In the last three and a half decades, the information technology industry has grown manifold in Bangladesh. Even though the first few years saw local companies only importing and selling computer hardware from abroad, the country eventually saw promising companies getting into making their own software and offering IT-enabled services.
Notwithstanding the last government’s slogan of “Digital Bangladesh” primarily being a political show, it created interest among the players of the industry, albeit for the wrong reasons. Many IT projects were undertaken, not necessarily for promoting efficiency and accountability, but mainly because of the easy cuts and kickbacks.
The commissions from IT projects were easier to misappropriate because of two reasons: One, there is still an obscurity surrounding computers, and most people, especially the seniors, feel intimidated by it; and two, there is no physical deliverables in case of software and services, and user-acceptances can easily be obtained by taking advantage of their lack of knowledge in the matter.
We now hear that hundreds of crores in Takas was spent in the last 15+ years to fund numerous bogus and ineffective IT projects. Most of these projects turned out to be unsuccessful and futile. These include sham training programs for freelancers, fictitious projects targeting female entrepreneurs, seed funding for unsuccessful startups, needless mobile-app building projects, etc. These fruitless projects not only misused public money, but also corrupted the IT industry.
The barriers to progress
Bangladesh’s IT industry now faces several challenges that could hinder its progress:
Infrastructure issues: While improvements have been made, the country still grapples with inadequate infrastructure, including unreliable internet connectivity and power supply, which can impact the efficiency of IT operations. The digital divide is apparent not only between the urban and the rural areas, but also between the rich and the poor. Digital illiteracy is still high among the relatively senior citizens, which is an impediment towards delivery of digital or online services.
Skill gap: Although there is a large pool of young talent, there is still a wide gap between the skills taught in educational institutions and the actual needs of the industry. Continuous training and upskilling are necessary to keep pace with rapidly evolving technologies.
Regulatory environment: The regulatory framework for the IT sector can be complex and sometimes lacks clarity. Inconsistency and instability of policies deter investment. Streamlining regulations, ensuring continuity of policies, and providing a more conducive business environment could encourage further investment in industry.
Competition: As Bangladesh positions itself as an outsourcing destination, it faces stiff competition from other countries like the Philippines, Vietnam, and Sri Lanka. To maintain its competitive edge, Bangladesh must continue to innovate and improve its service offerings. Unfortunately, the services offered from Bangladesh are of low value that are quickly being replaced by Robotics Process Automation (RPA) and Artificial Intelligence (AI). It is high time that the focus needs to be shifted from “cheap labour” to “quality.”
Lack of innovation: There is hardly any plausible research and development (R&D) activities in Bangladesh. The universities suffer from lack of research funds. On the other hand, the companies are complicit and are not encouraged to spend on R&D, as there is no strict IP or copyright protection law in effect. The education system is also based on traditional pedagogy that does not inspire innovative thinking.
Many IT projects were undertaken, not necessarily for promoting efficiency and accountability, but mainly because of the easy cuts and kickbacks
The promise of IT
With the young demography, Bangladesh does have an enormous potential to become an IT hub of the region, if not the world. A country where land resources are scarce, this is an opportune industry that does not require vast amounts of land for building factories. With just a laptop and a good internet connection, a person can earn millions and contribute to the economy, while sitting in a small space.
This profession also allows remote work that is suitable for many including those who have responsibilities at home or are physically challenged. People can take up multiple gigs and earn extra while maintaining a good work-life balance. In addition to that, the BPO businesses can rapidly accommodate a large number of employees by providing them with short-term training. That is a quick-fix for the looming unemployment problem in the country.
Considering the above-mentioned scenario, the following measures must be taken as early as possible:
Invest in emerging technologies: To keep Bangladesh ahead in the competition, the IT companies should be encouraged to invest in emerging technologies, such as artificial intelligence, machine learning, and blockchain. This can open new avenues for growth and innovation that will increase revenue by offering high-value services, and help Bangladeshi companies stay competitive in the global market.
Collaborate with international firms: Fostering partnerships with international firms is necessary to provide Bangladeshi companies with access to new markets, technologies, and expertise. This can help Bangladeshi IT companies expand their reach and enhance their capabilities.
Support startups: Growth of the startup ecosystem in Bangladesh needs to be reinforced by providing funding, mentorship, and resources to tech entrepreneurs. The venture capital firms may be offered tax incentives for investing. At the same time, related laws need to be revisited for uncomplicated exit for the VCs. This can attract new investors, foster innovation, and create new job opportunities in the IT sector.
Focus on sustainability: As global awareness of sustainability grows, the IT industry in Bangladesh can play a crucial role in developing green technologies and solutions that contribute to environmental conservation. This can help Bangladesh position itself as a leader in sustainable IT practices.
Improve infrastructure: Addressing infrastructure issues, such as unreliable and overpriced internet connectivity and power supply is essential. This can help the IT companies remain competitive in the international market and attract more foreign investment.
Investigating the reasons for the digital divide is an urgent need. Despite the phenomenal reduction of bandwidth price, the cost of transmission by the Nationwide Telecommunication Transmission Network (NTTN) providers has not decreased; rather it has increased in many ways. Without addressing this issue, eliminating digital discrimination among the urban and rural areas will not be possible.
Satellite internet via VSATs should be permitted with an appropriate license for connecting to internet from anywhere anytime. This will create a paradigm shift in tele-medicine and remote education. The telecommunication policies need to be updated to allow active infrastructure sharing instead of building redundant networks and wasting resources. All intermediaries must be eliminated to reduce the price of internet to the end-users.
With the young demography, Bangladesh does have an enormous potential to become an IT hub of the region, if not the world
Continuous training and upskilling: Continuous training and upskilling of IT professionals is important to bridge the skill gap to match the actual requirements of the industry. This can help Bangladeshi companies offer cutting-edge technologies and stay ahead of the curve and adapt to rapidly evolving market demands.
Academia-industry partnerships: The longstanding miscoordination between the industry and the academia has created unwanted unemployment problems among the educated masses. While the tech companies desperately search for competent workers, paradoxically thousands of university graduates with degrees in technology related subjects remain jobless. The reason is that the students who graduate from the universities lack skills, even though they have the knowledge. Very often academics refuse to provide skill training to their students and only focus on imparting knowledge.
In this world of competition, Output Based Education (OBE) is necessary to stay ahead. The fresh graduates have to undergo three to six months of skill training before they can become employable. This is a waste of human resources that cannot be allowed if Bangladesh wants to reap the full benefit of the demographic dividend of the young working population. Therefore, the skill development components must be included in the academic curricula, so that the students become employable immediately after graduation.
Research incentives: Without research and development, the nation will never be able to create its own intellectual property (IP). With the imminent expiration of World Trade Organization’s Trade-related Aspects of Intellectual Property Rights (TRIPS) on January 1, 2033, Bangladesh must take adequate measures to prepare for the post-TRIPS regime. R&D at the academia should be encouraged and the private sector should be given incentives for spending on R&D. Matching government grants may be given to complement the effort.
Revision and formulation of laws: The Copyright Act needs to be enforced. Innovations get discouraged without protection of intellectual property. A new law on data privacy must be introduced as quickly as possible. This will not only protect the citizens’ rights and privacy, but also will allow new businesses, such as cloud-based medical database services, to grow. Categorizing data is necessary to mandate sensitive data including citizens’ personal information to be stored within the geographic territory of Bangladesh.
The fourth industrial revolution is bringing new technologies in many applications. Future crimes will be based on these new technologies. Hence, the new types of crimes should be covered and addressed in the Digital Security Act, which must anyway be revised by amending and balancing the clauses that suppress free speech while protecting citizens from getting harassed.
While formulating these laws, the focus must be on safeguarding the citizens’ rights and facilitating businesses, not controlling or policing on the citizens.
Local value-addition: All foreign procurements of hardware, software, and services must have local value-addition. This will not only facilitate knowledge and skill transfer, but also will ensure easier and cheaper maintenance of the procured items in the future. In case of hardware, all government projects should require the supplier to assemble the equipment in Bangladesh. Software and services must involve local engineers during customization and implementation. Future agreements with the donor agencies or with other governments, in case of G2G projects, should make local value-addition mandatory.
G2G technical assistance: A significant number of Bangladeshi IT companies have earned valuable experience in designing, implementing, and maintaining large projects. A few successful examples are the driving license and vehicle registration systems for BRTA, the Hajj management system for the government, Tier-4 data centres, Electronic Government Procurement (eGP) system, etc. These companies are competent enough to offer similar projects in other countries.
Bangladesh government should enter into agreement with governments of other under-developed countries where these projects can be replicated. The agreement will ensure a grant by Bangladesh for this kind Technical Assistance (TA) with a condition of implementation of the projects by Bangladeshi companies. This way the money will come back to Bangladesh while the Bangladeshi companies will gain experience in completion of foreign projects which subsequently will enhance their credibility in the international market.
Sustainable projects: The current FY budget should be revisited and amended by eliminating superfluous projects. Instead, allocation should be raised for the sustainable ones and the ones that will bring long-term benefits. Assigning larger budgets for skill development, research incentives, G2G technical assistance, etc. will be of continuing and lasting value.
Bangladesh has the potential to emerge as a significant player in the global information technology industry. However, government support is pivotal in shaping the IT landscape of Bangladesh. With inadequate internet quality and less than 50% penetration of smartphones, the potential is at risk of going wasted. Without making digital citizens, IT businesses will not flourish. With a robust infrastructure citizens even from the remotest upazilas and thanas can start contributing to the country’s economy.
Syed Almas Kabir is an Entrepreneur, IT industry evangelist, policy advocate.
