"By providing nations such as Ecuador with affordable tools, Java technology has given them something they have never had: the ability to finance up front expenses with little to no capital."

It hasn't always been easy to find a shiny star on the dark horizon of the Ecuadorian economy. Traditionally, Ecuador's heavy dependence on a handful of exports (primarily agricultural products and, since the 1970's, oil) has sent the country through boom-and-bust cycles that have left few winners.

Worse still were the prospects of climbing out of the economic black hole into which Ecuador had fallen. Like most of the Third World, Ecuador's developmental model had historically been faced with a Catch-22 - the ability to generate capital was dependent on being able to compete on a global level, however, competing on a global level was often contingent on having access to capital and the latest technologies. Enter Java and Linux. In the midst of an ongoing economic crisis, the rapid dissemination of open source software programs has become a major force in kick starting the laggard Ecuadorian economy.

The Linux Miracle

Created in the early nineties by a group of renegade programmers who wanted to create a highly stable, free alternative to expensive software developed by larger multinational giants such as Microsoft and IBM, Linux is currently the world's most widely used open source operating system. The fundamental idea behind the program is simple: allow users to have open access to quality, yet affordable, software programs that can be run on low cost pc systems. However, the implications of this philosophy in countries like Ecuador are much more profound than perhaps even Linux's creators could have imagined. Over the past years, Linux has allowed the governments, citizens, businesses, schools, and doctors of the developing regions of the world to have access to information and technologies that have long been out of their reach upon which their development relies.

As the Operating System helps to resuscitate economies from the Southern Cone to the Texas border, its spread throughout the region appears to have no end in sight and with good reason. As James Hill notes,
"The market for Linux is not just rooted in necessity, but also in history. More developed Latin American countries like Mexico, Brazil, and Argentina use domestic and open source technology to give their people the tools and education to compete with the rest of the world. Those nations are attempting to buck the historical trend that led to their dependence on Britain and the United States for factory and railroad equipment in the industrial revolution. They are working to become peers in the new world information economy, instead of merely a source of low-cost industrial labor. Since Linux is open source and not tied to any company, it is the ideal operating system to help such nations build an independent future."

As a result, IDG estimates that by the year 2003, thirty percent of the region's computers will be running on Linux and many North American consumers will have begun to switch from programs such as Microsoft to Linux.

Java Jolt – from Agricultural Economy to Internet Economy

Java is a programming platform developed by Sun Microsystems which is openly available for free use. An extremely powerful and scalable, yet affordable, open end platform, Java has been one of the most dominant forces behind the explosion of the Internet economy worldwide. However, unlike similar systems offered by such companies as Microsoft, Oracle, and IBM, Java is available to its users free of charge, thus affording small businesses and organizations, particularly in developing nations, access to programs and technologies which would otherwise be unattainable. In doing so, it is powering smaller economies worldwide by allowing them to compete in markets hitherto controlled by the world's more developed nations. Ecuador is no exception. Traditionally, the Ecuadorian economy has been blessed with a cheap supply of labor but cursed with the capital needed to use its labor force to for competitive startup companies. However, with Java, Ecuador and many nations just like it are finally beginning to realize their economic potential. By providing nations such as Ecuador with affordable tools, Java technology has given them something they have never had: the ability to finance up front expenses with little to no capital. As a result, Ecuador has begun to compete in software development with nations such as Russia, India, and the Philippines that have dominated the field in recent years. And as increased Internet access makes remote software development a more practical developmental solution every day and Java growth flourishes, Java promises to continue to boost Ecuadorian exports indefinitely.

Java and Linux Breathe Life into the Ecuadorian Economy

While providing Ecuador's next generation with the access to the technologies and information necessary to compete in the global marketplace, Linux and Java have given a boost to the nation's more competitive non-traditional exports while giving birth to its most recent: the booming software technology field.

Ecuador's comparative advantage has always been its cheap labor costs. For over a century, cheap Ecuadorian labor has attracted foreign investors in search of a low-overhead location in which to harvest raw materials or, more recently, manufacture crude products. However, with the arrival of the affordable access to technology that Linux and Java provide, Ecuadorian entrepreneurs have finally been able to accomplish something that has long eluded them: spawn native, high-tech companies that can compete on a global scale. As a result, within a decade the nation has gone from being an oil exporting, former banana republic to the one of the region's leading software manufacturers. Ecuadorian software enterprises currently export their products to Microsoft, the U.S. Navy, and a host of nations. Some of the more notable firms are:

MetaMorf - One of Ecuador's leading Java software exporters is currently exporting java based web applications for companies and organizations in Silicon Valley and Washington DC. The CatGen platform, which they are developing for the non-profit organization PeopLink, is an international catalog generation and e-commerce system designed for SMEs in developing countries. The project has the support of organizations such as E-bay, United Nations, InterAmerican Development Bank, and several international Fair Trade organizations.
Multisoft – In 1996 this Ecuadorian software mogul won a bid with the U.S.-based NCR which allowed them be the sole provider of software technologies for the ATMs on U.S. aircraft carriers and other medium-sized ships.
Macosa – Formerly a distributor of NCR, Macosa opened shop in Ecuador in the early 1990s during the industry's push away from proprietary systems and towards open source systems. Since then, Macosa has exported software to 60 financial institutions in 11 Latin American countries.
Decision – Another Ecuadorian giant in the banking software industry, Decision is part of the consortium that provided the Bolivian banking system with some of the most advanced software of the region, thereby making Bolivia's banking clearing house the first in Latin America to have electronic signature verification.

In a recent study conducting by the McConnell International LLC consulting firm, analysts noted that, "These [economies such as Ecuador's] represent fabulous opportunities for businesses getting in on the ground floor of this next phase of development."

However, the Linux and Java generated boom has gone far beyond the realm of software production. By allowing small businesses and aritsans to have access to the latest technologies and tools of ecommerce, Linux and Java systems have connected small producers to clients worldwide in a way that would might have never been possible. As a result, NGOs such as PeopLink are able to "put the power of global ecommerce directly into the hands of Fair Trade artisan organizations all over the world" and small agricultural producers are able to increase sales by responding directly to the needs of their clients.

Futhermore, existing corporations and organizations are using Java running on Linux systems to develop IT infrastructure and strategies that will make them and/or save them millions in the long run. A perfect example is Ecuador's IRS. The organization's web systems were developed by MetaMorf in the Java language and run on Linux. The cost of the system (including hardware) was a paltry USD 100,000 and they made a full return on their investment within one week of installing the billing system. "An ROI like that is almost unheard of in the first world, but due to the combination of powerful open source tools and low labor costs available in Ecuador, stories like this will surely be repeated," says MetaMorf's CEO Jason Halberstadt.