The latest Vi videoconference, held April 4, linked three Russian affiliate member universities with UNCTAD’s Diana Korka, for a discussion based on the latest Information Economy Report (IER). IER 2012 contributor, Vi member coordinator, Anna Abramova, of the Moscow State Institute of International Relations (MGIMO), enriched the exchange with her findings on the Russian software market.

“Our work supports the goal of creating an inclusive information society,” Korka told students and lecturers of MGIMO, St. Petersburg State University and St. Petersburg State University of Economics. “Members of society are not equally benefitting from information technologies, potentially accentuating existing social and economic inequalities. The 2012 IER focused on a critical facet of the digital divide: software.”

“Think of software as the ‘brain’ of ICT devices,” Korka said. “It is of relevance to a wide range of economic and social development fields, including health, education and government. To foster an inclusive information society, countries must develop domestic software capabilities.”

Local software developers are best placed to create software applications that meet the demands and needs of their countries, she explained. And as the number of non-English speakers on the Internet increases, the demand for software products and services in other languages expands the domestic and export markets for the sector.

Developing countries, although still lagging behind in software and computer services spending, are increasingly making a go of the software sector, if with differing market orientations. India, for example, tops the exports of software at over USD 35 billion, while Brazil, China and Russia take advantage of their large domestic markets.

According to the IER, the domestic software market in Russia grew by 40 percent between 2008 and 2012, and exports of computer and information services generated USD 1.8 billion in 2011.  

“Russia’s exports are increasing, but most software is being sold domestically,” she said.

Globally, the expansion of local software demand is partly attributed to the increased use of mobile phones.

“In 2011, more smartphones than personal computers were shipped,” Korka said. “Development of mobile applications adapted to local needs, cultures and languages is increasing. The global mobile ‘app’ industry is expected to be worth USD 38 billion by 2014.”

Government action is needed if developing countries are to take advantage of the economic opportunities of the software development sector, however. The IER finds that limited access to venture capital, lack of qualified human resources and government procurement are the top three barriers to the growth of the industry.

The report points to software strategies being put in place by a growing number of developing countries as a step in the right direction, but warns that they should be integrated into broader ICT development plans, and involve the private sector, academia and the software developer community.

The 57 participating students initiated an interesting discussion on various aspects of the topic, including whether Russia’s software industry would benefit from the country’s recent accession to the WTO; prospects for the industry in China, Russia and the European Union; business models for Free and Open Source software; unlicensed software and intellectual property rights; cyber-attacks and online security concerns; and protectionism facing software exports.

For more about the topic, read the Information Economy Report 2012.