Dalian Software Park: The Crown-Jewel In China’s Outsourcing Industry
October 15, 2008 – 10:44 am
INTRODUCTION: Dalian Software Park was launched in 1998 in the western suburbs of Dalian City, Liaoning Province, China. Dalian SW Park is one of China’s 11 “National Software Industry Bases” and one of five “National Software Export Bases.”
Currently, around 392 enterprises have settled in Dalian Software Park; of these, over 42 percent are overseas enterprises and 50 perce are engaged in software, BPO and ITES outsourcing services for North Asia and other regions.
Thirty-three Global 500 corporations, such as GE, IBM, HP, Dell, Matsushita, Sony, Toshiba, Accenture, and SAP, have established bases in Dalian.
There are also many Japanese & Korean companies present due to the language capabilities.
Dalian Software Park is working to become the The Offshoring Center of Service Outsourcing in Northeast Asia by improving its image as the global resource center of multinationals, both locally and internationally.
LOCATION & TRANSPORTATION: Dalian is a beautiful coast city and is located in the southern tip of China’s northeast region. It is surrounded on three sides by the Yellow and Bo Seas and has a mild climate Dalian has direct air flights to the major cities in China, to Seoul in South Korea and to nine cities in Japan. It is about 2 hours from Beijing by air and 4 hours from Shanghai.
Dalian has a population of about 6 million. It is the most developed city in the northern region of the country, where the most talented of the 130 million Chinese citizens seek jobs.
IT WORKFORCE & LANGUAGE CAPABILITIES: Most of the IT workers come from the numerous engineering schools of the universities in Dalian and other cities in the area, including Dalian University of Technology, Dalian Liaotong University, Northeast University, etc.
Dalian Software IT capabilities include Application Software development, BOP/Call Centers; 10% Embedded Software Development, and others, such as CAD, IC, PCB Design, R&D , and animation, and Video Games.
Application development is done mostly by the engineering school graduates of the universities, while embedded software development requires more technical skills in areas such as telecommunications or special hardware.
The workers involved in BPO vary from the middle school graduates for data entry, to the foreign language school graduates for simpler BPO work, to finally the returnees of overseas studies for inbound or outbound call center/contact center work.
To emphasize the importance of information privacy, Dalian City Software Industry Association has recently implemented, in cooperation with the Japan Information Processing Development Corp (JIPDEC), a city-wide PIPA (Privacy Information Protection Assesment) program.
Dalian is unique in that there are many workers with Japanese & Korean connections due to various historical facts and the presence of about two million ethnic Koreans, most of whom live in the Northeast.
Workers with English abilities come from the various universities where English is their first major. There are also those who speak English from having studied abroad, typically in countries such as the U.S., Canada, Australia, New Zealand and Great Britain.
French-speaking workers are either from Dalian University of Foreign Languages (DLUFL, 100 graduates each year), Liaoning Normal University (LNNU, 30 graduates each year) or are individuals who have studied abroad, typically in France and Quebec, Canada. L’Alliance française, France’s worldwide network of French language education, is located at DLUFL.
NEXT PHASE DEVELOPMENT: Dalian Software Park began its Phase 2 development as part of the City Government’s “Dalian Software Industry Belt Along Lüshun South Road” Project, in a 12 km² area. The park was designed by the internationally-renowned Gensler Corporation and includes 7 office buildings and a supporting function center.
The ambitious second phase project is to form an industrial arrangement enclosing a Software Development Zone, a Research & Development Zone, an Information Service Zone, an Education & Training Zone, and a Corporate Campus Zone.
Additionally, a Public Services zone, a Communication Technology zone, an area for commercial exhibition, luxurious residential areas, and Residence zones as well as coastal seashore parks are to be constructed.
It is estimated that in 2012 Dalian’s software and information service industries’ total output value will be 80-100 billion RMB, which is about 1/6 of Dalian’s GDP.
GOVERNMENT PREFERABLE POLICIES: The State currently holds a preferential policy toward overseas high-tech companies, and provides such incentives as an exemption from corporate income tax during the first two years of business establishment and a 50 percent tax deduction in the following three years.
LIST OF MAJOR SW COMPANIES IN THE PARK:
- US companies: BearingPoint, Citibank, Dell, Accenture, Fidelity Investments, Genpact (a GE company), HP, IBM, Oracle Corporation, etc.
- Chinese companies: China Software & Service (CS&S), Neusoft Group, Neusoft Institute of Information, New Touch, DHC, Hisoft, etc.
- European companies: British Telecom (UK), SAP (Germany), Oostsourcing (A joint venture of Akyla 40%, Better Be 40%, Insight 20%, Netherlands)
- Japanese companies Alpine, Fujitsu Device, Hitachi, NEC, Panasonic, OMRON, Sony, Sumitomo Wiring Systems, Yokogawa Electric, HAL Film Maker, Jtekt, MI Communication, etc.
- Other companies: Satyam (India), Wistron (Taiwan), Konica Minolta, DHC, Lüshun South Road Software Industry Belt Demonstration Room, etc.
