Overcoming the Software Developer Experience Gap in China
This article discusses how the experience level of software developers in China has caused challenges for software outsourcing companies when competing with Indian competitors. However, as the software industry in China matures over the next six years, the experience level of Chinese developers will edge closer to international standards.
My last post before the holidays, Chinese software services revenue predictions fall short, discusses how the Chinese offshore services industry has not met analyst predictions in previous years, but did not get into why. One reason China has not reached expectations, is software development experience within the country.
The graph on the left shows an impressive increase in software related University graduates over the past ten years, but when developing software, experience is more important than number of developers assigned to a project. Analysts predict only 5%-10% of software developers in China have the skills and experience necessary to work on projects for Western companies. The difficulty to consistently build effective teams from China’s current labor market is a key issue being faced by software outsourcing companies in China.
Increased government focus on software development education from 1998 to 2007 resulted in a 1200% increase in the number of software related graduates from China’s educational institutions. Although education and jobs are abundant in China, there are not been enough senior developers mentoring and leading the newly graduated work force. Without a significant number of middle managers and senior team members, it is difficult to deliver more complex software development projects from start to finish.
Salaries in China are similar to India, while the average experience level of software developers in China is less than Indian. As a result, Chinese software outsourcing companies have difficulty competing purely on value with Indian competitors, because experienced software developers are significantly more productive than less experiences developers.
The chart on the right breaks down experience based on government stats, and in 2007, 80% of software developers have less than five years experience. So, software outsourcing companies need to carefully select the top talent in order to build effective teams for Western clients.
However, there is currently a significant amount of lower level software development being done in China for the local and Japanese markets, which is providing much needed hands on experience for the educated workforce. As a result, the current experience gap will level out within the next ten years.
I assumed a modest 10% increase in graduates from 2007 - 2015, to create the graph on the left. Looking at the experience ratios up until 2007, it is easy to see why software development teams in China have not been able to compete with more experienced Indians, and are often only considered for lower value work. However, as the industry matures the experience ratio will level out and by 2015 China will be able to create a massive number of software development teams able to work on more complicated, higher value projects.
Although there is still a lack of experience throughout the country, I have noticed a substantial improvement in the quality and efficiency of developers within the past three years and as this continues, Chinese developers will provide more value to western companies, and by 2015 will be competing head to head with Indian software developers.
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Interesting observation and it is reflects many truths but as with any story there are pockets of excellence/experience. One observation that I would point out is the speed of learning and adaptation that exists within China. This is a society that can make change and unlike other regions of the world who are slow (or inflexible) to act, China can and will make change quickly when provided with the facts and reality.
Jerry E Durant
7 Jan 09 at 10:26 pm
Interesting article, and perhaps it might come true 10 years from now, however would like to point out that you’re assuming somewhat unrealistically that while Chinese programmers gain more experience over the next 10 years, Indian programmers will stagnate.
Seems a lil flawed, is’nt it?
Anyways, having said that, I do think that China is a powerhouse and the Chinese people are extremely hardworking and talented, and I believe that they will do extremely well in whichever field they choose. Also, they do have a very good advantage in catering to the Japanese, Korean and Chinese markets, all areas where Indians will have a disadvantage.
Lalit
2 Feb 09 at 7:15 pm
Good informative and an interesting post….thanks for sharing this article with us.
Offshore Outsourcing Company
14 May 09 at 9:34 pm
I’d have to agree with Lalit’s comment that in 5 to 10 years’ time, other destinations like India and the Philippines would also be evolving and earning experience maybe even to new levels in catering to clients ever-changing needs.
It be best that China should immediately adopt and adhere international standards. They’re opening their doors yes, but they’re not opening these fast enough to be effective. They have the human resources, they have the skills, it’s just the culture of Chinese business that seems formidable as much as like their Great Wall.
Philam
21 May 09 at 9:14 am