ICT State Minister Zunaid Ahmed did not mince his words in a pre-“Biztech B2B Conference” at the Bangabandhu International Conference Centre on May 08, 2016: expand the ICT (information and communications technology) market to $5 billion by our 50th birthday anniversary. Not for the first time, ICT news have opened up inquisitive eyes and ears across the country. The prime minister’s ICT Adviser, Sajeeb Ahmed Wajed (her son), has often talked about not only establishing a “digital Bangladesh,” but also taking it to “the doorsteps of everyone.”
There is perhaps more than captures the daily headlines about a sector one can see, feel, and breathe across Dhaka City: ICT classes, programmes, training centres, and software enterprises litter the metropolitan; and though the city may not ever enter a Silicon Valley Internet search result-list, that there is some kind of a hub filled with low-keyed (as opposed to Silicon Valley savvy) software specialists and counterpart contraptions is distinctive. What are the prospects of this becoming a dynamic future hub?
Though Dhaka University boasted a computer mainframe from as early as 1964, the real thrust began a stone’s throw away in Bangladesh University of Engineering and Technology’s (BUET’s) Department of Computer Science and Engineering from 1982: a Bangla version emerged five years later, by 1995 software that could be exported began, and in 1997 the Bangladesh Association of Software and Information Service (BASIS), which co-hosted the May 21, 2016 Biztech B2B Conference that was alluded to, was established to deepen upper-level student education.
The government recognised its potential immediately. Based upon a recommendation of the Committee of Expert of Software and Data Processing Services, tax-holidays were extended; training in universities was expanded; and, in 2009, the Awami League government formulated the National ICT Policy, with extensions to cover “education, science and technology, infrastructural development, employment generation, private sector development, agriculture, health and nutrition,” then planned for an “e-governance” application through the Sixth Five Year Plan, and promoted “Digital Bangladesh.” A January 2014 Nyenrode Business Universiteit report, “ICT Sector Study in Bangladesh,” captured and elaborated these highlights, further spelling out the Dutch and Danish partnerships, the former through the Netherlands Trust Fund II and the latter through the DANIDA (Danish International Development Assistance) programme from 2003.
From a 2012 BASIS survey, that report also disaggregated the different types of programmatic enclaves: customised application development attracted the most of BASIS member companies (76 per cent), IT-enabled services (ITES: 50 per cent), e-commerce and web services 45 per cent, while lesser attention was given product development (18 per cent), mobile application/content provider (17 per cent), and system integration (11 per cent). Mansur Ahamed’s 2014 report for the Japan-Bangladesh Business Centre (JBBC) specifies that 160 firms outsource these services, with the United States, United Kingdom, Canada, Australia, Denmark, the Netherlands, and Germany being the top export markets sought by these companies, in roughly that order of imports. It went on to say, with an average employee salary of $200 monthly, this sector’s global competitiveness could easily climb with greater global visibility. If we take the foreign exchange earned in 2012-3, for instance (just over $100 million), which was almost four-fold higher than in 2006-7, we clearly see how much more lies in store with proper planning and extra production. This is more strikingly evident with the phenomenal annual export growth rate: from -3.44 per cent in 2006-7 to 7.44 per cent in 2009-10, thence to 43.53 per cent in 2012-3, it exposes how, though slippage is possible, but more so, why growth is embedded.
Opportunities can be tapped by exemplifying the Bangladesh-Dutch trade arena from the Nyenrode report: Bangladesh was able to meet half the Dutch import needs (in web design, mobile application development, and customised/web application development); while there were areas Bangladeshi technicians could tap into later: customised software, cloud computing, and system integration.
How do we begin this task? Of the 1000+ registered software and ITES firms the JBBC report found, 705 had BASIS membership in 2014, earning Tk 7.90 billion (790 crore) from software and Tk 10.50 billion (1050 crore) from ITES production. With the domestic market growing over 20 per cent annually, it is not surprising two-thirds of BASIS companies feed the domestic demands, including increasing corporate needs (in RMG, textile, pharmaceutical firms), cultivate banking and financial dependence, attract ministerial engagement, and solicit educational inputs. Even foreign firms have established bases in Dhaka: Samsung from South Korea, VizRT from Norway, Rocket Internet Benelux from the Netherlands (along with seven other Dutch companies).
Here we see the need to both expand for the sake of expansion (groom more software specialists), and build additional incentives for foreign prospectors to come. Once controlled, the ICT sector offers huge job-outlets for high-skilled graduates and specialists, and particularly as the number of graduating students keep spiralling at all levels, with schools, colleges, universities booming and global connections spiralling. In short, the playground for a “Digital Bangladesh” is here, with immense scope considering how much more higher education can be expanded in the country. Only the scarcities and trip-wires need to be eliminated. If possible, hopes of the “Digital Bangladesh” champion, Wajed, to increase Business Process Outsourcing (BPO) earnings to $1.0 billion in five years, eventually to $3.0 billion by 2021, much as it has expanded from $4.0 million in 2008 to $130 million today.
While the JBBC report sees Bangladesh as a future offshore destination for foreign ICT companies (and the Nyenrode report encourages ICT export possibilities), much depends on the domestic setting. As this series, and many other discussions in this and other newspapers and reports indicate, our energy and infrastructural deficiencies can erode much of our ICT advantage (as they can the promise of other viable sectors).
In short, the ICT sector is pregnant with possibilities. If that is its key advantage, its key constraint is a shortage of skilled personnel. As both dimensions attract scrutiny, the ICT sector (a) reaffirms both backward and forward linkages, carrying all kinds of externalities and internalities; (b) reiterates the need to uplift and strengthen our social overhead capital, not just for energy needs, but also ICT networking; and (c) presents itself as the proverbial tortoise (one industry) on the way to overtaking all other hares (other industries in the same sector globally, or other industries in the country) in the race for long-term pre-eminence.
While ICT deserves continued consideration as a Plan C star industry (that is, for a developed, post-industrial Bangladesh), it might find competition from an unknown but comparable post-industrial sector: fashion. That is where the series heads next.
Dr Imtiaz A Hussain is Professor, International Relations, formerly Universidad Iberoamericana, Mexico City.