Chinese Software Industry to Grow 25% Through 2016: Report

 
 
By Darryl K. Taft  |  Posted 2012-01-09
 
 
 

According to a recent report, revenue of the software development industry in China will continue to increase strongly over the next five years.

IBISWorld, an industry research firm, projects that the software development industry in China will grow at an average annual rate of 25 percent to $868.21 billion in 2016. Enterprises, establishments and total employment are all expected to increase steadily due to industry consolidation and overall positive performance, according to IBISWorld.

The software development industry in China generated revenue of $284.02 billion in 2011, up 35.1 percent from 2010, IBISWorld said. The industry is estimated to have grown at an average annual rate of 29.6 percent over the five years through 2011. This high growth rate has been due to strong demand from downstream software users and the government, as well as solid pricing levels, according to IBISWorld.

The country's software development industry has been supported and encouraged by the Chinese government. Indeed, IBISWorld said that, primarily due to industry assistance from the Chinese government and improvement of technology, this industry is expected to continue to develop quickly over the next five years.

The Chinese software development industry offers consumers software products, services and systems integration. In addition, the software service segment has increased rapidly in recent years and has become an increasingly important contributor to revenue growth. In particular, software outsourcing firms have improved, with more external clients from the United States and Europe seeking Chinese software service providers that offer low prices, IBISWorld said.

Moreover, the Chinese software development industry also is highly concentrated geographically. The top five provincial areas by revenue are Guangdong Province, Beijing, Jiangsu Province, Shanghai and Liaoning Province, which together will account for 66.5 percent of total revenue in 2011, IBISWorld said. This is due to the presence of relatively well-developed economies in these regions, and the frequent development of software bases by governments, the report said.

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