Home ›› 21 May 2022 ›› Front
The Software and IT-Enabled Services Industry has been expanding rapidly with an aim to become another pillar of strength for export earning besides RMG.
The web-enabled services have for the current fiscal year earned $ 1.4 till January from abroad, thereby holding a huge potential to be tapped.
According to the sector people, the ICT-driven export is likely to exceed the earnings of the garment sector in the next 10 years.
The computer-based services include producing website design and development, gaming apps, mobile apps, VoIP apps, data entry, graphic design, pre-press, support services, digital design and maintenance, customised apps, etc.
The government has established IT labs in schools and colleges, Hi-tech parks, software technology parks, IT centres, helping the industry grow faster.
Around 6.5 lakh IT intellectual workers have contributed to the swelling export basket.
Some 2,000 ICT farms are currently listed with Bangladesh Association of Software and Information Services (BASIS) while around 350-400 companies are exporting IT-enabled services to more than 30 countries, BASIS president Russell T Ahmed told The Business Post.
“The US is the highest importer of our IT products and services while the UK and Japan come in second and third respectively. Even India outsources IT services from Bangladesh,” he said.
“Our export market is around $ 1.4 billion and our target is to hit $ 5 billion mark by 2025.”
In the current Fiscal Year 2022, ITES export earnings stood at $ 1.4 billion till January while it was $ 1.3 billion in FY21, $1.25 billion in FY19, $1 billion in FY18, $ 800 million in FY17, according to the BASIS.
“BASIS has focused on five strategies to attain the export target. The strategies focus on human resource development, policy linking, industry promotion, startup ecosystem and branding Bangladesh globally to draw more investment,” argued the BASIS president.
“Alongside outsourcing services, we are locally working for the government digitalisation schemes starting from e-governance projects, and at the same time for the private sector.”
Bangladesh, according to a recent study by the Oxford Internet Institute (OII), has come up as the second-largest supplier of online labour with 16 per cent share trailing only India which has a 24 per cent labour share.
Currently, Bangladesh has around 650,000 IT service exporters or freelancers, with roughly 1,600 team-based freelancing organisations. The market size of the local ITES is now around Tk 10 billion.
“The country’s software industry has a huge potential and is growing faster every day. So, we will not be solely dependent on RMG, we can get into the ICT-driven export coming out of only the RMG-based export. Hopefully the exports of IT services will exceed the earnings of the garment sector in the next 10 years,” expected Russell.
“ICT should not be viewed in terms of export volumes. It pervades every sector and contributes to their revenues. Besides, ICT will grow with every sector that will come into being in the days to come.”
“We have some potential sectors like fin-tech, health-tech, f-tech, etc. which are all our targets and they are coming from both home and abroad.”
Wahid Sharif, president, Bangladesh Association of Contact Centre and Outsourcing (BACCO) said, the organisation was launched in 2009 when only 8-9 companies used to work while now it has more than 250 members. 60,000 direct employment opportunities have been created.
The Global Business Process Outsourcing (BPO) market is more than $ 500 billion, of which India claims $ 150 billion, Philippines $ 30 billion and Sri-Lanka $ 8 to $ 10 billion.
Bangladesh’s total IT and IETS stand at $ 1.4 billion, of which $ 400 to $ 500 million come from BPO.
“We are yet to eke out only 1 per cent,” said the BACCO president.
“The sector has expanded and we have much more scope to grow. The ICT policy has given clearance to outsource the government’s customer care services, so there is no bar, but those government ICT services are making up only 20 per cent to 30 per cent while the remaining 70 per cent to 80 per cent should be brought from local IT workers,” said Wahid Sharif, also managing director of Digicon Technology Limited.
“Our banks, financial institutions, insurance companies are not buying that much IT services from local farms or freelancers. If they did, they could brand Bangladesh’s ICT industry that would also get work from abroad.”
“Our human resources are strong enough to give services to any organisations. If our people can do work for foreign companies, we can do the same work for our domestic firms. If our local freelancers get work from home, it can be a reference to getting work order from foreign enterprises.”
“Skilled human resources are our key challenges. We are receiving a large number of people and ICT graduates but they are not ready to add value to the IT industry,” Wahid Sharif said, adding that the government is providing various training programmes but more such trainings should be in place.
“We have a huge crisis in mid-level managers. IT farms have to hire those managers from abroad.”
“To support resource development, BASIS has planned to revive the BITM, a human development centre from BASIS which certifies qualified resources,” said Russell, also founder CEO of ClassTune.
The academia is not responsible for producing graduates targeting any industry; rather the industry and the government will make them skilled in accordance with their demand based on the industry needs, said Dhaka University IIT Professor Dr BM Mainul Hossain.
“We have 4G but the speed it could reach has not been created yet though we are preparing for 5G. We have only 12 Mbps while the Arab Emirates has 200 Mbps for an example. Video streaming needs 20 Mbps, 4G can do. As we are developing in data digitalisation, more data would be created,” opined the academician.
“After 5G is introduced to the ongoing Fourth Industrial Revolution, when the internet of things (IoT) will be all-across, skilled IT professionals, especially big data analysts, will be needed. We have to prepare for that, create an efficient human resource base,” predicted Mainul.
Discomfort lies in the sector
Industry people say banks don’t want to give loans to IT farms; complicated banking transactions with having no PayPal – globally popular online payments system – slow implementation of hi-tech parks, getting government incentives under the existing labour law.
“We have so many alternatives to PayPal. If PayPal comes in, it is good. But money earned online come through regular banking channels including Shadhin and Payoneer,” said BASIS president Russell.
The existing labour law came into being before the industry existed. The law does not match with the industry. People working in the IT industry do not fall under the category of physical labour. They are giving mental labour which is not defined in the law.
“Register maintenance is not needed in the ICT farms. There should be a new law, and until that, the IT industry should be exempted from the existing law,” argued Wahid Sharif.
Asked about bank loans for ICT farms the BASIS president said: “IT farms get loans but BASIS is sincerely working on the issue to ease loan sanction for the companies.”
“We provide a soft loan up to Tk 50 lakh for BASIS members. We are working with one or two banks like Prime Bank and the number of banks is increasing.” The government has been providing 10 per cent cash assistance against the export of ICT products or services since 2018 and companies are enjoying tax holiday till 2024.
“Our listed companies now receive 10 per cent incentives and freelancers 4 per percent incentives for exports,” said Russell.
“BASIS is working together with the ICT Division to extend the facilities up to 2030 and has formed a research body to explore new destinations for Bangladesh’s IT products.”
According to a BASIS circular, the Apex ICT trade body has given input in the formulation of “Intellectual Labour Law” to be enacted soon.
