Beijing Hosts First BSA Annual Meeting Outside the U.S.; International and Local Software Company Partnerships Spark Innovation.

BEIJING -- The Business Software Alliance (BSA) held its first Annual Meeting outside the United States in Beijing today. Top executives from BSA member companies congregated at the Kerry Centre Hotel to mark the start of a two-day conference which seeks to define the association's agenda and strategy for the year.

Robert Holleyman, President and CEO of BSA, said, "Our decision to select Beijing as the venue of our Annual Meeting this year is a reflection of our members' interest in China. We are committed to working with the Chinese government and the local IT industry in encouraging continued growth of the tech industry and the future of innovation."

A growing partnership with China

China has caught the attention of the world mainly for its rapid economic growth. Its emerging software sector promises to be a strong driver of the country's ongoing development. BSA members, in turn, have continued to increase their investments in China, most notably in research and development.

As part of a long term commitment to the development of the local software industry, BSA commissioned a study, which was conducted by IDC, a leading global research firm, to measure the contribution of software and IT services industries to the growth of China's economy.

The report, which was released today, found that the growth of the industry thus far had been the result of the collaborative efforts between international and local companies. The IT sector was found to be of increasing importance to the growth of the Chinese economy. From a 2% contribution by the IT sector to the GDP in 1989, its importance had grown by 500%, accounting for almost 10% of GDP growth in 2005. Spending on IT in China had also grown at a rate of 12% in 2005.

With China expected to be ranked as the world's fourth-largest economy by the end of 2006, the report also found that there were still challenges which remain. With a lower IT spending as a percentage of GDP than that of the other largest economies, for China's economic growth to continue, its investment in IT must continue at a pace that exceeds GDP growth.

Continued collaboration and partnerships between international and local companies will be essential in ensuring that there will be more new jobs, new tax revenues and new investments in China.

IDC estimated that for every dollar of revenue generated by international suppliers, at least $2.50 of revenue is generated by local suppliers through locally developed software and IT services on both local and international platforms. Of the 500,000 new software-related jobs created between 2003 and 2006, half are accrued to local suppliers, and half to international suppliers. Software-related employment is growing at almost 20% a year among local suppliers, and at 17% among international suppliers.

Drawing reference to a recent speech made by Premier Wen Jiabao where the Premier had spoken about the importance of intellectual property to China, Holleyman said, "I echo the Premier's recent comments linking intellectual property rights protection to the encouragement of local innovation. Protecting IPR is to respect labor, knowledge, talents and creation. And that in turn encourages local technology innovation. The BSA and its members applaud the Premier's commitment to promoting IPR, as we are committed to promoting the future of innovation."

In conclusion, Holleyman noted, "We look forward to expanding our partnerships with the Chinese Government, the Chinese software industry associations, and the Chinese software industry. We look forward to these important joint efforts that will accelerate the expansion of the software and IT services industry, which, in turn, will make an even greater contribution to China's economy."