The Canadian Computer Software Industry: An Analysis

Introduction

“The involvement has become so involuntary that it has now become a dependence and an addiction, to an extent that the absence of a computer makes someone completely dysfunctional,” thus making the computer software industry an instrumental new force within the international economy (Kent & Williams 1997 p 140). Our insatiable need for new and updated technologies to accompany us through almost all walks of life has been resulting in a rapidly growing computer software industry that is featured in a number of locations around the world. Canada has seen
great success in the growth of its software industry and its ability to export
its intellectual products all over the globe.

Computer Software Industry

The computer software industry is a relatively new development on the international market
place. Only a few decades ago, there was no such industry at all. Thanks to a number of innovative software developers, the rise of the industry has become a booming success. The industry itself increased dramatically in the 1990s. It was during this period that software was growing in a number of other supporting industries. Software soon became an integral part of industries like healthcare, business applications like databases and network structures, personal finance, and education (Kent & Williams 1997). The more intertwined it became with other business applications, the more successful software became as a product to export and sell on the international market. One major trend within the industry now is the incredibly multi-faceted approach it takes to developing its software products. According to the research, “Firms often have a broad flexibility in their product-level implementation of a product variety strategy, and this is widely recognized in the software industry,” (Cottrell & Nault 2004 p 1005).
This allows the producers in the industry to bundle different product applications, and thus offer various products over a variety of competing computing platforms.

In Canada specifically, the computer software industry has proven itself to be one of the
top developing producers in the country. It has been increasingly rapidly, largely surrounding providing software for the entertainment industry as well as for the more traditional facets like
health care and personal finance. Still, most software producers in Canada focus on keeping up with trends of offering a variety of products available across computing platforms (Cottrell & Nault 2004). The industry has become a top exporter for Canadian enterprise, showing how successful Canada has been in harnessing its intellectual capital.

International Trade Theory International trade has often influenced the development and structure of the Canadian software industry. Canada has long seen its software industry export
many of the innovative software packages and platforms to other nations, like its neighbor the United States and elsewhere (Kent & Williams 1997). As many nations all over the world continue to increase their technological capabilities, more innovative and efficient software is demanded internationally. Software is now a product that is exported to other nations with less intellectual capitol or structures for generating their own unique software content. This is
incredibly interesting to see because Canada, on the other hand, is a largely consumer style country that normally imports goods produced elsewhere where more natural resources are available.
Essentially, this shows that intellectual capital can be just as lucrative as the production of raw goods into actual consumer goods. Moreover, issues with piracy and how it relates to software development have proven to be powerful in influencing contemporary international trade legislation and agreements. Here, the research suggests that “A number of countries have been in the news lately for software, music, and video piracy” causing governments to pay “more attention to these countries during trade negotiations,” (Kent & Williams 1997 p 140). The software industry, and the need to keep value to intellectual capital as a means of revenue for the nation, has begun to influence the modern applications and processes within international trade
and the agreements made between trading countries.

Competitiveness
The competitiveness of the Canadian software industry is growing dramatically. While the industry used to only support largely Canadian business needs, it now exports software all over the globe and is competing with many other major nations like the United States. Competition increased because of the Internet, but also because of the capabilities the industry has shown itself to have here in Canada (Fruend & Weinhold 2004). Essentially, the nation is providing to have the educational and training foundation to consistently generate innovative products that challenge the prowess of nations like the United States.

Canada’s competitiveness can be analyzed using Porter’s diamond analysis. Thus, first is the examination of factor conditions that help create the strength in Canada’s competitive condition. These are essentially production factors that help give the industry its strength. Canada has a huge wealth of intellectual capital that can help increase the power of
its software production industry. Still, it is facing huge competition from the intellectual circles of the United States; but also from nations like India and Singapore, where growing educational standards is leading to increased levels of education and training, making such nations more capable of producing competitive intellectual capital (Khanna & Palepu 2004). Next is to
look at the firm strategy, structure, and rivalry. Management structures in Canada prove to
often be innovative and inspirational within the software context. Following examples set by American companies like Google, many management strategies understand the benefits of allowing employee inspiration within an openly creative atmosphere. This then creates high organizational cultural values and increased participation within Canadian firms adds value to
the employee’s work. Overall, this helps increase the competitive position of Canadian firms over other Indian firms, which tend to have much different managerial strategies. Additionally, there is the evaluation of demand conditions at home here in Canada. These help to shape emerging factor conditions. The domestic demand for the products being produced by the Canadian computer software industry helps boosts its capabilities to then be able to export.
Increased domestic demand therefore spurs more rapid development and innovative changes within the industry and creates a competitive advantage when compared to nations that have very little domestic demand and only really generate software for exporting purposes, like India (Khanna & Palepu 2004). Related and supporting industries are the final factor in this analysis.
Some suppliers include engineering companies and organizations that build hardware devices that run the software Canadian innovators are producing internally within Canada, as well as outside the nation from countries like China and India. The increases seen in the Canadian software industry then creates a situation where these industries benefit as well. Moreover, there are a number of supporting industries worldwide, including entertainment, health care, and even business development and governance. Software is needed for almost every modern industry as it evolves on a global market and is digitized to increase efficiency. It adds value to the industry by increasing competition that drives up quality and innovation of written and developed software.
The ever-increasing demand for new and innovative software systems then continuously increases the capabilities of modern software development.

References
Cottrell, Tom
& Nault, Barrie R. (2004). Product variety and firm survival in the
microcomputer software industry. Strategic
Management Journal, 25(10), 1005-1025.

Freund, Caroline
L. & Weinhold, Diana. (2004). The effect of the Internet on international
trade. Journal of International Economics,
62(2004), 171-189.

Khanna, Tarun
& Palepu, Krishna G. (2004). Globalization and convergence in corporate
governance: Evidence from Infosys and the Indian software industry. Journal of International Business Studies,
35(6), 484-507.

Kent, Allen &
Williams, James G. (1997). Encyclopedia
of Computer Science and Technology: Supplement 21. CRC Press.

Agricultural Subsidies Development

Introduction
Agricultural efforts worldwide, also known as “agribusiness”, support the majority of the world’s food supply. Farmers work to provide the basic staples such as fruit, vegetables, protein (meat), and milk. Other farmers work to provide raw materials for the textile industry (such as leather or wool). Agribusinesses vary greatly in composition: a great deal of variety occurs in size (ranging from small family-owned groups to large transnational conglomerates), to type (organic farms counterbalance farms that use genetically modified seed and fertilizer), to farms that choose not to farm their land at all. The impact of tariffs and subsidies often drives the structure and business plan of the farm.

In the United States, one of the world’s foremost agricultural industries is dairy farming. However, as is the case with most commodities, the pricing structure for milk is cyclical. This economic pendulum swing has caused the consolidation and elimination of small- and medium-sized farms, in favor of large transnational corporations. To combat the economic erosion of the family farm environment, the government introduced the Milk Income Loss Contract program (MILC) as part of the 2002 Farm Security and Rural Investment Act. (D'antoni & Mishra, 2012, p. 476). These cost supports tend to protect the production levels of milk products, and reduce the reliance on imported milk products in the United States.
Citizens in the Poorest Nations Which do you think would help the citizens of the world’s poorest nations more, increasing foreign aid or removing all the agricultural tariffs and subsidies? The latter would help them more. Here’s why, in researching global poverty one can come across startling statistics, e.g. almost half the people in the world live on less than $2.50 a day (Shah, 2011), 1 out of every 2 children live in poverty (Shah, 2010); speaking of children, 1 child will die every 4 seconds due to poverty, easily preventable diseases and illnesses, and other related
causes (Shah, 2010), the GDP of the 41 Heavily Indebted Poor Countries is less than the wealth of the world’s 7 richest combined (Shah, 2011).

These facts are dumbfounding. And they might cause one to reason that global poverty is an issue of insufficient supply. That if there were more food and resources available and disseminated around the world, these impoverished people would (1) stand a better chance at surviving the hardships of poverty, and (2) have an increased opportunity to make a better life for themselves. While this is not an illogical way of reasoning, as there is an occasional shortage of food and resources (particularly medicines), one of the main causes of global poverty is an oversupply of goods, resources, and services.
And this may seem counter-intuitive given the aforementioned facts (how can people remain poor when there’s plenty to go around?). Nevertheless, this oversupply phenomenon is known as global overcapacity. To clarify a bit more, it’s the notion that due to technological advances in industry and in science, goods and services are cheaper and easier to produce resulting in an abundance that exceeds demand (Judis, 2010). There’s an old
Chinese proverb that states, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” This is a maxim that rings true for all fledgling countries wracked by poverty. It’s only through education and the adoption of new technology that a country can become self-sufficient and independent. Well, the definition of self-sufficiency
has changed in the global context, as no country is truly self-sufficient with regards to goods (particularly food) and services.
Due to globalization and industrialization sovereign countries are now, more than ever, forced to
rely on neighbors in the international community to provide goods, services, and resources not produced and/or endemic to their own land. So in a sense, as a result of this interconnectedness, the paradigm has shifted from the goal of “self-sufficiency” to a more leverage-based position within the international community (Freidman, 2005). This means that fledgling countries wracked by poverty are not seeking “self-sufficiency” so much as they are seeking leverage at/in the international marketplace. This is an important point to make because in many cases in precludes the poorer countries from becoming financially stable. It’s one thing if a country has the resources and the wherewithal to pioneer a path to socio-economic independence and fails to do so (for reasons such as war, oligarchy, despotism), it’s quite another if a country has the passion and the desire to do so, but lacks the international support and the subsequent
leverage needed to become a player at the negotiating table. While many countries experience both scenarios to varying extents (they’re not mutually exclusive), it is the case that many countries have the passion and desire to change, but lack the true, string-free support, needed to propel them into the modern era.
To circle back to that Chinese proverb, why do countries in power continue to deliver fish, instead of curriculum on fishing techniques? Here is an excerpt, from an article regarding the ill effects of food dumping, that underscores this issue, “Food aid (when not for emergency relief) can actually be very destructive on the economy of the recipient nation and contribute to
more hunger and poverty in the long term. Free, subsidized, or cheap food, below market prices undercuts local farmers, who cannot compete and are driven out of jobs and into poverty, further slanting the market share of the larger producers such as those from the US and Europe”
(Shah, 2010).
There’s two additional points to make regarding this scenario. The first is obvious and an iteration of what’s just been said, the reason countries in power give away food, supplies, and other resources is because it subverts the efforts of foreign competition. The other reason countries in power donate food; food in particular, is because it helps diminish the available supply in the U.S., thus reducing global overcapacity.
One has, no doubt, heard of corn farmers burning their cornfields to serve a similar end, reduce supply to keep prices high.

Lavishing Extensive Support

This of course raises and also partly answers the question, “Why do governments in developed nations continue to lavish extensive support on agricultural producers, even though those producers constitute a very small segment of the population? The answer is obvious, given the aforementioned facts, to have the ability to control and manipulate supply. If a country like the U.S. continues to meddle in farming, almost nationalizing it in a way, it can control where many of those crops end up. If, for example, the U.S. wants to destabilize a country or subvert the economy of a corrupt regime, it has at the ready an abundant supply of resources to deliver and expend. And by undermining the local merchants and the country’s organic economy, it creates a dependency for that country on U.S. aid, which increases the U.S.’s leverage over that country’s government, while also (as previously mentioned) increasing the market share of U.S. producers. In short, both questions can be addressed by investigating how powerful countries attempt to deal with global overcapacity.
There are many efforts and considerations in worldwide and transnational agribusiness, but the largest impacts to consider are the impact of tariffs and subsidies. When considering the talks that have taken place regarding subsidies as a barrier to free trade in agriculture, one must take into consideration that there are two types of subsidies. The text does not clarify which type of subsidy is being provided when it states that the United States provides agricultural subsidies totaling some $43 billion per year (Hill, 2011).
The WTO recognizes that developed and developing nations should cut the value of their export subsidies by 36% (WTO). These restrictions may affect, but not stop all domestic subsidies.
Some subsidies encourage overproduction causing low-priced dumping on the markets. These are subsidies that are required to be cut by developed and developing nations. The least developed nations do not have to cut their subsidies. However, there are subsidies that may continue and other that are encouraged to continue.

Subsidies for government services such as research, disease control and food security are considered “green box” measures and can be used freely (WTO). The World Trade Organization also has “blue box” measures; these are direct payments to farmers when they are required to
limit production. As of 2007, negotiations were stalled due to several nations being unable to agree upon terms. These nations were the United States, the European Union, India and Brazil (Palmer, 2007). As of 2011 there has still been no official agreement and several leaders have voiced that 10 years of negotiations has been far too long.
As a group, our initial response was that the developed nations were greedy. In addition, farmers remain very politically active and most nations want to remain self-sustaining when it comes to their food supply. However, after further research into the WTO subsidy negotiations, it would appear that allowing one type of subsidy while not allowing another would be difficult to control and a burden to prove. One solution suggested was that nations would only produce items where they could be produced the cheapest. Another solution suggested was that the WTO could determine what nations would which crops. Crop rotation would have to be taken into consideration as well.


Conclusion
Greed tends to be a driving factor in the agribusiness industry. The primary concern is profitability for the farmers, not the overall expansion of the trade or research. Reduced tariffs and subsidies often allow for lowered production to maximize income, versus expanded production to provide more crops to market. The cultural impact of agribusiness can’t be ignored: a great source of pride can be gained by one’s production of food and textiles from their own land. However, the financial windfalls that a well-executed strategy can afford mid-size or large farming operations are very powerful.

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