Software Development Industry in Developing and Emerging Economies: Understanding the Market Opportunities and its Challenges

Morgan Orioha

Labour intensity in developing economies, makes agile working and automation viable alternatives. This creates huge market opportunities for software development businesses.

To successfully tap into the market potential in this sector, certain barriers need to be done away with. The private sector cannot do it alone, there is need for sound and supportive policy from the governments, private sector, and other relevant stakeholders to develop the sector. In order words, respective governments can develop and commit to effective strategies that support the development of software industry in their economies.

According to the United Nation’s Conference on Trade and Development (UNCTAD) report, the potential for software development in developing countries is still untapped. Michael John Norman, whilst looking into Software Industry of South Africa, projected that the demand for software to deliver the required applications for education, health, goods, services, and e-government will increase in the country. South Africa’s software development is not entirely different from its neighbours and could even be said to be one of the bests considering the relatively advanced development in the country than most other African countries. Therefore, there is huge untapped software development market potential in developing economies of Africa and Asia.

No doubt, continuous investments in software development by developing economies would enable them to continuously bridge the digital divide; upskill their labour force and create massive employment for their human capital. To develop the software industry, there must be close collaboration between the various key stakeholders from academia, through industry to governments. Nevertheless, there are challenges to overcome. Amongst these challenges affecting the growth and development of the sector, this article discusses the very few key ones.

In developing the software market, IT skills acquisition and/or transfer are particularly important in these economies. Coding skills must be taught and continuously transferred to the populace, especially, in some of these nations, where it has been found that education does not necessarily equip the graduates with basic and rentable skills for labor market according to World Bank in one of its reports on Nigeria titled SKILLS FOR COMPETITIVENESS AND EMPLOYABILITY. Unfortunately, in many of the developing and emerging economies with recorded high illiteracy rate, that state of literacy reflects both a limited access to education and low-quality education. Clearly, the educational challenge poses a major risk to take off and growth of software development industry in these economies.

There is need to review, re-design and, where appropriate, introduce productive and rewarding curricula with strong emphasis on coding and software development education. Collaboration, partnership and/or, affiliation with known international players in the software development education and business, such as The Coding Institute, could be an effective trade strategy to build and drive improvements in software education and business.

In modern economies driven by IT and automation, impact of skills gap and other macroeconomic challenges to industries, particularly, the IT and Software industry, could be seen in their GDP growth over time. Negative GDP growth inhibits growth of such economies and it also sheds light into gaps in the economy. These include but not limited to gaps in IT skills, poor education, or under-performing educational syllabus, and inadequate (or clear lack of) budgeting for IT and automation in such economies. But the earlier these developing and emerging economies woke up to importance of Software Development and IT to their economic survival the better for them. India is second to the US as leading economies in IT and Software Development today because they have invested heavily in the sector and in their human capital over the years.

There is the challenge of mass emigration of the skilled middle-class from developing economies. This leaves the IT and Software Industry losing significant percentage of the enlightened, educated, and exposed labour force, that could drive its growth, to developed economies. Referring specifically to Nigeria, Bloomberg writer, Tope, stated that, “the exodus in the nation of almost 200 million people is hitting the IT, finance, consumer and health industries particularly hard”. It is clear that for the IT and Software industry to grow, these economies, must devise means of retaining their skilled labour force – perhaps, most importantly, through higher wages, eradication of social vices and crimes such as violence in communities and improved living standards, whilst improving international trade to facilitate the transfer of technology and quality education for agile working.
Software development market can grow in any community and in fact, the sector is suitable for rural development policy advancement by these economies.

Why? Because a software developer can operate from anywhere if the community is conducive for living, and everything needed for profitable business operations such uninterrupted power supply, regular internet service and other basic amenities for living are provided.

The Ministry of International Trade could drive development of international businesses in the software and its related and supportive sub-sectors in these economies. Through well thought policy, and in commitment to its implementation, the ministry could facilitate the linking up of foreign businesses to their local counterparts in support of skills acquisition and transfer, and improvements in ease of doing business in the economy within the Software and IT subsector. Therefore, improving International Trade would amongst many, support the lifting of trade disruptions that may currently be limiting trade in IT and Software Development in these economies.

Similarly, inadequate broadband services are another major challenge to growth of IT and Software industry in developing economies. Therefore, improvement in broadband services will also drive the growth of the sector in developing and emerging economies because regular and unmetered internet service augurs well for IT and Software development and use. Imagine a programmer who be needing internet for research and development and cross platform interaction knowing that the service is always and when ever he/she needs?

Lastly, another major challenge to growth of IT and Software development and its related industries is irregular and unaffordable power supply. When there is regular and affordable power supply, the developer is at rest and can concentrate in the main business of software development and IT service delivery. Therefore, such economies must continue to pursue and continuously reform energy and related governance policies that support the growth, development and use of their abundant energy resources such as Oil and Gas for the optimum growth of their economies, businesses and the good of their populace, through regular and decent power supply and related energy use for improved Business Operations and living standards.

As long as inadequate power supply remains a challenge in these developing and emerging economies, the basic law of economics will always apply in such a way that for any proposed increase or growth in software development, there will always be corresponding increase or growth in demand for regular power (energy) supply.

First published on Vocal Media on May 29, 2020.


The Writer: Morgan Orioha – A Preacher and Management Consultant, is an affiliate marketer and blogger. Please get connected and do business with me on Mobile: +447495668994(WhatsApp), 07574318840 (Mobile); twitter: @MorganOrioha; Facebook: Morgan Kelechukwu Orioha; Instagram: mkorioha.

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