Bangladesh: your next outsourcing destination

When Prime Minister Sheikh Hasina declared the vision of Digital Bangladesh on December 12, 2008, the ICT industry experienced its rebirth. Later, the government declared December 12 as Digital Bangladesh Day.

The industry has seen an exponential growth in the last decade, especially in the last four to five years.

While the export revenue from this sector was only $26 million back in 2008, it crossed $1.4 billion in 2021. Only 300 software companies and 50,000 people worked in this industry in 2008. Now, one million people are working.

Under the umbrella of the Bangladesh Association of Software and Information Services (BASIS), there are 1,700 plus companies and the number has been almost doubled in the last five years. Besides, there are so many startups, call centre companies, e-commerce platforms, and emerging digital device manufacturing and assembling companies. All these are making Bangladesh a proper hub for ICT ecosystem.

Rashad Kabir

The government has also ensured numerous support for the sector. It has declared 100 per cent tax exemption for the IT and IT-enabled service (ITES) companies until 2024. A proposal has already been given by the BASIS to extend it up to 2030.

The government has also kept the provision of 100 per cent profit repatriation and on top of that, the companies are enjoying a 10 per cent cash incentive for IT/ITES export.

Besides, we have seen an introduction of a lot of training programmes countrywide by the government to develop beginner, mid-level and high skilled IT professionals. Every year, 20,000 computer science and engineering graduates are produced from the public and private universities.

For the first time, we have also seen a bold step in order to develop resources as part of preparation for the Fourth Industrial Revolution (4IR). The government has planned to launch Sheikh Hasina Institute of Frontier Technology to develop resources in the field of artificial intelligence, blockchain, internet of things (IOT), cybersecurity and other 4IR technologies.

Development of market ecosystem, policy support and the capability of the ICT companies have made Bangladesh an attractive destination for ICT outsourcing. Now the question is: how much of the attractive market can Bangladesh grab?

The global ICT market was valued approximately at $556 billion in 2020 and is expected to reach $937 billion by 2027. Still, the software development, web development, application support and management, mobile application development, technical support, help desk, graphics design, and image processing are the dominant areas for ICT outsourcing.

The ICT industry is taking steps to grab this attractive market. One of the potential markets is Japan.

According to the Japan International Cooperation Agency, there will be a shortage of 500,000 qualified engineers in Japan by 2025. If Bangladesh can supply one fifth of the total requirements through ICT outsourcing model, it will be a game-changer for the economy of Bangladesh. 

The BASIS, the apex trade body for the ICT sector, has established the Japan Desk to promote ICT services in the Japanese market. Within one and a half years of the launch of the desk, it has already received good response from the Japanese counterpart.

After the success story of the Japan Desk, the BASIS is now planning to establish four more desks in four continents. One will be in the US, one in Europe (either the UK or the Netherlands), one in the United Arab Emirates, and one in Africa. The introduction of the desks will certainly lift Bangladesh to the next level.

But in order to achieve the $5-billion export target by 2025, setting up ICT desks will not be enough. The government and the ICT industry should take a holistic approach to achieve the target.

Country branding is still a crucial factor and the government must focus on it. Bangladesh needs to arrange regular seminars, fairs and roadshows to promote the ICT industry and its capability.

Apart from offline media, it's high time to use online and social media as well. We need to make promotional videos and video clips highlighting the success stories of our ICT companies.

Another key brand promoter of our industry might be our non-resident Bangladeshi community. It's a very proud matter for Bangladesh that many Bangladeshis are now working in many top companies in the US and Europe. Our ICT industry can utilise them to penetrate the market.

The example of India can be cited here. Many Indians are working in C-level positions in global companies, and whenever there is any requirement for software, they are straightway giving this opportunity to Indian IT companies. Bangladeshi NRB community can also follow the strategy of India and can help the country.

Another key market that Bangladesh should target is Africa and the countries that have just started their digitalisation mission like Bhutan, the Maldives, Uzbekistan, and Fiji. 

It's a great advantage for Bangladesh that it has started the journey of implementing the e-governance service in 2009. Right now, there are 100 plus companies specialised in offering e-governance services.

Countries like Nigeria, Cameroon, Ghana, Rwanda and Kenya have begun their digitalisation process. If Bangladesh can take a government-to-government approach and promote the solutions that are already running in various ministries and departments in Bangladesh, there is a very good chance that Bangladesh can grab the market of the countries.

Another important step that the ICT industry should not forget is to prepare for the 4IR. It's true that the outsourcing projects that we are getting are still related to conventional technologies. But in the near future, there will be a time when we will get most of the projects in the areas of artificial intelligence, blockchain, IOT, or Big Data. If we can't make our companies competent for those technologies or can't develop skilled human resources, we may lose the market.

The recent efforts of the government and the industry have already made Bangladesh an attractive ICT outsourcing destination. We have already walked a long path. Still, there is a long way to go. If the government and the industry work closely together and take the right step in the right time, our dream will no longer be a dream; rather it will become a reality.

The author is a director of the BASIS and the managing director of Dream71 Bangladesh Ltd.