13 December 2012 | EN
A UN report's failure to showcase software successes among Islamic nations shows the need for greater self-promotion, argues Athar Osama.
A report on the software industry and developing countries by the UN agency that promotes the economic development of low-income nations brings together a wealth of information on and insight about a sector that has created islands of riches and propelled the development of countries such as India, Ireland and Israel.
But the 'Information Economy Report 2012', published by the UN Conference on Trade and Development (UNCTAD) last month (28 November), also has some major omissions.
From the perspective of Organisation of Islamic Cooperation (OIC) member countries, one major oversight is the limited mention of several well-established success stories and emerging players in the software/information and communications technology (ICT) sector within the Islamic world.
Countries such as Egypt, Jordan, Malaysia and Pakistan are doing particularly well. Despite remaining challenges, they compete internationally and deliver jobs and prosperity in their ICT sectors. But the report provides no analytically rigorous justification for why it chose to focus on certain countries over others.
Software success stories
Take Egypt's ICT industry for instance. Both public and private sector ICT industry planners have long sought to position the country as a low-cost destination for Europe [1, 2], just as India has done for the United States.
In doing so, Egypt has built upon its multilingual foreign-educated population and proximity to Europe. In 2011, Egypt was ranked by consultancy A. T. Kearney as the world's fourth best destination for providing outsourcing activities, having come 12th in 2008 and sixth in 2009.  However, as a result of the country's uprising, the situation might change.
The Smart Village office development in Cairo was home to 35,000 software professionals in 2010 and is expected to have 100,000 by 2014. [4, 5, 6]
The Maadi Contact Center Park, also in Cairo, is designed to host 50,000 call centre workers. Prior to the Arab Spring that began two years ago, Egyptian software exports were projected to hit US$2 billion in 2013 and US$10 billion by 2020.  These totals may have to be revised upwards.
Malaysia offers another interesting example of an ICT industry that may be domestically focused but also delivers significant export revenues. This nation is among the best connected in the Islamic World [8, 9]. Its ambitious Multimedia Super Corridor (MSC) Project was launched in 1994 to try to create an information technology cluster based around Cyberjaya, a cybercity near Kuala Lumpur.
As a reflection of its deep integration and penetration in domestic life, ICT contributed about 9.8 per cent to Malaysian GDP in 2009 . Malaysian companies also exported US$2.3 billion-worth of software and related services in 2009 .
Other countries such as Iran, Jordan, Pakistan and Turkey may not be far behind in gaining significant benefits from the sector.
The role of government
The report also pays considerable attention to governments' roles as drivers of the software industry in developing countries. It introduces the model of a 'national software system' that puts government at the centre of software competitiveness.
While governments can be important players, and enlightened governments can certainly help, the above argument undermines the idea that it is the private sector — particularly small and medium-sized enterprises and entrepreneurial firms — that drives real competitiveness.
It is often said that the biggest thing the Indian government did for its country's software success was simply to get out of the way. While this is a caricature, it does capture the essence of the challenge in the developing world, where governments often fail to deliver.
While the report also highlights the importance to development of creating software industries and emphasises the need for a mix of domestic consumption and exports, it does not address deep and ingrained cultural, psychological and policy biases against domestic software production and consumption in many countries around the world. In a number of nations, including Pakistan, tax incentives are focused on software exports, thus discouraging companies from producing software for domestic use.
On the whole, the report presents some interesting ideas and raises some crucial questions. But it falls short of addressing the deeper issues and challenges — many of them widely prevalent in the Islamic World — that undermine the true potential of software industries in OIC member countries.
Software export success is a tricky business that depends on perception as well as reality. So the report's failure to highlight OIC countries with well-established and emerging software industry capabilities will hinder efforts to alter out-of-date perceptions and enhance their export competitiveness.
This article has been produced by SciDev.Net's Middle East & North Africa desk.
Link to the report [3.56MB]
Athar Osama is a science and innovation policy consultant and advisor. He is the CEO of Technomics International Ltd, a UK-based international technology policy consulting firm, and founder of Muslim-Science.com and the Pakistan Innovation Foundation.
 Bright Creations (2011)
 Why Outsource to Egypt? (Information Technology Industry Development Agency, 2010)
 Offshoring Opportunities Amid Economic Turbulence (The A.T. Kearney Global Services Location Index, 2011)
 Smart Villages Egypt (2012)
 ElKady, Yasser. Benefits of outsourcing in Egypt (Information Technology Industry Development Agency, 2012)
 Why Egypt? On Location (Information Technology Industry Development Agency, 2010)
 The Report: Emerging Egypt 2008 [646kB] (Oxford Business Group, 2008)
 The Networked Readiness Index 2012 [49kB] (World Economic Forum, 2012)
 DHL Global Connectedness Index 2012 (DHL, 2012)
 Malaysian Science & Technology Indicators 2010 (Ministry of Science, Technology and Innovation, Malaysia, 2010)
 MSC Malaysia Industry Report 2009 [5.5MB](Multimedia Development Corporation, 2010)
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