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Netherlands-Bangladesh ICT fraternity: Connecting the dots

Enamul Hafiz Latifee, and Md. Mominul Islam
26 Dec 2022 00:02:06 | Update: 26 Dec 2022 00:02:06
Netherlands-Bangladesh ICT fraternity: Connecting the dots

The opportunity to explore the future market for up-taking the digital endeavour is a must to embrace. The worldwide business in the technology sector is experiencing its strongest economic boom since the ‘dot.com’ era, with the global IT professional services market forecasted to grow at a compound annual growth rate (CAGR) of 11.2 per cent from 2022 to 2030 registering US$1.93 trillion by 2030 and the global IT outsourcing market predicted to increase at a 9.1 per cent CAGR till 2030 reaching US$525.2 billion then. Market expanding forces are working positively in favour of digital services, products, and solutions-- indicating to be a perfect time for grabbing the growling opportunities.

The Netherlands ICT market dynamics

Speaking of the Netherlands-- is known for its strong and innovative information and communication technology (ICT) sector. There are more than 80,000 enterprises in the ICT sector of the Netherlands. In 2019, the government, and families spent a combined US$21 billion on ICT goods, while they spent over US$48 billion on ICT services. The country is home to many large international companies in the field, as well as a thriving start-up culture. The Dutch domestic ICT market is considered to be highly competitive and dynamic, with a strong focus on research and development. The government has also made significant investments in the ICT sector, helping to support its growth and competitiveness. Netherlands is also known as the leading data centre hub in Europe.

Bangladesh: The ICT-driven trillion-dollar economy by 2035

Bangladesh’s ICT service export earnings registered US$608.1 million in FY2021-22 excluding the export earnings of telecommunication services, a whooping increase by 100.2 per cent from ICT export earnings of US$303.74 in FY2020-21.

This historical year-to-year record growth can be observed as an ‘ICT revolution in the export front’ of Bangladesh, since at the beginning of this year, Hon’ble Prime Minister of Bangladesh Sheikh Hasina declared ICT as the ‘product of the year’ to boost exports of this sector and responding to that, BASIS rightly addressed seven priority areas to work on, which are, i) making human resources future-ready, ii) developing foreign markets, iii) developing local industry, iv) increasing access to capital and fiscal incentives for ICT firms, v) creating a thriving ecosystem for ICT startups, vi) formulating policies to help grow intangible assets, and vii) promoting the ICT industry being funded by the government but implemented by the private sector.

If the current pace of ICT industry continues our forecast suggests that Bangladesh will become a trillion-dollar economy by 2035 leapfrogging towards SMART Bangladesh sooner than planned emphasizing four pillars—i) SMART Citizen, ii) SMART Government, iii) SMART Society, and as a whole the iv) SMART Economy taking innovative young minds and productive human resource pool at the central point.

Presence of Bangladesh in the Dutch ICT Market

The Netherlands is Bangladesh’s 4th largest source of FDI in the ICT sector and its 5th largest export market. Our findings in connection with Bangladesh Bank data tell us that 21 IT-ITES companies exported a total of almost US$7.5 million in FY2020-21. In contrast, the Netherlands imported roughly US$8.3 billion worth of ITES from abroad in 2019 indicating that Bangladesh could bite a tiny share of the Dutch domestic ICT market. In FY 2021-22, 25 ICT firms’ exports to the Dutch market increased to US$9.32 million—still an insignificant market share and not much encouraging when compared to the average growth of IT-ITES sector.

However, at least, this indicates, ICT exporting opportunity to the Netherlands is gradually increasing (24.27 per cent increase in FY 2021-22) and if the obstacles are addressed a big jump in export earnings from the Dutch market can be seen.

Rethinking innovativeness and redesigning skills

When we are talking about the Dutch market, we can see, Netherlands is the 5th most innovative country in the world according to WIPO’s ‘Global Innovation Index 2022’ while Bangladesh ranks 102nd. Also, in INSEAD’s Global Talent Competitiveness Index 2022, Netherlands ranks 6th where Bangladesh is placed 122nd, far behind many peer countries even-- posing a big question to improve the seven pillars of assessing innovation capabilities— i) institutions, ii) human capital and research, iii) infrastructure, iv) market sophistication, v) business sophistication, vi) knowledge and technology outputs, and vii) creative outputs.

The Dutch government is extremely serious about digital skills, so that, the Dutch Growth Fund committee made EUR€80 million available for a National Artificial Intelligence Education Lab, where innovative digital applications for education will be developed while respecting public values. An additional sum of EUR€63 million has been earmarked to scale up promising prototypes in 2020. Overall, the Netherlands is considered to be one of the leading countries in Europe for the development and adoption of new technologies. So, the big entry of Bangladesh there would mean creating cascading opportunities to tap the entire European market.

However, since more and more ICT experts are needed in the digital transformation, the labour shortage also increases-- 6 percent of the positions of ICT experts are not occupied in the Netherlands at this moment. The top skills required in the Netherlands market are related to AI, data science, cyber security, GIS, drone-cobot functionalities, EdTech and Health Tech.

Meanwhile, the ICT industry in Bangladesh employs 0.3 million people, and the government has also focused on training and education programs to ensure that there is a sufficient supply of skilled resources to meet the needs of the sector. In addition, the government has encouraged the development of start-ups and entrepreneurship in the ICT sector by planning to implement 92 Hi-Tech and Software Technology Parks across the country. Bangladesh has prepared herself for grabbing future opportunities by spreading out the broadband internet facility, uninterrupted electricity, mobile network, and mobile financial services even to the remotest part of it.

All of this has helped to foster innovation and creativity which is now required to be pushed to the next level. 53 Govt. Universities, 109 Private Universities, 3 International Universities, & 49 Government Polytechnic Institutes are producing 22,000+ ICT graduates per year. As graduates from Statistics and Mathematics domains also add value to the industry by pursuing ‘Data Scientists’ as a career option due to the rising tide, so, in numbers, human resource supply to the industry is quite satisfying, but, despite taking many government projects, mismatch in the skills required by the international market remains a challenge still.

Connecting the dots: Organizing more B2Bs and exchanging delegations

To connect investors and partners, explore business opportunities, and draw foreign direct investment, ICT Division and Bangladesh Embassy in the Netherlands launched ‘Bangladesh IT Connect Portal-Netherlands’ to mark the golden anniversary of bilateral relations between Bangladesh and the Netherlands—an appreciable initiative and steppingstone for the future. As Bangladesh looks to achieve a US$5 billion IT-ITES export objective by 2025, this platform will act as a catalyst for establishing business ties with IT enterprises of two nations if private sector and related trade bodies of both countries can be brought into this online platform as the implementing agencies.

Regular exchange of delegations led by the private sector is required as there is no alternative to building business relationships, meeting people in person and rebranding Bangladesh as the next ICT powerhouse in the Netherlands. Bangladesh government should consider mobilizing its export promotional budgetary allocation to this activity with a view to making it successful.

Establishing the ‘Netherlands ICT Focus Group’ under govt.-private partnership

The biggest weakness of Bangladeshi exporters is a lack of business networking in the Dutch market and international market exposure, followed by, fewer efforts of rebranding the human resource cost vs value addition and efficiency propositions of Bangladesh ICT industry in the Netherlands, also obliviousness to the Dutch cultural-legal-standards-compliance matters.

To recall a success story of a similar initiative at this point, it is to be said that a specialized country focus platform called—BASIS Japan Focus Group is comprehensively moving forward with the technical support of JETRO and JICA, and guidance of BCC and BHTPA, which is playing an unprecedented role in exchanging Japanese business culture to Bangladeshi ICT business communities, hosting delegations, also helping them with finding the right partner for the ICT firms of both countries.

For creating a broader impact, a specialized ‘Netherlands ICT Focus Group’ requires to be established with an initial 5 years long financial support from the government (Ministry of Commerce, BCC, and BHTPA) in creating a window office of this focus group in the Netherlands, the day-to-day tasks of which will be taken care by a secretariat formed with the joint efforts of the leading ICT trade organizations—BASIS, BACCO, BCS, E-CAB, and ISPAB. Once it is successfully rolled out, a B2G level Digital Business and Investment Forum and G2G level ICT Joint Working Group can be established for strengthening the ties and extending cooperation between the Netherlands and Bangladesh.

Enamul Hafiz Latifee is a Policy & Trade Economist, Joint Secretary (Research Fellow), Bangladesh Association of Software and Information Services (BASIS). He can be reached at [email protected] and viewed at www.ehlatifee.com.

Md. Mominul Islam is a Research Associate, BASIS. Can be reached at, [email protected].