Software, China, and Progress

In reading about the challenges the world faces from China, one is struck by many notable items. Energy infrastructure, human rights, and wage disparity are just a few of the issues that arise, however I’d like to take a moment to talk about intellectual property protection (or the lack thereof) in China and how it might impact the overall picture. More importantly, I’d like to talk about the vast amounts of highly technical and professional software that is being pirated and sold.
On a whim, I figured I’d do some googling around to see exactly what kind of goodies are available on the market. I wouldn’t call it the black market since that would imply something that is more under the table, where what I have seen is out in plain view.I guess I can’t say I was shocked to find many parcels of highly sophisticated software available for FTP download or burned directly to CD. These range from computational fluid dynamics packages, to molecular modeling, to all kinds of finite element analysis software packages. A quick email to the “distributor” finds them selling for 50 USD a pop. A little research finds that these same packages sell from $5000 to $10,000+ each. Now, 50 USD doesn’t sound like a lot to me, but for PhD level scientists or engineers over in China, that’s almost half a month’s wages.
And so I’m left with a few questions. When we offshore our R&D work, do we check to see if their development software licensing is legit? I gather not. I know that IP laws and their enforcability is being revised and negotiated as I write this little piece, but do we really expect that they will be adhered to? Certainy we don’t expect to police them. I mean, we are talking about the free market, not necessarily the fair market. If we understand and accept this situation as the new way of things, what does that signal with regards to the software industry? How do we continue to justify paying so much for scientific software for R&D while our biggest competitors just take it? And remember, there’s a lot more of them than us, therefore a piece of pirated software over there is going to have a lot more bang for the buck on the competitve R&D field of exploration.
My simplistic view would say that from a productivity standpoint, that if productivity is a measure of “outs” over “ins,” then a lot of our software efforts look at maximizing outs for a given amount of ins. Would it not be more effective to say, let’s just produce more outs? In other words, what is needed are more market connected ideas and basic research to create more overall outs (goods and services). Maybe the same scientific/engineering companies should rethink their pricing strategies. Offer a deep discount on software for idea generating activities, and go for a royalty on any work that makes it to market. The Chinese already have the tools, all we are doing by staying with the status quo is creating further barriers to idea formation and exploration.

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