Software Export a Nepali dream

By Sudan Jha(KTM POST)


During the past several years, government has implemented a series of information technology acts and bills. IT policy 2002 was implemented with the major aim of exporting software worth Rs 10 billion within the next five years. The policy promises the enforcement of software development and expansion of software export as "legal and policy framework will be adopted for the simplified software export." [Computer policy Software Development (Article 61)]

Time has already come to utilize the unemployed human resources and earn foreign currencies. In this age of the information revolution, where magnetic media is gradually replacing paper media, there are plenty of opportunities in the world market for converting information on paper to magnetic medium usable in computers. Nepal should thus prepare herself to reap benefits from this emerging service industry and strengthen her economy.

Talking about our two neighbors, China sold 5.26 billion Dollars worth of IT products with 30 percent growth over the previous year and India’s turnover of IT industry in 98/99 was 2 billion Dollars and is enjoyed a growth of 23.77 percent. Countries like the Philippines, Thailand, Vietnam are already ahead in this business of IT export. In comparison to its physical size, Singapore has reaped huge profits in the world market.

Our backwardness in this sector can be attributed to lack of necessary law and skilled manpower. Also the dearth of publicity regarding Nepalese software producers has also affected the software business. But there are some Nepalese company who export software to Japan, some European companies, USA, Canada, Denmark and other countries. Since is there is no proper and authentic record of software export, exact export figure is unavailable. However, an unofficial data states that the software export of Nepal amounts to Rs. 150 million per annum. Besides, lack of copyright has shrunk the expansion of the existing companies who mainly focus on developing tailored software. Due to this, there is hardly any company that produces branded products.

While Nepal is aiming for diversification in its exportable items, the software exporters are forced to earn money either through wrongful means by meeting the local demands. Lack of awareness in local buyers is one of the main causes. The software developing companies have to rely on demand for personnel, financial, school and hospital management software, accounting and banking software, software for airlines, hotels, police, power companies, information system, medical colleges etc for their business. On the other hand, no major steps are taken to attract the foreign firms and agencies. Entrepreneurs are lamenting that such helplessness has seriously discouraged the future growth of forward looking software industry.

The word software basically refers to the software-related services in Nepal. However, we have tremendous potentials in IT software such as web page and documentation services. As we do not follow any international standard in software production, software export has still remained a dream. On the other hand, we do not possess a standard quality control mechanism, which has hindered in the export of software in a desirable manner.

Feasibility in Nepal:

Labour cost in Nepal is among the cheapest in the world. Establishing an IT service industry is possible even with a small investment. On the other hand, the training cost for technicians will be cheap. Likewise, the number of companies (countrywide) dependent on IT related services are estimated to exceed 250 and there are 160 such companies in Kathmandu valley alone. And most of these companies are equipped with the latest computers and have LAN system. Similarly, the number of computer graduates in Nepal is increasing annually. Many organizations (public and private) in Nepal have already started data communication facilities through telecommunication lines. These and many other factors provide ample evidence that our IT dream is not far from becoming a reality.

Economy:

Super article. I think the importance of IT for a country like Nepal is much more than has been realized.

(1) The model to copy the west for the economy is flawed. The model says move from being primarily an agricultural country to being primarily an industrial country. That is flawed. Lacks originality. Does not suit Nepal's land-lockedness.

(2) Instead the focus ought to be, move from being primarily an agricultural country to being one where the service sector is supreme:

(a) Expatriates, pump in capital/investments.
(b) Smart, educated folks, chip in . Do the work.
(c) The vast majority: reap the benefits of investments in human capital

(3) Need to elaborate (c). If human capital is supreme, as it is in an IT-intensive culture/country/society/company/economy, then making lavish investments in education and health tops the need to build roads and the like as is the case with the traditional model for economic advancement. As in, can you push the literacy rate from 40 to 90 in two to four years. I am talking of efforts of that magnitude.

P.S. Please post the web address along with an article.

The article emphasizes 'export of software' and not a national economical model; yes, software development is part of the service sector, but no where does it mention Nepal should shift its focus to such industry more than the traditional agricultural one.

Setting that argument aside, this article gives me a false glimpse of what software development means in Nepal. First let's reiterate the known facts: software sales are a mere pocket change compared on a global scale, the industry in Nepal do not follow any Industry Standards, such as ISO-certifications, and government lacks enforcement towards software piracy. Coupled with these set of problems, there are skill shortages as in human resources, and the lack of know-how to make a customized software for foreign nations, notably the G8 nations and Australia (since these make up the highest percentage of potential consumers), which is tied with local culture (i.e. the way business is conducted in each nation, respectively). Moreover, the lack of proper equipments and tools such as high-speed connections in some places make the dream of developing high quality software impossible.

There may be an explanation in the increase in sales (as little as it may be). After the tech downturn in 2000 many small to medium sized software firms have either consolidated or have gone out of business, especially those small businesses in the Russell 2000 (benchmark index in the US for small companies), and not necessarily the mom-and-pop types. One of the major expenses for these firms have been the cost of labor. So, rather than hiring new personnel in the U.S. they have opted to outsource some, if not all, of their software development needs. These companies look towards the laborers who can produce quality software at cheap (not reasonable) prices. And Nepal might have gotten a piece of this pie (but I have my doubts). On the other hand, many cities around the world have been beneficiaries of this, especially Bangalore in India.

The need for high quality software around the world is increasing tremendously at a growth rate of >30% annually. And Nepal can take advantage of this. There is more to be made in this than servicing the software needs of Nepal itself, obviously. When I say high quality software I don’t' mean creating static web pages, what I mean is a finished product that involves the complexity of a software cycle with sound software engineering and built with a team orientation. That is where the real money is. One would be surprised how much sales can be doled out of just doing maintenance on a pre-existing software.

At this point, like many software developers, I am skeptical as to how the government will enact, if any, laws that removes a lot of the bureaucratic hee-haws. Frankly speaking, they should subsidize this sector for a limited time to get it moving. It is well worth the investment. Then, ExPats like myself and the others alike would be much more likely to assist in improving it in the near future.


-Sujan

Sujan:

Again thanks for taking the time. These are informed opinions.

I don't know a whole lot about the facts/fiction of the software industry in Nepal. But the article seems to be pretty informative.

"...no where does it mention Nepal should shift its focus to such industry more than the traditional agricultural one...."

The article does not. I do. I guess I used the article as a springboard.

Your second paragraph is highly informative. There is a list.

"...The need for high quality software around the world is increasing tremendously at a growth rate of 30% annually. And Nepal can take advantage of this...."

Are those today's figures? Cool beans. And this is after the so-called dot com meltdown?

"....At this point, like many software developers, I am skeptical as to how the government will enact, if any, laws that removes a lot of the bureaucratic hee-haws. Frankly speaking, they should subsidize this sector for a limited time to get it moving. It is well worth the investment. Then, ExPats like myself and the others alike would be much more likely to assist in improving it in the near future...."

I doubt subsidizing is an option. But your comment otherwise is hope-inspiring. The political leadership. The bureaucracy. I think you give an app answer to the "brain drain" guff. With IT, I think that debate is kind of moot. The entire globe is a village. I can well imagine an expat with bases at both ends, running a global company, maximizing the plus points at both ends.

You probably want to elaborate on the legislative aspect. What's in place that ought to go? What ought to be put in place?

I am still looking for my 5 billion $$$ to develop Nepal. Can u guys contribute some dough?

thanks

P.S. Coz i am sick of the all the bull shit thats coming out. Peace.

Software engineers need to focus:

1. They know programming very well. But, lack knowledge on
interdisciplinary subjects.

2. Other engineers in nepal know subject matter, in traditional manner.
Same old book. What A knows, Z also knows same thing.

3. Learning after univ. graduation is almost nil among Nepali engineers
working Nepal.

4. Software engineers can not learn other engineering subjects, but,
they can have joint projects. Where?

Last year, I purchased an world famous software in Slope Stability.
It took my US$5,000. (five thousand, don't confuse with 500dollars),
it does not serve my purpose. The contents in the software is
nothing really worth to me, because its made for engineers working
after first univ. degree, i.e. to solve simple problem in Slope Stability.
Then, I was offered by another software company in the same subject
that was free for me, but, again did not serve my purpose. I said to the
supplier that your software is too general good common practicing engineers
who always face common problem. So, now I realize, how peoples make
money? from such useless software selling it in US $ 5,000. Well, these
softwares are very good in pre-and post processing.

Well, it tells me that Nepalis can make softwares if they work in group
and know the problem. "knowing problem in depth" and "knowing answer
in depth" will be the key issue in getting patents by developing a new item
whether its software or any goods. What we need is dedication. We
Nepalis in Nepal see that idiot Devendra Wagle makes millions of rupees
over night, and loss our faith on hard work. ... Sorry, we are back in
corruption ... it does not leave us. What I want to tell here is to
create an environment to pull engineers, professionals from other field
and try to know what problem they face, and give solution via software.
What I see today is, the Live computations using Java Applets, and
charging money for each unit you use. So, that I would not have spent
5,000dollars to buy a software (bad reviews, I read), but, would have
used 1 dollar per computation if I had access to such Java Applets. ..
Java Applets will be next stage money making software biz. where you
hardly allow others to make a copy, because the black box is stored
in your own computer. ..... Nepalis should utlize this kind of possibilities.
Like hotmail, you let your prospectus users learn free let them solve
their problems of small size. and make them addicted, and once they
get projects, they will come back to you and pay you the service charge.
.... But, you need to have patience, should not think of being rich like
Jr. Wagle within year or so.. .. .

HG

Nepal has potential for S/W Industry.

Friends, Nepal has done a lot in last 10 years to grow IT industry. Establishing IT-Policy and creating a separate cabinate position (Ministry of Science and Technology) are few examples. Laying fiber optics cable along the east west highway (and few connecting north south) in next couple of years is going to connect Nepalese IT industry with high speed backbone. Finally IT park development is in full swing in Dhulikhel (contracts has been floated and awarded too)

There are 46 degree colleges offering Bachelors and One with Masters degree program in IT sectors with annual intake of 5,000 students (yes, 5K - there were 100 students just 5 years ago) - you know what is the hot employment in Nepal - Teaching Computer courses (some of my friends are making 1.5/2.0 lakhs/month - no kidding - so some of you if you are laid off in US or other countries take a year off and go back to Nepal, 'Pashupati ko jatra Sidhra Ko Byapaar').

CAN (computer association of Nepal), ITPF (IT Professional Forum), and MOST are all striving to train IT companies to obtain ISO 9000 and CMM Level 3 certification. It costs lots of money to get certification, and this is one area where Expatriate Nepalese can help.

I personally know many Nepalese companies already have ties with German, US, and Japanese companies and they are doing joint venture projects very successfully. And many more are in the works.

Also, UN has recognized the unique partinership between Nepalese Private sector and Government and has shown interest in Development of eGovernance in Nepal and provided some funds in this area.

So, friends just don't sit there and wait for the ripe fruits to be eaten but, try to do something for Nepalese IT growth so that you get the satisfaction.

Sujan and HGjyu, there are porblems in Nepal, and lack of 'Domain Experts' in creating a viable shrink wrap products, but where is it not? Just see you were cheated with $5K? But, my esperience with Nepalese engineers is very positive one, and you can very well train them and get very professional results.

Here are some ideas and what expatriate can do grow IT sectors in Nepal:

1) Get connected with IT sector in Nepals - CAN, ITPF, FNCCI, TU, Kathmandu University and many other institutions and business like Mercantile, PCS, CSE are few pointers

2) If you are experts in establishing standards (ISO, CMM0) you are the experts Nepal needs immediately again CAN and ITPF is the pointers.
http://www.can.org.np/index.htm

3) If you can teach IT courses, you are 'HOT', all the Universities and Colleges are your pointers.

4) If you are enterpreuner, create the business links and rip the benefits. Many computer companies are your pointers CSE, Mercantile, and PCS are to name a few.

5) Overall just get the current information and jump in - potential is tremendous.

Good luck friends and let us do something. IT is our second best hope to develop Nepal, and believe me the Government (knowingly or unknowingly) has recognized this. But, private sector has to keep pushing. It is not perfect yet, but together we can make it perfect.