Jordan Software Industry: Investigating the Role of Human Capital

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International Journal of Business and Management

Vol. 6, No. 5; May 2011

Jordan Software Industry:
Investigating the Role of Human Capital
Ashraf Bany Mohammed
Faculty of Information Technology, Middle East University
P.O. Box: 383, Amman 11831, Jordan
Tel: 962-777-588-997
Received: November 19, 2010

E-mail: abany@meu.edu.jo

Accepted: December 22, 2010

doi:10.5539/ijbm.v6n5p217

Abstract
Software industry is realized as one key opportunity for socio-economic development, especially for developing countries. Human Capital heavily plays a critical role in such knowledge-based sectors as software. This paper describes and analyzes the role of human capital in the development of Jordan software industry between 1980’s and 2005. In doing so, different roles in software industry are identified, described and analyzed. The study suggests that the existence of some levels of professional, technical and ICT graduates, will not guarantee the development of the sector. Quality, proper utilization, collaboration and policy coherency of Human Capital is needed for software sector development. Moreover, we argue that challenges such as Diaspora can have a positive impact through technology transfer and entrepreneurship as the Indian case suggests. Keywords: Human capital, Economic development, Software industry 1. Introduction

Software industry is seen as an opportunity for economic growth especially for developing countries (Nicholson and Sahay, 2008). The successful case of India and Ireland provide sufficient evidence of software industry role as a major economic growth engine (Baraya et.al 2008). The huge advancement in telecommunication technologies and internationalization of business process where key factors that leads to the globalization of software industry. Countries with low-cost qualified human capital, fine telecommunication infrastructure, and supporting national polices became the ones who benefited most of this globalization and thus had the impressive payback on exports and economic development (Jones 1994, Heeks 1999, Arora et.al 2001). Software industry is not a “solo industry”, but rather a vehicle for industrial development. In fact, software industry is more than just “another industry- it is a central intermediate good in the new digital economy” and its function became not less important than the role played by any other production factors (Athreye 2003). As economies are turning to more knowledge-based industries, many products require embedded software and more competitive e-businesses will require more effective software (Hoch et al. 1999). However, software industry is based intensively on Human Capital (HR) “more than any other high-tech Industry” (Arora and Bagde 2010). In fact, the existence of skilled and professional human capital in software industry is widely acknowledged as the most important element in the success of the software industry (Lakha 1994). Yet, the presence of human capital does not guarantee the quality and many other factors are needed to trigger software industry development.

For a country with limited resources (expect for human capital), Jordan had allocated notable effort to join the software industry exporters club. Although Jordan has realized a notable advancement in key factors supporting software industry development such as education, intellectual property rights (IPR) and telecommunication infrastructure, software industry outputs as are still relatively small. The slow and modest growth of software revenues and exports represent a huge challenge for a country that seeks to replicate the experience of key software exporters and raise the overall software industry contribution to the GDP. This research seeks to investigate and differentiate roles of human capital in building and developing the software industry on the national level. In doing so, we aim to highlight the following research problems: 1. What are the key...
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