ABSTRACT
A number of analyses of the role Third World countries might play in the burgeoning global information industry have alluded to software development as an area with significant growth potential. Whether in response to such analyses or independently, an increasing number of developing countries are seeking to promote the development of their software industries through a variety of policy and institutional measures. This chapter examines the constraints and opportunities facing developing-country software industries. It scrutinizes the assertion that developing countries will have a competitive advantage in software development, in large part because of a presumed labor intensity. The chapter offers some policy guidelines with which governments can help fashion a strategy for this sector's development and suggests ways to promote the growth and economic viability of the software industry in developing countries. The role of governments may be somewhat more limited in helping avoid financial (and other) constraints as a software industry develops.
