Research On Software Industrial Distribution Under Local Government Competition

Nowadays the strategic role of IT industry becomes more and more prominent. As the key of IT industry-the development of software industry causes much attention from all over the world. With the success of software industry in Silicon Valley of America, India, Taiwan and etc, a storm to develop software industry is being raised in China, and this storm makes every local government competes with each other hotly. This paper uses the SCP frame for reference, presents a"Return - local government Competition– Structure of industrial distribution"frame, and composites the theory of industrial distribution and theory of local government Competition to analyze the effect of local government competition to software industrial distribution. This paper argue that because of the huge incentive brought by software industry, local government competes with each other. And these competition affect the location choice of software enterprise and the structure of software industrial distribution.The analysis shows that between the local governments, there is a dual competition: political competition and economic competition. Political competition let local government act mainly to achieve superior's targets, this is the function of local government as a political institution. Economic competition form a race around economic interests, achieving the economic interests of the local government and the interests of manufacturers and the public demand, and this is the responsibilities of local government as the deputy of local people's interests. The competition will make cost function of various local government area be similar, because of the ongoing competition between local governments, thereby causing a corresponding change in the layout of the software industry. The paper believes that in the beginning of the development of the software industry, the competition between local governments act as an important and direct role in the development of the software industry, but if excessive competition, easily induce failure competition, ultimately affect the normal process of industry and economic development. Therefore, the superior government should consummate scientific assessment system, abandon the static assessment system and the tradition simply focus on GDP, strengthen local public awareness of acts of government supervision, dredge the communication channel and form a bottom-up third party monitoring mechanism, timely appropriate weakening local government's functions as a political branch in industry development.