Japan’s software industry, which has seen growth running at an annual rate of nearly 30% over the past several years, is in crisis and facing a whole string of bankruptcies. Reporting from Tokyo, the Jiji Japanese press agency comments that while demand for qualified engineers remains high, the companies that overexpanded in expectation of continued economic growth must now come to grips with the contraction of the economy. The wire service quotes findings by Teikoku Data Bank Ltd that 37 software companies became insolvent in the first six months of the Japanese fiscal year to September. This half-year figure exceeds the 33 bankruptcies in all of fiscal 1990, it notes. Teikoku analysts told the wire service the bankruptcies were generally down to slumping mainstream business rather than excessive financial speculation. Orders for new software development projects dropped as the economy slowed and corporate earnings slid, says the press agency adding that small- and medium-sized software houses have been devastated by the fall-off in orders from banks and stockbrokers.
