IT around the world: China

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These focus on attracting both spin-out companies from universities and returners such as scientists, engineers and technologists that have been educated in The West and worked in relevant research or in the commercialisation of technology abroad. It's hoped that they can harness this experience to establish and develop technology companies in China.

"The most famous of these parks is associated with Tsinghua University and known a Tuspark which is based in Beijing," he said. "Associated with these parks there has been significant investment in support programmes that focus on developing companies from the Chinese knowledge base. These parks also support some programmes to assist with globalisation by offering opportunities for overseas companies to invest in R&D based activities in China."

Future for small businesses

The SME marketplace could be one area where investors reap real rewards, as this will account for around 60 per cent of the management software market, according to Research In China. Already 39 out of the top 100 management software providers are international companies controlling the high-end of a marketplace already worth more than RMB8.5 billion.

CCID Consulting believes we'll also see an increasing importance placed on IT services, resulting in the emergence of specialised IT service providers in a market where software as a service is already winning favour.

Middleware - and Service-oriented architecture (SOA) in particular, backed by a new development standard - shows enormous potential in a market – which could be worth RMB2.74 billion within four years, according to the analyst group.

More investment needed – and less piracy

That said, Longbottom firmly believes China still needs more grass-roots investment to see all this working smoothly. "China still needs infrastructure, and as such, data centres are a massive growth area," he said.

He also feels that hardware will provide the biggest area of opportunity for the time being.
"I think that the biggest expenditure will remain in the hardware environment at the moment - software will still be obtained as required," he added.

And therein lies one of the major nuts China has yet to crack. Software piracy is rife with the vast majority of its Internet users believed to dependent on fake software. A survey by Hong Kong-listed Tencent.com found that 74 per cent of those surveyed were reliant on this. Given China's size, that would earn the country top spot in terms of piracy.

Another problem lurking in China is malware. According to Sophos, 30 per cent of malware created comes from the country and there have been various reports and suggestions that businesses may be under threat from state-sponsored hackers.

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