It all started in 2010. Intel built its $1 billion chip manufacturing plant in Ho Chi Minh city, Vietnam. Vietnam’s electronic manufacturing dream had arrived. Gone are the days of textile and food exporting. People were saying hello to a hi-tech Vietnam.
But later in 2011 and 2012, the dream was dwindling, as the economy was shot and there was an environment that didn’t play well for foreign investors, and that was turning people off.
The latter half of 2012 had seen a change, with electronics factories popping up and all the tech giants across the world have shifted their assembling and manufacturing plant to Vietnam. The reason being price competitiveness.
The main draw for the tech companies including Intel, Samsung and Nokia from Vietnam was the low labour wages. In some cases, Vietnamese workers could be paid as little as one-third of the Chinese labour costs. Cheap labour was Vietnam’s new brand.
Bangladesh now takes the mantle of “cheap labour” brand from Vietnam’s shoulder and time has come to take the tech products manufacturing business from Vietnam as well, the industry stakeholders at least believe so.
In the last year, for the first time the largest tech association - Bangladesh Computer Samity (BCS) in collaboration with the Information and Communication Technology (ICT) Division organised the BCS Expo - the largest exposition of the tech hardware in the country.
The theme of that expo was to promote “Made in Bangladesh” in the tech field. It’s true that one doesn’t often come across the tag “Made in Bangladesh” on any piece of technology, including computer hardware. Because, as a country, we are not hardware manufacturers - rather, we mostly import and, to a small extent, assemble.
That expo was supposed to be a stepping stone into the field of hardware manufacturing arena for Bangladesh.
Ironically, it was not.
The three day expo became a polished version of Laptop Fare, which too is usually being organised by the BCS, the platform which mostly comprised of seasoned computer hardware importers.
This year, the second version of that expo is going to take place from March 3-5 and the organiser, BCS, is hoping for a better outcome.
Admitting that the first one failed to play a significant role in promoting “Made in Bangladesh” at the tech hardware sector, the organisers this time said that the revolution will not take place overnight.
But they believed that it would take place soon.
The State Minister for ICT, Junaid Ahmed Palak however believed that the hardware revolution has already started. He said that the ground breaking ceremony of the two blocks in Hi-Tech Park took place at February 28. Two companies, one Sri Lankan and one Indian, have already signed an agreement to set up their hardware manufacturing plant in the Hi-Tech Park.
“More of such companies will come very soon to set up their plants. We are having negotiations with some of them,” Palak mentioned at a press conference after that.
Shyam Shundar Sikdar, Secretary of the ICT division said that Bangladesh will become the nest hardware manufacturing destination and he had no doubt about it.
When asked about the reason behind his string conviction, he came up with the answer - price competiveness.
In this free market economy, large corporations will go to those places which offer them the best business scope. “Bangladesh is now providing one of the best business scopes and it is one of the most attractive business destinations right now,” he said.
Referencing the latest survey of Japan External Trade Organisation (JETRO), he said that Bangladesh has continued to be an attractive destination for Japanese companies to do business due to its lower production cost and labour wage compared to those of 19 countries in Asia and Oceania.
The JETRO study said in comparison to Japan, the cost of production in Bangladesh is less than half, (49.5 percent), while it is 81.9 percent in China, 73 percent in Vietnam and 80.6 percent in India.
Bangladesh is far ahead of Vietnam, Sri Lanka, Thailand, and Pakistan on the cost indicator and is in a better position than Sri Lanka, Pakistan, Indonesia, Cambodia, India, the Philippines, and China on the labour wage indicator.
“Japan is one of the world’s largest tech hardware manufacturers. If they find us an attractive destination for their investment, then we can obviously become a hardware manufacturing destination like Vietnam,” Sikdar said.
He also said that aside from the manufacturing destination of global tech giants, Bangladesh could manufacture its own hardware and create a brand of its own. “Our Walton is a success story. People have accepted their products with open arms. We can create more Waltons,” he said.
Dr Liakot Ali, director of the Institute of Information and Communication Technology (IICT) of BUET however thinks that becoming a hardware manufacturer is not an easy task. “It needs a large establishment. The government needs to devise a policy for that.”
Dr Ali pointed out that as a country, “we are not hardware manufacturers, rather mostly importers. Some of our companies also assemble some products here.”
“Hardware innovation needs big investment and research facilities. Besides, it’s a competitive market. You can assemble or even manufacture a laptop, but that doesn’t necessarily mean that people will accept that, because there has to be a significant price margin as well as confidence among the people about your product.”
The BUET professor explained that the state-owned Telephone Shilpa Sangstha Ltd (TSS) had come up with a locally-made laptop named “Doel” just four years ago. “But people did not accept it as its battery life was not good. TSS, however, does have the facilities to produce computer hardware.”
“To be a manufacturer, you first need to provide significant amounts of money as grants for research and development so that you can come up with innovations. All the large hardware producers, such as Intel, Dell, HP, had a string of industry-university relationships, through which innovations occurred.”
The current and former presidents of Bangladesh Computer Samity (BCS) also agreed that to take the country’s computer hardware sector into the fast lane, there is no other way but to go in for industry-university partnership.
AHM Mahfujul Arif, the incumbent chief of BCS, and Faizullah Khan and Mostafa Zabbar, the former presidents, all said that there should be a strong relationship between the industry and universities.
Mostafa Zabbar, the founder of Bijoy Keyboard, pointed out: “All the greatest technological innovations in the world have occurred because of industry-university coordination. Without funding research and development activities in the universities, we cannot come up with new technologies, and without new technologies, we cannot have an edge in the competitive market of computer hardware.”