vendors are forced to share know-how with their newly emerged rivals in order to stay competitive themselves. Outsourcing of software development, research and development activities, and IT consultancy services is unavoidable and natural process that is element of a broader economic globalization, thus creating chances for entrepreneurial-minded software developers and governments worldwide.

Many authors agree that this is just the beginning of a process of technology proliferation whose ultimate outcome is hard, if not impossible, to predict. On the other hand, it is quite a safe bet to say that countries like India are set to grab even a larger share in the growing market for software applications, relying on already existing infrastructure and skilled labour force, as well as continuous investment in knowledge-based economy. In fact, the battle for dominating the field of software development is a battle for dominating the future day markets of all kinds. But this is another story.

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