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Online freelancing in Bangladesh: Constraints there, potentials overriding

  • Published at 08:13 pm April 25th, 2021
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A research team from IFPRI, Oxford University and Florida International University finds enormous potential of income generation for rural youth

An international research on online freelancing in Bangladesh has found the field’s exciting potential for improving the incomes of poor youth in rural and peri-urban Bangladesh.

While a limited number of available job opportunities in urban centres may reduce the benefit of policies that encourage rural-urban migration, this research sees enormous potential of ‘virtual migration’ by training rural youth in Bangladesh to become online freelancers, enabling them to export their labour services to a global online marketplace.

A copy of the policy note, based on this ongoing research, that Dhaka Tribune obtained also identified some of the constraints that online freelancers face in Bangladesh.

“Bangladeshi youth located in urban centres are doing well in the global marketplace. In this pilot project, we demonstrate the exciting potential of online freelancing for improving the incomes of poor youth in rural and peri-urban Bangladesh. We also highlight the constraints to this type of work: financing constraints for the high training cost, access to the necessary work infrastructure, and communication skills to succeed in the market,” M Mehrab Bakhtiar and Abu Shonchoy, two Bangladeshi economists working on this project with a team of researchers from University of Oxford told Dhaka Tribune on Sunday.  

M Mehrab Bakhtiar, currently deputy country representative of Bangladesh of the Washington-based International Food Policy Research Institute (IFPRI) and Abu Shonchoy, Assistant Professor of Economics at Florida International University, also added, “Online freelancing has a very steep learning curve, and most trainees drop out of training programs. The design of training programs, particularly, those being formulated in the government-funded high-tech parks in several districts, should incorporate mentoring services that will allow for intensive interactions between students and mentors during and after the formal training period.”

“A four-to-six-month long post-training internship with a small stipend can be enormously beneficial in preventing drop-out of low-income students and can help them become successful in the online marketplace,” they recommended.

Apart from Mehrab and Shonchoy, the research – Microequity and Mentorship for Online Freelancing-based Microentrepreneurs in Bangladesh – is being jointly carried out by Simon Quinn, an associate professor, and Muhammad Meki, lecturer at the University of Oxford’s Department of Economics and Department of International Development, respectively.

Since early 2018, these researchers, in association with local collaborators, MOMODa Foundation, Creative IT and Gana Unnayan Kendra, worked with rural youths in Bangladesh’s Gaibandha district in exploring the potential for training and financing virtual migration. Through an ‘action-based’ research design, the team set up a ‘freelance incubator’, that provided the necessary workspace and infrastructure, specially, high-speed internet connectivity and computers to train rural youth in Bangladesh to become online freelancers. Close mentoring was also provided to participants to assist in navigating the competitive online marketplace.

They began the pilot in January 2018, implementing it in two waves. In the first wave, they proceeded with providing the youth with detailed training program (as well as offering some people a loan to finance the program cost). Then they observed that, while the students were indeed acquiring some useful technical skills (specifically in graphics design), their communication and marketing skills were likely to inhibit their ability to succeed on the competitive online marketplace.

That’s why, the researchers decided to include, in the second wave, an extended post-training internship with trainers, which would provide additional support to the students in navigating the online marketplace, and in particular, building up their online profiles, and securing jobs through successful bids and effective communication with clients.

The research collected data on student performance throughout the pilot, and also went into the field two years later (summer 2020) to explore longer-term outcomes for the participants.

Researchers worked in collaboration with a large IT company from Dhaka (CreativeIT) and recruited participants from local tertiary colleges in Gaibandha as well as using advertisements in social media. Some 373 students applied to the program(across the two waves), out of which 126 passed the minimum computer literacy screening exam.

Surveys conducted during the pilot revealed that several of the trainees had started to earn relatively large sums of money on the online marketplace at the end of the training and internship program.  Reassuringly, the performance improved over time as the researchers refined the structure of the internship and optimized the mentoring and assistance in the bidding process (in the online marketplace) for students.

In July 2020, the researchers conducted a long-run follow-up survey on their sample, (by re-contacting 86% of their original sample of 109 individuals). They found that 33% were actively engaged in freelancing work, earning on average USD90 per month from freelancing-related activities.

“In our sample, freelancer.com was the most used online marketplace, followed by fiverr.com and upwork.com,” said the research note.

Constraints and policy implications

In response to the researchers’ query about major constraints they face, the freelancers cited access to reliable internet as the topmost challenge, followed by access to a well-functioning computer/workstation, English language skills and electricity.

The pie chart in this report shows the distribution of the main constraints, as reported by respondents.

The researchers have found out that the online freelancing has great potential but the transition from freelancing students to income-earner is not smooth.

“It requires financing the significant program cost, takes time to bear fruit (with a large proportion of people not succeeding in earning), and there are a number of constraints”, reads the policy note.

“Our pilot study demonstrated strong technical skill acquisition, but significant challenges from communication skills, particularly, in terms of English language and marketing skills, and infrastructure, an appropriate work environment, reliable electricity, and high-speed internet.”

Importantly, the research team highlighted the importance of a long-term support system that budding online freelancers need to become successful.

“Most people who try out online freelancing drop out because of the long time it takes to start earning from the online marketplace, even after finishing a training program.” That’s why continued intensive interaction between students and mentors and designing training and post-training programs accordingly, is so very crucial.

The researchers believe that there is potential for many young rural poor to earn income from online work, but more research is needed on how one can overcome the significant barriers they face related to financing, soft skill requirements, and more structural challenges such as access to necessary infrastructure.

Mehrab, Shonchoy and their team’s research is being carried out with an Exploratory Research Grant (ERG) of Private Enterprise Development in Low-Income Countries (PEDL) run by the Centre for Economic Policy Research (CEPR) in association with the UKaid.