MANILA, Philippines--IT parks in Asia are much more focused on services rather than creating intellectual property, especially software, according to the Business Software Alliance (BSA).

A study by the Economist Intelligence Unit, commissioned by the BSA, covered Cyberjaya in Malaysia, Dalian Software Park in China, Nankang Software Park in Taiwan and Quang Trung Software City in Vietnam.

Silicon Valley in the United States remains the acknowledged model copied and replicated by IT parks established in countries like Israel, Ireland and India. The four above-mentioned Asian IT parks, however, have had a different experience.

One of the advantages of these software parks is that start-up firms benefit from the low rent and tax breaks available, the study noted.

However, these Asian software parks have had limited success becoming the innovation hubs they were envisioned to be, according to Jeffrey Hardee, BSA Asia Pacific vice president and regional director.

"Tenant companies are more inclined to focus on outsourcing or software services, rather than creating new innovative products," Hardee said in a written article sent to INQUIRER.net.

This scenario, more or less, also applies to state-recognized IT parks in the Philippines, dominated by business process outsourcing or BPO locators. Government tax incentives are often been cited as a big come-on for investors.

But such a focus may pose long-term growth issues and increase vulnerability to global economic fluctuations, Hardee noted.

"Part of the reason is the poor levels of intellectual property protection that makes international companies reluctant to locate their core research and development in these countries, thus creating a barrier to innovation and technology transfer," he said.

One of the critical findings of the EIU study is that parks do not promote software in the same manner as they did in hardware manufacturing, where Asia has tremendous success over their Western counterparts.

In software, Hardee noted developers need access to dynamic and vibrant environments where ideas, capital and people move quickly. "Isolated parks in remote locations away from the commercial areas do not lend themselves as attractive locations for such talents," he said.

Hardee added: "It is thus more important to create an overall environment in a country with positive factors that encourage innovation, rather than creating physical parks to stimulate the software industry."

Another factor, the study noted, is creating an attractive investment environment to encourage the growth of entrepreneurial firms, as exemplified by Silicon Valley.

Governments are most effective "when creating and enforcing a legal and policy framework that prevents anti-competitive behavior and reduces business uncertainties," the study said.

But for many Asian countries, the software industry is not yet a major contributor to the economy, according to Hardee, although he noted India's $47.8 billion IT-enabled business and likewise growth in North Asian countries like Korea and Japan.

"The rest of Asia can similarly grow successful software industries, but fundamental changes need to be put in place--liberalized telecommunications, better intellectual property protection, more attractive investment environment, and a technology-neutral approach towards government policy," he said.