The document discusses the role of software development in diversifying Nigeria's economy, emphasizing its increasing profitability due to lower costs of computing and communications. It outlines various funding sources for software projects and highlights the economic benefits and unique properties of software. Additionally, it provides recommendations for the Nigerian government to enhance the software industry, including investment in infrastructure and curriculum development in education.

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SOFTWARE DEVELOPMENT FOR THE DIVERSIFICATION OF NIGERIA ECONOMY
Patrick Ogbuitepu
Lead Application Developer
Maybeach Technologies Limited
Email: patrick.ogbuitepu@maybeachtech.com
Abstract
The sole existence and survival of mankind till date has been based on our unique ability to adapt
to constant change. Thousands of years ago, our ancestors survived changing climatic conditions
by creating clothing & shelter to protect their bodies & thus was the rise of invention, which led to
the creation of societies & economies.
In our life time, we have seen how the world has constantly changed. Not too long ago,
photographic film manufacturers and film developers played vital roles in photography but this is
no longer true with widespread availability of digital cameras, old job roles have been replaced by
new job roles such as digital photo album software developer and cloud storage software developer
etc.
Likewise more industries and job roles will continue to be replaced, and it’s upon us as a nation to
decide whether we want our children to enjoy the economic benefits of being part of a global
workforce or suffer the challenges that would be faced as more jobs continue to disappear &
economic earnings decline.
1. Introduction
Sommerville (2006) defined software as a system that consists of a number of separate programs,
configuration files, which are used to set up these programs, system documentation, which
describes the structure of the system, and user documentation, which explains how to use the
system and web sites for users to download recent product information.
Like all production related activities, software development requires at the very minimum, the
following resources:
a. Skilled Human Resource
b. Electric Power

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c. Internet Connectivity for the purpose of research & communication
d. Computer System for design, development & documentation
e. Computer Applications to aid in the development & distribution of software
2. Cost of Software Development & Financing Software Development Operations
In accordance with Moore's law (the observation that the number of transistors in a dense
integrated circuit doubles approximately every two years), the cost of computing - a critical
resource in the software development process, continues to fall. In addition to falling cost of
computers, is also the falling cost of communication & information gathering due to the
advancement of the Internet - the world largest computer network.
Falling cost of computing in US$
Cost of computing 1970 1999 2012
1 Mhz of processing power 7,601 0.17 0.01
1 megabit of storage 5,257 0.17 0.01
1 trillion bits sent 150,000 0.12 0.01
(Singh & Chair, 2014)
These two factors combined together will continue to result in a constantly reducing cost of
software development. At this point, the question that might come to mind is, "If computing &
communication cost continues to fall, won't software cost fall? And if software cost falls, will
software development still be a profitable venture?"
These questions are right to ask, and the answer is this "Software development will even become
more profitable as proven by historical trends and because the relevance and adoption of software
in our everyday lives will continue to increase".
Shown below are trends to justify the growing rate of software development companies; using two
major corporations founded in the 90's & the 2000's.

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Google founded in 1998 (annual revenue from
2002 to 2016 in billion US dollars)
(Statistica, 2017a)
Facebook founded in 2004 (Annual revenue
from 2009 to 2016 million of US Dollars)
(Statistica, 2017b)
Having seen that as computing cost & communications cost continues to reduce, so also have
software development companies’ revenue increased, thus proving beyond doubt the profitability
of software development.
Software development could be financed with the following sources of funds and result in better
yield. These possible sources of funds or means of funding includes:
a. Private Individual Investment Funding: private individual buys a stake in the software project
/ product
b. Venture Capitalist Funding: professional investors / investment firm buys a stake in the
software project / product
c. Crowd Funding: multiple individuals are convinced to buy a stake in the software project /
product
d. Direct Client / Customer Funding: The customer / client pays in advance for the software
prior to it being developed for instance Government / Private Contracts
e. Grants: Funding is received as grant from a government agency, an international organization
or a global corporation
3. Economic Benefits of software development
Software development process consists of several benefits to the different stakeholders or players.
But at the very core, the main benefit of software development is the developed software. Software

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has the following unique properties that makes it one of the most valuable items to be produced by
mankind:
Property Benefits
1. Intangible It can last forever & remain relevant with modifications
It can be modified at little cost
2. No physical
form
Ease of storage
Ease of learning compared to other engineering activities
Low cost of learning due to the fact that no special equipment needs
to be purchased
Ease of movement (can be transferred without any physical
movement)
Lower cost of protection from theft than other products
It can perform its function with little or no human supervision
It does not deteriorate with time but rather becomes more stable
3. Reusability The same software can be used multiple times
The same software can be reused in multiple products
The same software can be translated into multiple languages with
little effort
4. National Software Industry Strategies Of Other Countries
The table below summarizes the successful national software industry strategies of the three
countries that achieved billion-dollar software exports in the last decade.
Ireland
(started in early 1970s)
Israel
(early 1980s)
India
(late 1980s)
Resource English speaking
workforce.
Relatively cheap
telecommunications.
State-of-the-art
technology developed
in military R&D
Tens of thousands of
highly
trained, underemployed,
English-speaking
engineers.

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projects.
Strategic
Goal
Create jobs in Ireland at
all levels.
Commercialize military
Technology & create
export industry
Create export industry for
job creation and foreign
exchange earnings,
Opportunity
Targeted
Flow of US, Asian
technology into the EU.
Increasing demand for
software technology,
especially advanced
security technology
Shortage in US & Europe
of low-level programmers
created
by demand for ERP
installation
Key Government
Actions
Offer tax & other
incentives to
software companies
Create Yozma and other
industry investment
programs;
Invest in telecom &
computing infrastructure,
and quality certification to
establish credibility.
2001 Export
Revenue
1.3B US Dollars 3B US Dollars 7.5B US Dollars
(Hanna, Tessler and Barr, 2003)
5. Recommended Steps To Be Taken By The Nigerian Government
• Invest more in Electric Power, Communications & Computing infrastructure
• Incorporate learning of software development related courses in secondary schools &
higher institutions curriculum
• Review the curriculum of higher institutions annually to reflect new industry trends
• Curriculum* should be prepared in conjunction with practicing software developers
• Equip libraries with computers that could be used for practice purposes
• Create & encourage competition among software development firms & software
developers or software engineering departments of higher institutions
6. Conclusion
In our world today, some of the major applications of software include:

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• E-governance
• Financial Services
• Customer Interaction Services
• Business Process Management; Back
Office Operations;
• Accounting Services
• Insurance Claims Processing
• Medical Transcription
• Digital Content
• Online Education
• Data Management and Data Analytics
• Data Digitization/GIS
• Payroll/HR Services
• Web Site Services
• Legal Databases and Services
And this list continues to grow on a daily basis as the world progresses more into the fourth
industrial revolution which combines digital, physical & biological system. With this trend,
conventional job opportunities will be replaced by new job opportunities such as software design,
system analysis, software development, software testing, information security analysis, database
administrators etc.
If we fail to acknowledge this trend, our revenue will decrease overtime as we spend more and
more every year as a nation and as individuals importing infinite intangible software products and
related services from other nations.
References
Hanna,
N.,
Tessler,
S.,
&
Barr,
A.
(2003).
National software industry development: Considerations
for government planners. Retrieved from: http://www.aldo.com/publications/papers/
Singh, N., & Chair, S. S.A., (2014). Information technology and its role in India’s economic
development: A review. Retrieved from: https://economics.ucsc.edu/research/downloads/
Sommerville, I., (2006). Software engineering: 8th edition. China Machine Press
Statistica, (2017a). Google's revenue worldwide from 2002 to 2016 (in billion U.S. dollars).
Retrieved from: https://www.statista.com/statistics/266206/googles-annual-global-revenue/
Statistica, (2017b). Facebook's annual revenue from 2009 to 2016 (in million U.S. dollars).
Retrieved from: https://www.statista.com/statistics/268604/annual-revenue-of-facebook/