Software rising

Dalian wants to become China's most mature and most competitive software hub by 2012, according to a senior official with the city government.

"The (software) strategy is an essential and powerful impetus for our future development," said Dailian Mayor Xia Deren, during the 2008 China International Software and Information Service Fair (CISIS) held there in June.

Dalian, a coastal city in northeast China's Liaoning province, is the host of the country's only State-level software fair. The software sector has boomed and has become one of the city's calling cards in the past 10 years, Xia says.

According to the mayor, the sales revenue of the city's software sector reached 21.5 billion yuan last year, up from less than 200 million yuan in 1998. During the period, the export volume rose from $10 million to $720 million, the number of software companies from 100 to more than 700, and the employees from 3,000 to over 60,000.

"In the past decade, our software sector has kept growing by 68.2 percent annually on average. It is becoming a new pillar industry for Dalian," Xia said.

"We are going to build Dalian into China's Bangalore (a software hub in India)," says Vice-Mayor Dai Yulin.

Though there is still a way to go for the city to catch up with Bangalore and Ireland's Dublin, Dai swears that in 10 years, Dalian will become one of the world's top software hubs.

Going global

More than 200 foreign software companies, including more than 40 Fortune 500 companies, have established businesses in Dalian.

"These companies bring advanced technologies, management ideas and innovation to Dalian," Xia said.

At the same time, the government is encouraging local companies to expand overseas. Some Dalian-based companies like Neusoft, DHC, and hiSoft have taken the cue and broadened their international business and the city gained a competitive advantage as a software export and service outsourcing center.

Dalian Hi-think Computer Technology Co Ltd (DHC) is a pioneer in developing Japan-oriented outsourcing business. It has maintained an annual increase of 25 percent over the past 10 years. Its software export volume ranks No 1 in the nation.

"We will accelerate our overseas expansion. We have set two strategies for that aim: getting listed in the stock market and cooperating with more multinationals," says Liu Jun, president of DHC.

Software park

Since 1998, when Dalian Software Park Co Ltd was inaugurated, it has been run by a "private company with government support". In this model, the government gives guidance and policy support, while the company is in charge of detailed operations such as building offices, attracting investment, marketing and daily management.

"At the beginning, we faced disputes and doubts in adopting a totally new operating model. However it has proven to be an effective system that has made good use of both the government and the company's advantages," said Xia.

"The key to the success of the model is 'government support'. With the government's guidance, and support, we are encouraged to innovate," says Sun Yinhuan, chairman of Yida Group, the developer of Dalian Software Park.

Dalian Software Park is still the only one run by a "private company with government support" among China's top 10 national software parks. But its model is widely recognized as a success. Its operators have been invited by cities such as Wuhan, Suzhou and Tianjin to help operate their software parks.

Talent pool

Talents are crucial to the continuing growth of the software sector and Dalian's strategy cultivates and attracts talented professionals.

The city is home to more than 200 IT training institutions, including six software academies. Since 2005, the city has attracted more than 30,000 IT professionals both from home and abroad.

"The rapid development of Dalian's software industry is mainly because the city grasped the pivotal factor, human resources, and implemented a strong recruiting strategy," says Liu Jiren, founder and chairman of Neusoft Corp, China's largest software outsourcing firm.

Liu still remembers the first shovelful of earth dug for the cornerstone of the Dalian Neusoft Institute of Information, his first cooperation with Dalian.

"Any time when I am asked how to develop a software sector, I warn officials from other cities that they have to be patient enough to wait more than 10 years to cultivate talent training," Liu says.

Dalian has now drawn almost 70,000 professionals working in the city's IT sector while the first pool of 10,000 talents for the city lasted seven years.

"Only a vast reservoir of talents can promise a fast development of the software sector in an area," Liu says.

In another development, an academy dedicated to cultivating senior software managers will be set up in Dalian by the city's information industry bureau and hiSoft Corp. It is expected to churn out 1,000 high-level software managers in business administration, project management and marketing in the next three years.

Credit system

Dalian took the lead in China for pushing the idea of constructing a software and information service credit card system.

"The construction of the credit card system boosted the quality and reliability of Dalian's software and service outsourcing sector. It provides an effective guarantee for its expansion," said Xia at a credit card system construction forum at the CISIS, the first forum on the topic in China.

(China Daily 06/30/2008 page10)