Chapter 4

Globalization of the Software Industry

Historically, the United States has dominated the software industry. Government support for the computer hardware and software industries and programs from the U.S. Department of Defense and NASA as well as the SAGE project in the 1950s and 1960s were critical in creating a domestic market for software on a large scale.1 The United States had a first mover advantage as the diffusion of computers in the United States was years ahead of that in Europe and in other parts of the world. In addition, the size of the U.S. domestic market for packaged software was more than 20 times larger than that of any other country.2 This gave U.S. firms an edge in producing software products that could be sold on ...

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