China’s Software Industry Planning to Win How Ireland can be China’s Ally

Market Background Darach McEvoy Director, Cornerstone

Europe + USA = 73.5% of World IT Market 2004

Ireland at Center of 73.5% of World IT Market IRELAND

China software exports to grow 44% p.a.

Ireland the World’s No 1 Software Exporter (2002) (OECD/Eurostat 2004) Exports US$ Billions As % of All Exports % of GDP Ireland10, USA6, Germany5, Great Britain4, Spain2, All OECD42, All EU30,

Where does USA outsource software? (Source: IDC) 1)India 2)Canada 3)Ireland 4)China

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

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)

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

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

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

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

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.

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

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

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

Ireland – Closer than China even to West Coast USA From… To… BeijingDublin Los Angeles10,080 km8,300 km New York11,000 km5,100 km London8,145 km400 km

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

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

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

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

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

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

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

Extreme Programming

Agent Oriented Software Engineering

World ICT Value 2004