Next Export Front-Runner

Bangladesh’s potential to take the lead in ICT is booming with the support of artificial intelligence



By Enamul Hafiz Latifee

Published: Thu 16 Dec 2021, 6:07 PM

The last two years have been an acid test for Information and Communication Technology (ICT) in Bangladesh, with the sector faring comparatively well amid Covid-19 pandemic that suddenly shattered businesses last year. The sector has achieved $1.3 billion export earnings in FY 2020-21 with near to 100 per cent domestic value-addition holding US$1.4 billion equivalent market share in the local market earnings. This has led to a contribution of 0.76 per cent to the GDP, creating more than one million employment opportunities in Bangladesh so far. Consequentially, riding on the successes of IT/ITES sector-supported export-led industries as well as pro-private sector and conducive policies pursued by Bangladesh Government, the country is now poised to become a Developing Country by 2026, as recommended by the United Nations Committee for Development Policy (UNCDP). Bangladesh now seeks to transform itself into a knowledge-based and 4IR-driven cashless economy, aiming to become a developed country by 2041.

The ICT sector has set a target to reach the $5 billion export earnings threshold by 2025. To achieve the target progressively, the ICT sector stakeholders and the government are working hand-in-hand. Being the national trade body for software and IT enabled services industry of Bangladesh representing more than 1,700 IT/ITES firms, BASIS is tirelessly working for making Bangladesh a Shonar Bangla as our Father of the Nation, Bangabandhu Sheikh Mujibur Rahman envisioned, under the charismatic leadership of our Prime Minister Sheikh Hasina. Besides, we have seen a surge in the number of ICT freelancers that recently reached five hundred thousand, receiving $150 million export earnings just through single international payment gateway, turning Bangladesh into the second ranked ICT freelancer supplier in the world, providing ICT outsourcing services such as, image processing, customer support, software development, business processing and management outsourcing including non-verbal BPO, telemedicine, medical transcribing, customised website development, and mobile application development.

However, the World Economic Forum tells us that 4IR-induced end-to-end automation of a supply chain in tandem with the Covid-19 recession has created a ‘double-disruption’ scenario for workforces. In addition to the existing disruption from the pandemic-persuaded lockdowns and economic shrinkage, technological adoption by businesses will transform jobs, tasks, and skills by 2025 and so on. Meanwhile, on the other hand, the Covid-19 pandemic has expedited the advent of fourth Industrial Revolution (4IR). There is no doubt that the technologies of 4IR will enhance productivity and efficiency. If Bangladesh does not want to get left behind in the world development trajectory, it must embrace and take full advantage of the benefits of 4IR by adopting the appropriate technologies which the government has started working on by initiating 'Post Covid-19 National ICT Roadmap: Overcoming the Challenges and Leveraging New Opportunities for ICT Industry.'Human resource skilled in 4IR technologies, such as, artificial intelligence, internet of things, distributed ledger, blockchain, machine learning, big data warehousing and analysis, cloud computing, augmented reality and virtual reality will be required to materialise 4IR, especially, to retain productivity and competitiveness at the global stage following the LDC graduation, while Bangladesh will also be facing a full implementation of WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, export cash incentive withdrawal. Furthermore, in the backdrop of the ongoing talks on introduction of tariffs on electronic transmissions, a wide range of IT/ITES sectors may get covered. This may create a newer dimension of trade and economic diplomacy to the international IT/ITES trade if implemented. So that, domestically, a strategic overhaul of the education system is essential as the 4IR will put existing repetitive jobs at risk because of automation.

In this situation, the only way to remain competitive in the global market is to become more cost-efficient in transboundary trades and deploy high-yielding technologies, featured by highly productive human resources. Bangladesh now needs to fly high in terms of negotiating bilateral free trade agreement or sign comprehensive economic partnerships with major trade partners that could reap benefits for exporters, importers, consumers, local and foreign investors through promising tariff and non-tariff advantages. Additionally, there is also a need to reform the revenue collection provisions by pursuing a more liberal and reciprocal approach. A recent study by 'Aspire to Innovate' said that, by the year 2030, almost 50 per cent of industrial jobs on average might be at risk with 60 per cent in RMG sector, 35 per cent in leather sector and 20 per cent in tourism sector as an adverse outcome of the implementation of 4IR incase new avenues are not created and existing plus new human resource pools are re-educated to cope with the new situation. So, to rehabilitate the jobless, up-skilling and reskilling programmes must be undertaken as early as possible, besides, an entrepreneurial mindset has to be created among the young generation equipping them with next level ICT skills, which will enable them to immediately integrate with the global freelance marketplaces and earn through IT/ITES exports. As neither all workers are ready to be up-skilled, nor will all of them be required for the job, reskilling them in a different trade will serve their purpose. For example, the displaced RMG workers may be trained in caregiving or nursing and can be placed in the health sector, where there is an acute shortage of such service providers. There has to be a national strategy on this.

While addressing the matter of ICT sector human resource availability, we need to note that Bangladesh roughly produces 22,000 graduates annually in the field of computer science and engineering. To achieve the goal of becoming a key export-oriented industry, the ICT sector needs additional one million professionals. This is a major challenge given the current STEM (science, technology, engineering, and math) educational infrastructure set-up of the country — an increase in the fiscal allocation is a must to overcome this. Side by side, foreign direct investments can be attracted in STEM education with the coordinated effort of government and private sector. We firmly believe that an ICT-sector friendly government would certainly address this matter soon.

Moreover, the gap between academia and the industry has been a long-standing matter here. The universities must step forward and incorporate real-life scenarios as well as provide hands-on training programmes in their curricula, so that the students become employable as soon as they graduate. Moreover, Bangladesh’s advantage of being a young nation will be there only for the next two decades, after which the median age of the country’s population will be in the region of 40’s. Nevertheless, Bangladesh is now dubbed as a 'Development Miracle' and has become widely known as the 'Land of immense opportunities.' Recently, the UN-sponsored Sustainable Development Solutions Network (SDSN) has conferred Prime Minister Sheikh Hasina with the ‘SDG Progress Award’ for Bangladesh's steady course in responding to the universal call to action to end poverty, protect the planet and ensure peace and prosperity for all, which surely makes us optimistic about the future of Bangladesh and the advancement of ICT sector as an integral and embedded part.

To recall just a few, the country is offering 100 per cent tax exemption for export oriented IT/ITES, no obstacle is given in 100 per cent profit repatriation for FDI makers, 10 per cent cash incentive has been there on the export earnings in IT/ITES, the financial stimulus package is non-discriminatory between local and foreign-owned IT/ITES businesses, a recently created startup fund is there to support innovative business firms and the government is considering to initiate a Research and Development Fund soon among other constructive and farsighted strategies. With this note, we invite the world business community for exploring the rewarding business potentials that the ICT sector is ready to offer.

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


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