Outliving the competition key to surviving in the economic downturn

By Song Hongmei (China Daily)
Updated: 2009-09-10 15:33

It is almost a clich now when companies maintain they are viewing the financial crisis "more as an opportunity than as a serious challenge," but when it is said by Gao Wei, the president of the Dalian Software Park Co (DLSP), it has more than the usual air of conviction.

Outliving the competition key to surviving in the economic downturn

Reflecting on the current downturn, Gao says: "Our business is growing at a considerable pace, even with the chill of the economic slowdown."

His confidence is perhaps justified, given that the DLSP's revenue rose by 10 percent in the first quarter of this year, whilst the value of the park's software exports reached $650 million in 2008, up 35.4 percent on 2007.

Explaining the DLSP's continuing success, Gao says: " The global economic decline has been forcing many software companies in the West, as well as those in Japan and South Korea, to bring forward their outsourcing plans. Fortunately, they have come knocking at our door."

In 2008, a number of Fortune 500 companies, including the Japanese IT firm NS Solutions, the American tech giant Cisco and the insurance provider Sompo Japan, established their R&D and customer support centers in the Lioaning-based park. Some 40 software companies, including Aspect, followed suit and set up software and information service outlets.

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Gao attributed the park's continuing success to the company's business model. Rather than operating as a strictly State-owned business, DLSP is managed as a "government-facilitated, privately run enterprise".

In line with this dual status, the Dalian government has backed the park with a series of preferential policies, including tax breaks and international bidding support. It also streamlined the planning approval process when the development of the park was first mooted.

Spurred by the development of the park, the city's IT sector has enjoyed a concurrent growth over the last 11 years. According to Li Wancai, Dalian's acting mayor, the city's prime geographic location - well poised for access to both Japan and South Korea - as well as its ready supply of well-educated software professionals, have made the city increasingly attractive to outsource-minded companies.

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