Yes, invest more in open source. No reason these days for developing countries to be paying huge fees/taxes to proprietary software companies.

Experiment with the Salman Khan learning style - invert lectures and homework. Eg, have students watch lectures at home (from MIT OCW, Stanford, Berkeley, Khan Academy, etc), and devote class time to implementing, practicing, doing. Get rid of large boring lectures, replace them with more time in guided labs/sessions. Learning programming is all about doing, and the one advantage a University can offer over self-learning is mentoring by professors and a quicker instructional feedback loop. Leverage that.