Currently, Busan Metropolitan City is under the economic depression. To solve these problems, this study attempts to provide strategies for building local IT policies, especially for vitalizing software industry. Firstly, it analyzes the trends and basic status on the Busan software industry. Secondly, case studies by S/W policy initiators are conducted, and followed by empirical studies including in-depth interviews from government officials, researchers, and businessmen in Busan metropolitan city. Finally, it provides policy alternatives and strategies for building the local S/W development policies including the role and necessity of S/W industry in vitalizing the local economy, improving financial capacity of local governments, reorganizing of relationship among different levels of governments, and the possibility of integration of policy instruments and organizations.