Home ›› 02 Sep 2022 ›› Front
Bangladesh’s export earnings from computer-related services – which include software, IT enabled services, consultancy and equipment maintenance – nearly doubled to $592 million in FY22, thanks to circumstances triggered by the Covid-19 pandemic, and cash incentives.
The country’s export earnings from this particular sector rose by 94.91 per cent when compared year-on-year, shows data from the Export Promotion Bureau (EPB).
Of the earnings, the highest $484.40 million came from computer data processing and hosting services – widely known as IT Enabled Services or ITES, which is a 123 per cent increase compared to $217 million recorded in the previous year.
Bangladesh earned $60 million from computer software exports, compared to $51 million in FY21, and $38 million from computer consultancy services. It also earned $10 million from installation, maintenance, and repair of computers and peripheral equipment services.
In FY22, Bangladesh earned $2 billion from exporting goods. The government has set a target to earn $5 billion from exports through this sector by 2025.
Reasons behind robust growth
A number of industry insiders and experts credited the stellar export growth of computer services to the Covid-19 pandemic, as it created a big demand for IT enabled services among people who needed to work remotely.
Government cash incentives against exports of IT services also boosted overall earnings.
“The outbreak of Covid-19 pandemic led to an inevitable surge in the use of digital technologies due to social distancing measures and option to work remotely,” Managing Director Shameem Ahsan of eGeneration – which works for an American company – told the Business Post.
He added, “With a massive surge in pandemic, business organisations and corporations across the world were forced to introduce new ways of work and life. It gave a big push to the IT enabled services.
“The development in technology use which was expected to happen in 10 years, happened in two. This helped this sector earn more from exporting IT services. Besides, cash incentives offered to exporters encouraged entrepreneurs to export more software and services.”
Currently, exporters of IT and ITES are enjoying 10 per cent cash incentives.
Raisul Kabir, co-founder and CEO of the Bangladeshi software company Brain Station 23 Ltd, said, “We recorded a 50 per cent increase in software exports in FY22, compared year-on-year.
“The export earnings came mostly from software solutions like e-commerce software, healthcare software, ERK software, and custom software development. Most of our clients are small and medium organisations located in the Netherlands, Denmark, UK, Canada and US.”
He continued, “We are currently developing software for Japan. The prospect of our country’s software industry is big, and we can take the advantage of our demographic dividend to further expand the industry.
“We get a good number of skilled human resources to meet our demand, when compared to other countries.”
Industry insiders say exporters prefer to bring money through the formal channel to enjoy cash incentives, and a huge number of Bangladeshi youth are working remotely for foreign companies.
Fahim Mashroor, former president of Bangladesh Association of Software and Information Services (BASIS), said, “Previously, the exporters in the industry did not repatriate earnings through the formal channel. But now they are doing so because of the cash incentive.
“The repatriation process of export earnings has eased, and monitoring has been strengthened. On top of that, the number of technically sound young people, who prefer to work remotely, has increased sharply. As a result, the exports rose sharply as well.”
Exporters claim earnings exceeded $592m
Industry insiders say the export earnings from this sector exceeded $1 billion in FY22, but this figure was not reflected by the official data due to the lack of a proper mechanism for data collection.
BASIS President Russell T Ahmed said, “Our actual export earnings are more than the recorded figure. The figure was not recorded properly as the money comes from multiple channels. As the government began offering 10 per cent incentives to us, the earnings began coming through the recorded channels, and the posted data comes from there.”
“The potential of software exports has doubled as it was supposed to be. It will be growing faster every
year provided that we can do our jobs properly.
"Software and IT sector is the only sector which has the most potential in terms of exports.”
How to sustain this growth?
Right now, the key challenge in this sector is the lack of proper infrastructure and skilled manpower. Moreover, financing and marketing is crucial to explore new customers.
Shameem Ahsan of eGeneration said, “The education system in our competitor countries such as India witnessed good development in line with the global needs. We should be farsighted as well, and the education curriculum should be designed to cope with such demands.
“We have to encourage our children so that they can start learning to code and other IT-related skills from childhood.”
BM Mainul Hossain, associate professor at Dhaka University’s Institute of Information Technology (IIT), said, “Software and IT enabled services industry is growing faster, and the service industry is also diversifying.
“Utilise the academia to provide computer and IT students with a foundation for engaging in this industry.”
He continued, “Still there remains a gap between academia and industry, and collaborative initiatives can be in place to properly harness the scope. The industry should make those graduates efficient as per requirement.
“The government is taking many initiatives to create fast track future leaders, but it is the industry which will utilise the human resources. Academic curriculum can be revised accordingly with time, but it should not be too frequent.”
Mainul then said, “We are demanding that the industry be included in human resource development
initiatives, as we know which type of skills are required for this particular. The results will be better once a bridge is created between academia and industry.
“The software and IT companies are taking fresh graduates as interns, and providing training for each one for 3-6 months. Then they can be used in their respective tasks.”
He added, “A comprehensive or consolidated plan involving the government, the academia and the Industry must be formulated.
Only then our target to achieve the $5 billion mark will become viable.
BASIS former president Fahim Mashroor said, “The companies do not want to employ fresh graduates, as in most of the cases they are not ready for the industry. A gap is clear between academia and the industry.
“So, if any company hires a fresh graduate, the government can offer an internship allowance for the employee or provide at least 50 per cent – 60 per cent of the salary for one year.”
