Economics of Software Development

The convergence of telecom and IT has been happening since telecom turned digital and became increasingly a software driven industry. Both have become General Purpose Technologies (GPTs) meaning that they have not only both undergone revolutionary changes but they also have radical downstream effects. There is virtually no industry in modern society that does not rely heavily upon both and that has not in some ways been transformed by both. Yet, despite the convergence of these two sectors on the network side and on the services side, senior managers and professional staff in both sectors tend to remain in occupational silos. This is understandable in terms of the specific expertise required in different jobs, but a wider understanding and appreciation of how each affects the drivers of the other is really needed if service innovation by companies and the relevance of policies by governments and regulators are to keep pace. This is especially important for Hong Kong as more and more manufacturing and less skills tasks migrate to mainland China’s lower cost base. What policies are open to government to encourage the development and growth of IT-based telecom services and IT services and applications accessed over broadband? How tradable are such services? Can Hong Kong develop itself as the management, customized, marketing and logistics base for IT products and services entering Mainland China or being outsourced to Mainland China? Can local Hong Kong companies take the initiative to give Hong Kong this advantage? Jobs, incomes and taxation revenues will depend upon the answers to these questions. These were the underlying questions of this TIF sponsored by Microsoft.


  • Daniel McHugh, Senior Analyst, IDC Asia Pacific Consulting
  • David Chow, Chairman, Hong Kong Linux Industry Association
  • Anmar Alani, Director, Developer and Platform Group, Microsoft



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