The World Summit of the Information Society has been an excellent opportunity to show the clear objective of Tunisia to become a leading information society in the region. People from the private and public sectors had the chance to exchange ideas and information with international top thinkers and institutes. One important lesson from the summit is that the development of an information society is linked to a strong local IT sector. It is one of the foundations on which a sustainable information society is supported. Therefore, the understanding of the strenghs and weaknesses of IT sector provides insights on how to develop a long-term development plan for Tunisian information society.
This article is divided in two parts. The first part analyses the IT sector from the off-shore point of view, whereas the second part (next edition of this Newsletter) will be devoted to the on-shore perspective.
1) IT off-shore export market: the “Supplier-driven” perspective.
Most of the global off-shore IT boom experienced during the last 10 years is related to the internationalisation of software production. It follows the same pattern observed in the manufacturing industries during the 80s, where cost reduction was the driven force for international production. The “Software factory” phenomenon has allowed IT companies to break down the software value chain and de-locate the software production activities in countries with better cost/value ration than their home countries. The client-related parts of the Software value chain such as software design, marketing/sell and service/maintenance still remain in the home country under the control of the multinational firms’ headquarters.
Software development value chain
The most successful country in taking advantage of this trend has been India. Other IT off-shore markets are Ireland in Europe, Brazil and Chile in South America and the newly industrialized countries of East Asia, including Singapore, Malaysia and Korea. Most of the IT projects de-localised in these countries include some kind of data processing work, source code generation, entry-level programming and web application development.
These countries have been very successful in one main point: attracting big investments from multinationals organisations. The latest United Nations’ report on Foreign Direct Investment shows the seven major factors affecting the decision process to de-localise IT services. It is important to notice that low cost, one of Tunisia’s main selling points, is not consider as critical as local market growth and access to skilled workforce
The other traditional Tunisia’s advantage, geography proximity to EU, in the case of IT has a relative importance since the Internet has removed physical distance as an issue. Today, Internet makes any person a “click” away of any part of the world.. IT is a knowledge-based sector, where people are the most important asset for any IT firm. Therefore, Tunisia’s potential international competitive advantages must be found in its people IT know-how
2) The development of IT competitive advantages
Although in clear expansion, today Tunisia IT service export capability is very limited. In 2000, exports accounted for about 16 MDT, 75% of it coming from one firm. In 2002, less than 10% of the total workforce (510 employees) worked in 47 projects with foreign participation.
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