China’s Software Industry Planning to Win

1. China’s Software IndustryPlanning to Win How Ireland can be China’s Ally

2. Market Background Darach McEvoy Director, Cornerstone

3. Europe + USA = 73.5% ofWorld IT Market 2004

4. Ireland at Center of 73.5% of World IT Market IRELAND

5. China software exports to grow 44% p.a.

6. Ireland the World’s No 1 Software Exporter (2002)(OECD/Eurostat 2004)

7. Where does USA outsource software?(Source: IDC) • India • Canada • Ireland • China

8. China must be better than India • Technical ability • Project management ability • Software quality • Software development speed • English language ability • Technical negotiation skills

9. Ireland can be China’s Partner • Only 4 million people • 1.5% Chinese! • English speaking • No natural resources except people • Minimal bureaucracy • Highly supportive Government • Ranked as No.1 Most Global country for last 3 years (AT Kearney)

10. China – Ireland Political Relations • High level of political and government co-operation • Irish Government has an “Asia Strategy” to develop co-operation with China • Visit by Premier Wen Jiabao in May 2004 the latest official visit by both sides

11. Overcome the Problems • Geographic distance • Time zone distance (also an advantage) • Language • Culture • Business understanding • Methodologies

12. 25 Different Languages in EuropeOnly 14% Use EnglishIreland is English Speaking • Population 458 million • Ireland is the main localisation centre for Europe • China and Ireland can work together

13. Ireland - Business Position • Government 100% pro-business • Stable government and politics • Low business profit tax of 12.5% • Access to venture capital • Access to R&D funds

14. Major Tax Advantages • 12.5% tax on profits • 32.5% tax credit for R&D • Special tax advantages for operating a HQ • No tax on selling subsidiary company • No tax on patents, licences, etc.

15. Ireland’s Position in IT industry • Bridge for US firms for Europe • Knowledge based economy • Media Lab Europe - European Partner of famous MIT Media Lab in Massachusetts • Government strategy to support • R&D • Sales and marketing

16. Ireland got almost half the FDI of China in 2002! (UNCTAD/WIR/Overview 2003)

17. Ireland is a safe location • Highly regarded member of EU • Politically and financially very stable • Close relations with USA • Family relations • Good political relations • US Immigration in Ireland’s airports – only country in Europe • American Arbitration Association has branch in Ireland

18. Ireland – Closer than China even to West Coast USA

19. Advantages of Using Ireland • Local face – customers like it • Close to the market • Opportunities for partnerships • Tax advantages

20. Share the Cost - Incubator Center • Dedicated office • Serviced offices (16 locations in Ireland)

21. China must GIVE and TAKE • 3.4 million US jobs to move offshore by 2015 • Politically sensitive • Backlash already against India • Therefore create goodwill • Bring new jobs to Europe and USA • Co-operate in R&D

22. Opportunities for Chinese Firms • Partner for US and European firms in China • Localisation • Sales and support • Software development centers • R&D centers

23. Asia Trade Forum • Irish Exporters Association will support Ireland-China software initiative • Cornerstone can provide the premises and services to help

24. Next steps • Training and certification • Business relationships • Exchanges • R&D relationships • Incubator centre in Ireland

25. Training & Certification Kraken Yu Director, Cornerstone Member of the Council of the Asia Trade Forum

26. Extreme Programming

27. Agent Oriented Software Engineering

29. World ICT Value 2004