Software exports in the city hit US$100 million in 2001, doubling the value in 2000.

Nevertheless, their is widespread concern that the bottom in Shanghai's software exports may drop out.

Tang Qingfu, vice-director of Shanghai Municipal Foreign Economic Relation and Trade Commission, said, "In 2001, software exports accounted for less than 2 percent of Shanghai's total exports. The proportion of software exports to total exports is extremely low compared with that of the US or India."

At a forum held by SMFERT and Shanghai Informatization Office, Tang noted that the problems lie in the incompetence of local software companies in four areas -- lack of interest to develop the overseas market, lack of talent, lack of international name brand recognition, lack of innovative products.

Shortage of talent

At present, most local companies only target the domestic market, and are not willing to become involved with exports.

The Software Offshore Business Union of Shanghai (SOBUS) revealed that software exports accounted for less than 9 percent of the total production value for the industry in the city.

One factor hindering companies from entering the export market is a lack of talent in the area of business management.

Shanghai Software Industry Association (SSIA) reported Shanghai only has about 200 qualified project managers working in local firms.

What's worse is that with more foreign software companies setting up business in the city, and the relatively low salaries offered by local firms, many fear an exodus of talent to these foreign owned ventures.

Ju Dehua, director of Shanghai Software Quality Consortium under SSIA, said, "Currently, local companies attach little importance to obtaining the quality certifications recognized by foreign companies all over the world."

Only 10 local companies gained the certification of ISO9000, and none have passed the approval of CMM (Capability Maturity Model).

Insiders refer to the CMM licence as software' passport to the US market.

Ju added that without those certifications, it is difficult for local companies to establish international reputations even if their products are advanced and of good quality.

Originality urged

In addition to the above factors, one critical problem for local enterprises is that they do little to enhance R&D (Research & Development) capability.

Statistics from 2000 show local companies introduced 220 software technologies abroad, but only produced 200 products under Chinese company brandnames.

The world economic slowdown and global slump in the software market will further challenge local companies.

Therefore, a majority of industry insiders are calling for collaboration between the municipality and local enterprises to give the industry a boost.

Fan Xiping, director of Shanghai Informatization Office, said, the municipality will spare no effort to create a better environment and tailor policies to support local companies.

Wesley Wu, Shanghai Pudong Software Park Co Ltd, one of the national software industry bases under the municipality, added the local government is adjusting its operations to offer the industry better service.

In the coming years, SMFERT plans to promote the products of local companies abroad by offering local companies more opportunities to build ties with foreign companies.

At the same time, the municipality is negotiating with many CMM certification institutes in an aim to lower the cost for local companies.

At present, six local companies are ready to apply for CMM certification.

(China Daily February 21, 2002)