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Dalian Software Park, an industrial zone

Dalian Software Park. Science & Technology World Website

 

Dalian Software Park, also called DLSP, is an industrial zone, created in 1998 in the western suburbs of Dalian City, Liaoning Province, China, where many of the world's large and medium-sized IT-related companies have set up shop to do software development and information services. It is part of Dalian Hi-tech Zone in the broader sense. While American and European companies typically have gone to Bangalore and other cities in India because of the English language capability, the Japanese companies have gone to Dalian and other cities in China due to the Japanese language capability.

DLSP is owned by Dalian Software Park Co., Ltd., which was invested and established by Yida Group and is a professional service provider in business park development, management and operation. By the end of 2009, there're over 500 enterprises in the Dalian Software Park, 41 percent of which are foreign-funded. There are 37 Fortune 500 companies including IBM, HP, Accenture, Panasonic, Sony, Hitachi, NTT, Oracle, AVAYA, NEC, Fidelity, BT etc. In 2009, Dalian Software Park realized an annual sales income of RMB 20.2 billion, with an export value of USD 0.86 billion.

Dalian is one of China's 11 "National Software Industry bases" and one of five "National Software Export bases." Currently, more than 300 companies, including 32 Global 500 corporations, have offices in the park.

Nearest airport, Dalian Zhoushuizi International Airport, is 10-20 km away from Dalian Software Park. Its nearest national highway is G202.


Flow of overseas IT outsourcing

Beginning in the 1980s, many IT companies in the developed world began to take interest in offshore labour markets. IT related work in the developed countries had been suffering from lack of IT workers and increased cost. The worldwide trend is now moving from domestic outsourcing to overseas outsourcing into countries that have a comparative advantage in labour intensive business activities. The IT work is not only software development which require engineering skills (ITO), but also other business work which requires soft skills rather than engineering skills. (BPO), such as call center and other information services is a major aspect of DLSP's tenant's offshore business.

 

Launch of Dalian's software industry

Having been the major industrial base of Manchukuo during Japanese colonization, Dalian has a history of foreign investment. Since the early 1980s, Dalian has been a major recipient of Japanese and Korean foreign investment. Software development in Dalian began in the early 1980s. To attract economic activity, the municipal government established Dalian Development Area in the northern suburbs and Dalian Hi-Tech Zone in the western suburbs for the high-tech industries. During the first half of the 1990s, application software outsourcing from overseas, particularly from Japan, has increased. Dalian Hi-Thik Computer Technology Corp. (DHC), which had derived from Dalian City Computer Center, and Dalian Hisoft Corp. were established in High-Tech Zone. They were involved in application software development, outsourced from NTT Data, NEC, Hitachi Software Engineering, etc.

Since the 1990s Dalian City has emphasized the development of the IT industry, especially in Dalian Hi-tech Zone and Dalian Software Park in the western suburbs near Dalian University of Technology. There, there are not only Chinese IT companies, such as DHC, hiSoft and Neusoft Group, but also American, European, Indian and Japanese IT companies, such as Accenture, Dell, Genpact, HP, IBM, Liferay, SAP AG, Oracle Corporation, Siemens, Alpine, CSK Holding, Panasonic, NEC, Sony, Cisco, Netapp, British Telecom, Aspect, and Fidelity. Currently, the "Lushun South Road Software Industry Belt" Plan is proceeding, including Dalian Software Park Phase 2..

Dalian has recently become an important center for information technology offshoring and business process outsourcing, similar to Bangalore in India; the city was described in "The World Is Flat" by Thomas Friedman (2007). In another way, Dalian is the forerunner of China's "Re-Development of the Old Industry bases in Northeast" National Project, which began in 2002.

Today, Dalian is the most establishes information technology outsourcing (ITO) and business processing outsourcing (BPO) city in the PRC and among the top ITO and BPO destinations in the world.


Birth of Dalian Software Park

Dalian Software Park modelDalian Software Park (DLSP) was established in 1998, in the 3 km² area, in the western suburb of Dalian, near Dalian High-Tech Zone. It is surrounded by the hills on the three sides and by the Yellow Sea on the remaining side, and is an academic area where Dalian University of Technology and Dongbei University of Finance and Economics are located.

Management of the Park is done by Dalian Software Park Co., Ltd., a private enterprise 100 percent owned by one of the three largest real estate developers in Dalian (Yida Group), which is rare in China where all other software parks are managed either directly by local governments or indirectly by government agencies. The company provides professional services, from registration and basic property management to human resource services to assist in the operations of the IT companies. See also "Preferential policies" below.

Today, Dalian Software Park is the leading business park management and development company in the PRC. In addition to the park in Dalian, DLSP has developed parks in Wuhan, Suzhou, and Tianjin.

 

History

Established in 1999, Dalian Software Park is a key part of the development of Dalian, a hub of the international IT industry in China. With an area covering 7.16 square kilometers, Dalian Software Park is one of the ten State-level software industry bases. Its export volume is increasing by 100 percent annually. Over 300 enterprises, including more than 60 foreign companies, have settled their IT business in the park.

As it opened officially, Neusoft Group came to this park to establish their development centers, and later established Neusoft Institute of Information. Matsushita Electric Industrial (Panasonic) was the first to enter the park, followed by Alpine, Sony and others.

American and European companies, such as GE (Genpact), HP, IBM and SAP, came to establish ITO and/or BPO centers, mainly to do their Japanese subsidiaries' work. Chinasoft (headquartered in Beijing) and Xinhua were among the first Chinese-owned IT companies. Later, such Chinese-owned IT companies as iSoftStone (Beijing), New Touch (Shanghai) and Nantian (Shenzhen) also came.

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