National Software Strategy for Scotland : The Way Forward : Internationalisation

Initiative 5; Bilateral Development Programmes

To realise the internationalisation thrust with the strategy, Scottish firms must engage in product development with firms outside Scotland and the UK. Crucially, internationalisation is not just about trade, but rather about international interaction at every level of the product development lifecycle. Scotland’s key regional competitors (such as Israel) have achieved this.

Therefore, this initiative - which applies equally to the goals of internationalisation and productisation - would set up product development programmes with bilateral support and participation between Scotland and a targeted country or region.

The initiative would comprise assistance to firms wishing to undertake product development with organisations from other countries. It would specifically target US firms and could look to be involved in the early stages of platform development where participation in the formation of de-facto standards can provide first mover advantage. Existing SPUR and SMART awards address this area for research but not for products close to market.

This initiative would be particularly effective in developing technical linkages with US firms that may complement and help to develop market and commercial linkages. As an additional benefit, Scottish firms would obtain more accurate and more advanced market information on industry trends.

The idea for bilateral product development programmes stems from the successful BIRD programme in Israel during the late 1980s. The BIRD programme was successful because it developed both technical and marketing links with the US that have subsequently been exploited. In addition, it has generated substantial US interest in Israel and may have been a contributory factor in investment in the Israeli industry. Previous UK initiatives such as the Software Products Scheme in the late 1980s were also successful in this regard.

The initiative could be deepened and anchored through seeking a joint funding arrangement with another country or region where mutual benefits could be identified. For example, UK/European market access for N American products; N American market access for Scottish/UK products.

This initiative is responsive to two specific deficiencies in the current Scottish software industry structure, namely:

• concern for the low level of product development in Scots industry;
• remoteness in engagement in the development of international standards.

As far as take up of this initiative is concerned, we believe that significant effort and encouragement should be made to enable Scottish firms to be involved. On the other hand, if Scotland can establish a sufficiently high profile, US firms - that are highly proactive in looking for new sources of product ideas and, perhaps, lower cost sources of new product code writing - will be responsive to approaches from Scottish firms.