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The software industry can contribute to development in a way that simple information technology consumption cannot. Nigeria’s industry is today sliding towards dependence on imported software with little local value-added. Investments in better training and a strategic targeting of local markets could change that however. Countries in all regions are spending vast sums on information technology (IT) but there are few signs in developing countries that this expenditure is generating social and economic benefits. A research project by Obafemi Awolow University in Ife Ife, Nigeria and the University of Kuopio, Finland analyses why this is so and what changes could be made to reverse the trend. Research found that the software industry is very domestic-oriented, with three-quarters of customers being Nigerian firms, and most of the rest Nigeria-based. Personal relationships and connections are very important in retaining and winning business. Despite this concentration, companies are not developing Nigeria-specific software packages, but adapting and adding value to imported products. Only a few are custom-building from scratch, including configurable packages – software built for one customer that can be modified and sold to others. Firms are confident of their abilities to carry out lower skilled tasks, such as programming, installation and training but managerial and higher skilled tasks, such as risk analysis and project planning and management are problematic. The firms do not feel that domestic universities provide their staff or students with adequate skills and training for them to break into these more lucrative and skilled areas, so rely on additional training, sometimes from overseas. A survey of companies that develop, modify and/or implement software showed that: There are more than 100 active firms, mainly in the richer, better-educated south-west of the country. Most firms are private, small (10–50 staff), and most professional staff have at least a first degree. A typical firm has, on average, 36 customers for software development. Customers are from the private sector and the domestic market, mainly buying payroll, accounting and human resources-related software. There is virtually no export market. Work focuses on providing services, such as installation, customisation and training on imported packages. The creation and development of locally written software is increasing though not significantly, compared to the market need and the vast population. Some firms in Nigeria are custom-building software applications, and tailoring packages that can be sold on to multiple customers. This requires and develops a broader set of skills, reduces dependency, and provides greater income. To develop a vibrant and competent local software industry of this type: Firms must target market segments with some degree of protection from imports, such as those that need to be ‘Nigeria specific’ including hotels, transport and manufacturing. Industry should target the public sector – from government ministries to health and utilities – that has this Nigeria specificity inbuilt. Companies need to ensure that their staff have the high-quality training that they need. Universities must improve their training and provide graduates with better and more relevant skills. Source(s): Funded by: Academy of Finland through the INDEHELA_M project, grants no 391, 201397 and 104776 id21 Research Highlight: 17 August 2005
Further Information: Tel:
+340 8037179520 Obafemi Awolow University, Nigeria
Richard Heeks Tel:
+44 (0)161 2752800/2804 Institute for Development Policy and Management, University of Manchester, UK
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