Information Technology in Cuba
Cuba does not have a major software development industry. Cuban IT professionals often contract with foreign software companies to transfer technology and currency back to the Cuban economy. However, Cuba does have several potential advantages that may attract foreign investment into its fledgling software programs.
National Software Development Initiatives
Within the informatics sector, the Cuban government's industrial policy is to make Cuba a software engineering and development center. Cuba's industrial planners view the software industry as a future lynchpin of the Cuban economy. However, with a weak Internet structure and antiquated network backbone, Cuba will require significant foreign direct investment by foreign organizations to build its software industry.
Cuba has several key potential advantages: first, Cuba currently has an oversupply of university graduates with few IT opportunities beyond state-sponsored organizations. International organizations can obtain inexpensive development and programming labor through the Cuban IT workforce. Joint venture or FDI projects will provide a technology transfer into Cuba while giving Cuba international exposure in the global software industry. Most importantly, FDI ventures would require minimal initial capital requirements, making Cuban opportunities more lucrative.
The Cuban government hopes to create a large software programmer and developer force. This workforce would ideally help Cuba reach two goals. First, an expanded IT workforce allows the Cuban government to "body shop" people to foreign firms for use in software projects, thereby attracting hard currency and allowing technology transfer into Cuba. Second, an expanded workforce can build a number of Cuban software products in the hope that one would be successful and would generate large amounts of foreign currency (22).
The Cuban government plans to develop this programmer base in university IT departments and hone their skills with development groups in universities and in R&D centers such as the Laboratory of Artificial Intelligence and the Institute of Cybernetics, Mathematics and Physics. A groundlevel youth initiative has been launched through the Communist Youth Union, which has opened computer clubs island-wide. Cuba has also sought international development aid to launch R&D centers. It won UNESCO approval in 1992 for an R&D facility to develop computer virus protection software (23).
Outsourcing of Services
Many nations have shortages of experienced IT talent. While Cuba's IT population is small, Cuba has been focusing on expanding its computer science and engineering programs. With 47 universities with IT departments, Cuba has the most highly educated population in the Americas and the Caribbean. Industry estimates project that Cuba has a total of 5,000 high-tech workers. According to the dean of the IT department at ISPAJE University, exporting Cuban talent allows Cuban nationals to obtain further expertise in systems beyond X.25 protocol while attracting further business opportunities to the island (24).
Cuba's National Institute for Automated Systems and Computer Technology (INSAC), has set up a division, Centersoft, to market Cuban software abroad. Centersoft has undertaken joint ventures with Italian software companies to market multimedia software products. The partner from the more developed country supplies the equipment, marketing, and capital, while Cuba provides inexpensive labor. Entry-level Cuban programmers make approximately 150 pesos per month, or $7.50 in American wages (25).
Major Software Cuban Companies
Two Cuban high-tech companies (Centresoft Corporation and Cimex Corporation), have paired up with two Canadian software companies (Sentai Software Corporation and Indcom Trading Company) to create an international software consortium called CubaSoft Solutions Inc. CubaSoft Solutions aims to recruit Cuban IT talent to Canadian software companies while undertaking IT development projects for both Cuban and Canadian companies (26).
Cuban Software Niches
Cuba has a small but growing class of software engineers and an established track record developing biotechnology. Cuba's biotechnology industry has developed more than 200 products and generates annual revenues of $100 million. Cuba's Center for Genetic Engineering and Biotechnology is rated among the best in the Third World by industry professionals. In addition, Cuba is known for its expertise in telemedicine, multimedia software development, and prior to 2000, Y2K remediation (27).
The software industry can be divided into two key segments: the general software industry and the application software industry. General software most frequently appears as operating systems or Windows-based applications such as Microsoft Office or Lotus Notes. Application software is not dependent upon a particular operating system and is created to meet a specific need within a given field. Most typically, application software is created for fields such as education, engineering, entertainment, and personal office usage.
The majority of Cuban software sales have occurred in the application software industry. Cuban IT professionals and personal computer users do not have access to American-developed programs such as Microsoft Windows due to the current economic embargo. Subsequently, software development has been based on peripheral software not requiring any one particular operating system. Sales have been strongest in educational products targeting kindergarten through grade 12 students. The Cuban software industry has developed 22 key software packages, predominantly targeting the educational market, since 1992 (28).
Opportunities in Cuban Software Manufacturing
Joint ventures with Cuba allow foreign companies to penetrate the Latin and Caribbean market. However, potential venture partners face numerous obstacles in dealing with the Cuban software industry. First, there is international concern about Cuba's noncompliance with international intellectual property treaties. The Cuban government does not support copyright laws, and it is difficult for Cuba to export its software products to markets that respect copyright laws. In addition, the Cuban government does not adhere to many international licensing requirements, particularly ISO 9000 certification, causing quality concerns for many foreign enterprises. Finally, the Cuban government does not support entrepreneurial ventures. Should the Cuban software community develop a strong product, what measures would ensure that the software develop beyond its initial 1.0 version?
Cuba does have a potential advantage in creating Spanish software. Most software products for the office, home and educational sector in Latin America are currently produced in English. Should Cuba develop a variety of Spanish application software packages, it may obtain a significant first-mover advantage.