Information Technology for Development is the management of information ... Among the most significant of these opportunities is the use of offshore outsourcing.
Offshore Outsourcing Across the Digital Divide Editorial Introduction Information Technology for Development is the management of information technology infrastructures to stimulate economic development. The growth of the Internet has opened up new opportunities for companies in the developed world to work with developing countries. Among the most significant of these opportunities is the use of offshore outsourcing strategies that enable access to skill and expertise located in very different parts of the world. This has meant that world economies are becoming increasingly interdependent. To reflect this trend, the field of Information Technology for Development has moved beyond the issues faced by developing countries alone and has become a global phenomenon. A particular concern is the divide between the people who have access to digital infrastructures and those who do not. A World Bank study found that 90% of the world’s Internet subscribers are in countries whose population is 15% of the global total (Dasgupta, Lall, & Wheeler, 2004). In a study of all 178 nations in the world, the International Telecommunication Union (ITU) came up with a set of metrics called the Digital Access Index (DAI). The DAI is determined by such factors as education, the affordability of Internet access, the proportion of Internet users with high-speed connections, and the availability of bandwidth (Minges, Gray, & Magpantay, 2003). These analyses suggest that internet access is related to per capita income, allowing people in countries where the per capital income is high to have greater network access than people living in countries with low per capita incomes. This digital divide has implications for economic growth and the competitiveness of multinationals that source their services offshore, as well as businesses that provide these information technology (IT) services. The key questions that need to be answered are: What exactly constitutes this digital divide? And how can it be monitored? The Orbicom Institute offers a combined set of indicators (infostate) that include access to information and communication technology (ICT) networks and skills (infodensity) and match these by a measurement of what individuals, businesses, and countries do with the ICTs (info-use). This report by George Sciadas and his team (2004) confirms that the magnitude of the digital divide is considerable but finds that the gap is slowly narrowing. While the digital divide is closing, technologies such as Internet use and cell phones keep the gap wide. A close correlation exists between the infostate indicator and per capita GDP in that for every point increase in infodensity, per capita income increases (Sciadas, 2004). It appears from the results of this study that it is access to information, services, and expertise through access to the network, combined with ICT skills that contribute to economic growth and a decrease in this gap. There is a recognition that, while the gap between digital infrastructures between countries is a real problem facing the world today, the use of IT and the development of related skills Information Technology for Development, Vol. 11 (1) 1–4 (2005) Published online in Wiley InterScience (www.interscience.wiley.com).
C 2005 Wiley Periodicals, Inc.
DOI: 10.1002/itdj.20000
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is also an opportunity for economic growth. As part of this recognition, the World Summit on the Information Society (WSIS) was launched in Geneva in 2003 with the help of the ITU and the United Nations. In the words of Yoshio Utsumi, Secretary-General of ITU and Secretary-General of WSIS, “. . . government leaders and their multi-stakeholder partners gave an impetus to harnessing the tremendous potential of ICTs to help bridge the digital divide and achieve the UN Millennium Development Goals, which include forming partnerships to make ICTs accessible to all by 2015” (Utsumi, 2004). While IT and ICT cannot be seen to alleviate all the problems of developing and developed economies, these technologies can enable asymmetries to be overcome when judiciously implemented to support local needs. Then only can opportunities be reaped such as those for offshore outsourcing—now a global market of $100 billion by some estimates. Of this market, which almost $6 billion is wasted each year because of poorly structured deals (Saran, 2003). Companies wanting to use software and information services from abroad will require countries providing these services to have high-speed network access, communication capabilities, and IT skills. The questions facing business wanting to provide software and information processing services to foreign multinationals include: What capabilities and capacity do they need to provide? How should the services be offered? And, in particular, what techniques, certifications, and/or tools should the service providers have in order to become more competitive in the global market for offshore services? It appears that there are a number of ways in which offshore outsourcing can potentially bridge the digital divide. The papers in this issue address offshore outsourcing and some of the ways in which countries can overcome the digital divide. The papers in this issue report on research that considers government policy, systems design and development methods and telecenters as ways in which the digital divide can be overcome. The first paper in this issue, entitled “Strategy Models for Enabling Offshore Outsourcing: Russian Short-Cycle-Time Software Development,” is by Jan Pries-Heje, Richard Baskerville, and Galina Hansen. The authors suggest that economic factors are driving software development projects onto globally dispersed models, as offshore outsourcing becomes more common. As diffusion of technology is a key aspect of each of these determinants of competitiveness, this paper analyzes the development of strategies for the diffusion of short-cycle-time software development into and within Russia. Short-cycletime development is sometimes called agile development or Internet-speed development and uses a number of techniques to move software quickly into production. These techniques are spreading rapidly among software developers worldwide. The analysis reveals a complex interaction of political, economic, and technical elements enabling and inhibiting the development of knowledge that supports the innovation diffusion necessary for companies to compete for offshore contracts. Stephen Hawk and William McHenry provide a complementary perspective in the second paper of this issue. They investigate case studies of firms and clients and available literature to investigate what Russia has achieved so far. Their paper entitled “The Maturation of the Russian Offshore Software Industry,” provides an analysis based on the Heeks/Nicholson and Carmel models of to investigate bottlenecks and hindrances that have prevented Russia from going further, and how those problems are now being addressed. Hawk and McHenry conclude that there have been important improvements in domestic input factors, infrastructure, and software industry characteristics; some improvements in linkages with customer firms; and relatively little progress in improving national vision and strategy. The industry has achieved a “platform of maturity” from which further growth is now possible.
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Daniel Chudnovsky and Andr´es L´opez coauthor the third paper entitled “The Software and Information Services Sector in Argentina: the Pros and Cons of an Inward-Oriented Development Strategy.” This paper analyzes the evolution, present situation, and prospects for the Argentine Software and Information Services (SIS) sector. Chudnovsky and Lopez conduct a survey of firms in the SIS sector in Argentina and conclude that to be competitive in the SIS sector firms need to work on marketing and management capabilities and that the diffusion of quality certifications. At the same time, Argentina has a relative abundance of well-educated people, a sizeable domestic market, a cultural influence in Spanish-speaking Latin America, and a currency devaluation that has dramatically reduced costs measured in U.S. dollars. Because SIS firms in Argentina have focused primarily on the domestic accountancy and management market, they enjoy advantages derived from the specific requirements of the domestic regulations and their knowledge of the business culture and the needs of their local clients. The domestic environment also poses some obstacles, since firms often have difficulties accessing investment and working capital. The authors provide recommendations for increasing the competitiveness of this sector through public policies and actions aimed at improving the SIS firms’ capabilities. Tony Salvador, John W. Sherry, and Alvaro E. Urrutia coauthor the fourth paper entitled “Less Cyber, More Caf`e Enhancing Existing Small Businesses Across the Digital Divide With ICTs.” The authors propose telecenters and cyber caf`es as a prevalent means of increasing access for the digital have-nots. This paper suggests increasing access through currently existing, local businesses where people already gather and where proprietors already posses business relationships with suppliers and customers. The prevailing emphasis on the “cyber” characteristics of access, e.g., computing and Internet access as it is currently known, are questioned and attempts are made to refocus the conversation by considering computing and access in the context of the “caf`e” or as public life that permits an in situ evolution of relevant access. Following an analysis of the literature and direct ethnographic research in several public places in six countries, the authors offer design perspectives for stimulating innovation in the provision of computing and communications. The Journal’s inaugural View from Practice section features a commentary by James George Chacko entitled “Paradise Lost? Reinstating the Human Development Agenda in ICT Policies and Strategies.” While attention is focused on the WSIS process, Chacko introduces us to an ongoing debate about the role of ICT’s in bringing about economic development. He presents the key findings of a study carried out by UNDP’s Asia-Pacific Development Information Program (APDIP) together with the Human Development Resource Center (HDRC) that examines the relationships between human development and ICT. This view from a United Nations Development Program (UNDP) practitioner provides valuable insight into a key development objective that is seen to drive economic development—to reinstate human development at the heart of ICT deployment initiatives. To conclude, it is my great pleasure to announce that Information Technology for Development is now being published by John Wiley & Sons, Inc., under the leadership of Isabelle Cohen-De Angelis. I am confident that Wiley’s publication efforts will take the Journal to a new level of access and readership. I thank David Hinton, the Dean of the College of Information Science and Technology, and Winnie Callahan, Chief Executive of the Peter Kiewit Institute from the University of Nebraska at Omaha, who continue to support the Journal’s advancement. The Commonwealth Secretariat continues to be committed to supporting and advancing the Journal. Now over 20 years old, the Journal began as an academic journal (1983–1993) when it was published by Oxford University Press and became more practitioner oriented when publication was taken over by IOS Press and
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funding was obtained for it by the International Development Research Center (IDRC) and the Commonwealth Secretariat (1993–2003). The Journal has now attained an acclaimed academic reputation with the publication of quality research. At the same time the Journal is more relevant to practitioners through its publication of practice papers and research that addresses real issues. Sajda Qureshi Editor-in-Chief
REFERENCES Dasgupta, S., Lall, S., & Wheeler, D. (2004). Policy reform, economic growth, and the digital divide: An econometric analysis. Development Research Group, World Bank. Retrieved November 2004 from http://www.econ.worldbank.org/files/1615 wps2567.pdf Minges, M., Gray, V., & Magpantay, E. (2003). World telecommunication development report 2003: Access indicators for the information society. International Telecommunications Union, Geneva, Switzerland. Saran, C. (2003). Gartner advises firms to consider alternative offshore IT locations. Computer Weekly, 5. Sciadas, G. (2004). Monitoring the digital divide . . . and beyond. Canada: Orbicom, International Secretariat. Utsumi, Y. (2004). Call from Secretary-General Yoshio Utsumi. World Summit on the Information Society. Retrieved November 2004 from http://www.itu.int/wsis/funding/campaign.html
