Global networkof innovation

FDI and Offshoring within the ICT Sector

Mustafa ÇağanNovember 2005

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Global networkof innovation

Global networkof innovation

Services have steadily increased their share of global GDP.

Service Economy

If you lose your luggage on British Airways, the techies who track it down are here in India.  If your Dell computer has a problem, the techie who walks you through it is in Bangalore, India's Silicon Valley.  Ernst & Young may be doing your company's tax returns here with Indian accountants. The brain chip for every Nokia cell phone is designed in Bangalore.  Renting a car from Avis online?  It's managed here.

And service economy has no boundary!...

Source: World Development Report 2000/2001

Global networkof innovation

Global networkof innovation

Country Specialization Examples by Niche

Ireland :

• Packaged Applications

• Localization

• Product Development

Russia :

• High-End Software Eng.

Canada :

• Application Development

• BPO

• Contact Centers

Israel :

• High-End Software

• Learning SystemsIndia :• Application Outsourcing• ITO• BPO• Product Development• Contact Centers

Philippines :

• BPO

• Contact Centers

• Animation

• Application Development

China :

• Embedded Software

• Hardware Services

• Localization

• Application Development

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Global networkof innovation

Global networkof innovation

Consists of 7,108 islands off the southeast coast of the Asian mainlandLocation is strategic

“Situated on the crossroads of Asia’s commerce and transportation, it plays a significant role in international affairs. It serves as a bastion of democracy and a convenient and vital link between the two worlds – the East and the West.”

Doing Business in the Philippines” by Price Waterhouse

A Real Success Story: Philippines

“ICT will be our leading sector for economic growth… We expect ICT to be the key to finding our proper niche in the global village in the 21st century.”

-President Gloria Macapagal-Arroyo

2000

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Global networkof innovation

Global networkof innovation

In 2004 they reached export volume of 1.4 B USD in IT Services

Source: Outsource Philippines, CEO forum 2004 (Figures are 2004 Estimates)

40 M USD*

268 M USD*

483 M USD*

Examples of Global

References

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Global networkof innovation

Global networkof innovation Philippines: Levers of the Success Story

Philippine Economic Export Zone (PEZA): Free Trade zones for IT Services Export

Philippine Export-Import Credit Agency (PhilEXIM)

Loan guarantee

Export Credit Insurance

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Technical Education and Skills Development Authority (TESDA)

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Global networkof innovation

Global networkof innovation What about Turkey?

Strategy: Missing long term strategy and also ownership in the Government about ICT

Regulations: Insufficient regulations and incentive mechanism

Technopolice: Limited contribution to the service export

Education: Current education system does not match the need in the market

50 M USD IT Services’ Export

%17,6 young population unemployment rate (Source: DIE 2005)

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Global networkof innovation

Global networkof innovation If we don’t, someone will do!

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Global networkof innovation

Global networkof innovation

Back Up

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Global networkof innovation

Global networkof innovation

%60 Electronic Equipment and Parts...