Bangladesh is 52 years old, yet digitalisation emerges as a key tool to change the fate of the 8th most populous nation. Ready-Made Garments (RMG) and remittance are two top sectors that contribute to the nation’s GDP and frequently compete with other global players like China and India. However, the ICT industry of Bangladesh is simultaneously evolving to compete with leading nations in this sector, and we can have high hopes that it is leading the country to be the new IT hub of South Asia.
IT Sector of Bangladesh: Then and Now
The Bangladeshi IT industry began exporting software after hopping on the business process outsourcing (BPO) train in the 1990s. Many of them have now expanded their businesses to include the export of computer programmes. Bangladesh holds a significant position in the international online labour market. According to the report done by the World Bank and Oxford Internet Institute (OII), Bangladesh is second in terms of online workforce. The outsourcing sector generates at least $500 million for about 650,000 skilled freelancers who have never been to the US or the UK but have served clients in these countries. Fifteen billion BDT has been invested in eleven high-tech (IT) parks that are already open. The digital economy was valued at only $26 million in 1998. However, it has already surpassed $1.4 billion per annum. By cultivating qualified human resources, the state hopes to increase ICT exports to $5 billion by 2025 and ICT industry employment to 3 million by developing skilled human resources. According to Russell T. Ahmed, President of the Bangladesh Association of Software and Information Services (BASIS), the IT sector has the potential to become the country’s third economic motor, following RMG and remittances. The country’s IT industry may be worth approximately $30 billion by 2031.
According to the most recent Global Location Service Index, the country ranks 21st for IT outsourcing and is the second largest producer of IT freelancers worldwide. ICT has contributed 1.28 per cent to the country’s GDP and created more than 300,000 jobs. The products currently being exported in the software sector are – website development and design, mobile apps, games, application platforms, VoIP applications, data entry, graphic design, pre-press, digital design, support services, customised application development, maintenance, etc.
How does the state support the ICT industry?
Bangladesh made its global debut as a digital nation long ago. However, Building Digital Bangladesh has been a timely and necessary endeavour in the overall growth and accessibility of the nation. It is commendable that the state and its people are adopting several initiatives to stimulate the information technology sector and further its development. The government has already waived all taxes on the IT sector until 2024 to foster its growth. For instance, if a person exports software, he will receive a 10% incentive apart from obtaining the tax waiver. At a high level, efforts are being made to formulate policies that reduce corporate tax on the use of domestic software while increasing taxation on the use of foreign software. Such policy decisions will propel the expanding IT industry forward.
ICT’s role in empowering people and reducing unemployment
The information and communication technology (ICT) industry has been hailed as a national benefit for reducing unemployment and promoting economic development. In addition, it generates a substantial quantity of foreign currency that bolsters the national economy and foreign reserves. On top of that, the youth unemployment rate is alarming, and most of Bangladesh’s population comprises youth.
To understand the crucial role played by the ICT sector, let’s explore the larger picture of unemployment. It is estimated that more than 2 million people enter the labour market every year in the country. Only 5% of the country’s workforce is employed in the public sector (government, autonomous, or local government), and the rest of the 95% is in the private sector. As a result, after completing higher education, most of them wait years for government jobs. According to the International Labour Organisation (ILO), the youth unemployment rate in Bangladesh is presently 10.6%, more than double the national unemployment rate of 4.2%. According to the study, the World Bank assessed university students, finding that 46% of graduates searching for work for three years are unemployed. According to the survey by ActionAid a few years back, over 46% of recent university graduates are unemployed. In another study conducted by the British magazine Economist’s Economist Intelligence Unit (EIU), 47% of graduates in Bangladesh are unemployed, compared to 33% in India, 28% in Pakistan, 20% in Nepal, and 7.8% in Sri Lanka. Based on these data, it can be presumed that approximately two million young adults who enter the workforce each year are unemployed university graduates. Due to the Corona epidemic, the number of highly educated unemployed people has increased. For the same reason, the job market is contracting, no new workplaces are being created, and layoffs have increased in old companies. Hence, the ICT industry has vast potential to address this issue and compete with other countries.
Equal involvement of men and women, enabling access to technology for all regardless of wealth, and narrowing the gap between urban and rural access to services were the primary aims and goals of our Digital Bangladesh. Through the execution of programmes such as the Union Digital Centre, inclusive growth in Digital Bangladesh has made it feasible for internet access to reach distant communities. It has also secured the employment of female entrepreneurs. Thanks to inclusive development and technology, anybody may now perform freelance jobs from their rural home.
Challenges for the IT Sector
Regarding the ICT sector, accessible and high-speed internet is needed to foster the industry. There is a large room to improve the issue. According to a report by Okla, an international organisation that measures internet speed, Bangladesh ranks 136 among 140 countries in the world regarding mobile internet speed. However, Bangladesh ranks 96 out of 175 countries regarding broadband internet speed. Earlier, Ookla published a report named ‘Speedtest Global Index’ to determine the rate of mobile and fixed broadband internet in a country. As per the report on mobile internet speed, the average download speed in Bangladesh is 10.57 Mbps, and the upload speed is 7.19 Mbps. Among neighbouring countries, Bangladesh is behind only Afghanistan at number 140 regarding mobile internet speed. African countries like Uganda, Somalia, Sudan, Zambia, and Ethiopia are also ahead of Bangladesh regarding mobile internet speed. The report says that the broadband internet speed in Bangladesh performs better than mobile – with an average download speed of 33.54 Mbps and an upload speed of 33.96 Mbps. Regarding broadband speed, Bangladesh ranks better than neighbouring countries – Sri Lanka, Nepal, Maldives, Bhutan, Pakistan, and Afghanistan. However, to compete in the ICT industry, high-speed and accessible internet must be ensured nationwide to compete with leading players like India, the Philippines, Vietnam, Pakistan, and others.
Capturing the IT market requires more skilled workers, and sustaining it involves quality. There are entrepreneurial initiatives to help enhance this sector. Besides, more challenges at different levels of operation must be identified and addressed through proper channels for a more positive impact. We are travelling relentlessly along a motorway of information technology. Our track record of achievement in this industry can be a source of pride and satisfaction in the upcoming days. With the state and its people’s collective efforts, Bangladesh can be a solid IT Hub of South Asia that certainly keeps the nation ahead in the global economy and geopolitics race and empowers its inhabitants.
Author- MD Talebur Islam
