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Booming software industry to expand export earnings

  • Published at 12:16 am August 13th, 2017
  • Last updated at 12:25 am August 13th, 2017
Booming software industry to expand export earnings
Having gained experience and trust in the international market, the services of Bangladesh’s IT companies are now graduating from low value-added to high-end engineering and product development. Recently, a local firm surprised the government officials by developing an IoT software for a government organisation at a cost of Tk100 crore. If implemented by a foreign firm, it would have cost Tk500 crore. Despite the fact that local firms have the capacity to implement different government, World Bank and ADB-funded IT projects, foreign firms are still awarded the tasks, said industry insiders. They said local firms even cannot participate in the tenders due to conditions, particularly of having experience in similar projects, which the Bangladeshi firms lack. They asked how the local firms could gather experience unless rules are relaxed to give them the chance to participate in tenders and get the work orders. According to the industry people, local market can also be an attractive source of revenue earning of the IT firms along with grabbing the international market to reach the $5bn export target by 2021. Bangladesh Association of Software and Information Services (BASIS) is the top organisation in the country’s IT sector. Its membership data shows that the majority of ITO service providers in the country are specialised in Customised Software Development and IT Enabled Services.
A local firm surprised the government officials by developing an IoT software for a government organisation at a cost of Tk100 crore. If implemented by a foreign firm, it would have cost Tk500 crore
There are an estimated 400 companies that export IT services or IT Enabled Services mainly to the US, the UK, Canada, the Netherlands, Denmark and Australia. Besides, Bangladesh-based Eyeball Technologies has developed the Blackberry Playbook’s Video chat for BBM, for Research in Motion (RIM). Other companies such as SSD Tech have been developing mobile platforms for VAS for companies across two continents, while GraphicPeople has been creating promotional materials in multiple languages for the technology powerhouse Dell. The likes of Silicon Valley-based venture capital firms Fenox Venture Capital and 500 Startups have started making investments in the industry. Soon more global venture capital firms are going to start their operations in Bangladesh. A few local venture capital firms are formed as well to provide funds for the business ventures. One such firm is Bangladesh Venture Capital Limited, which encourages the young generation, especially students. Bangladesh has all the potentials to be the place for the next Google, Facebook, Skype, PayPal etc in near future, which were once backed by Angel and Venture Capital. CEO of Bangladesh’s largest job site bdjobs.com, Fahim Mashroor said: “No doubt, the use of ICT has increased enormously in the recent time. But a Digital Bangladesh can’t be built without depending our own technology. “In the last few years, we saw foreign companies took away millions of dollars from our industry.” CEO of Datasoft Systems Bangladesh Mahboob Zaman said now it is the fourth “industrial revolution” where ICT transformation continues. “If we can’t cope with this transformation, we will fail.” He said the government has no relation with the IT industry and global trend. “We will have to understand the trend, otherwise we will lose hundreds of crores of taka market. We need a coordinated effort with the stakeholders.” He laid emphasis on the high-end training to improve manpower skills. DataSoft has implemented the automation of Chittagong Customs House and provided IT solutions in land registration process. [caption id="attachment_152489" align="aligncenter" width="900"]1 Developers working at a local software making company, PreneurLab Courtesy[/caption] Last year, Dohatec successfully completed a project of employment generation for the poor under the Disaster Management Ministry. Later, they floated another project. Despite the previous good track record, it did not get the job. A USA-based company got the project. The National Board of Revenue appointed a foreign firm to introduce online value-added tax payment system at a cost of Tk551 crore. Luna Shamsuddoha, founder and chairman of Dohatec New Media, said the use of ICT is ubiquitous. “Policies during last seven years leveraged the digital universe to enhance growth in Bangladesh. Using the ICT for work, or education or life style, it is in the psyche of the citizens. Availability, awareness and impact is enormous.” Luna said: “Our annual budget has grown 208% in five years and the IT played a role.” Bangladesh has several e-governance solutions like voter enrolment with multi-biometric de-duplication of 80 million in 2007-2008, among which, the e-government procurement solution is known throughout the world. Export The government has set a target of earning $5bn from software export by 2021. It is optimistic about the target considering the growth trend. “The way the country’s ICT industry is growing, software export will reach $1bn by next year and $5bn by 2021,” said State Minister for ICT Division Zunaid Ahmed Palak. He said the exports emphasised the united efforts of the IT companies and freelance software developers to achieve the goal. According to Palak, Bangladesh earns over $100m from freelancing and another $100m from outsourcing while the software earnings amount to $700m. Although the current size of Bangladesh IT industry – software/ITES industry in particular – is still lot smaller compared to the overall economy and the number of population, over the last few years the industry has grown considerably and is expected to grow at that rate for some time. It is estimated that during the last five years the average yearly growth rate of software and ITES industry has been over 40%. The growth has been driven by both good export trends in recent years as well as the growing IT automation demand in domestic market (local demand has been led by large automation projects by telecommunication, banking sector and export oriented garments or textile industry). Manpower The global IT outsourcing industry has been growing steadily over the last decade. During the recent years, Bangladesh has made major strides in laying the groundwork for a diverse and successful outsourcing market. The IT services industry within Bangladesh has been growing serving international clients and domestic clients in all sectors. The industry is exporting services to European, North American and East Asian clients. Bangladesh’s emerging outsourcing players already have strong credentials. Bangladesh offers a vast pool of young, trained and English speaking resources – available at costs almost 40% lower than established destinations like India and the Philippines. There is evidence of many global players, like Samsung R&D, AMD, VizRT, Rocket Internet setting up operations in Bangladesh. The current IT/ITES industry profile of Bangladesh positions the country as fast emerging services outsourcing destination, currently capable of providing a comprehensive set of IT/ITES services exports. Today, it counts more than 1,500 registered IT/ITES service providers employing over 250,000 ICT professionals. The total IT/ITES revenue generated by the country reached approximately $600m for the period 2013-2014, with export revenue accounting for $250m, including the freelance outsourcing segment. It is no surprise then that global technology research house Gartner included Bangladesh in the top 30 outsourcing destinations in 2015. It also provides core banking solutions to nine banks, and services to more than 4,500 branches of 100 microfinance institutions. As of now, the company has delivered 847 projects, both private and public. At present the number of IT professionals in the country’s IT industry is over 70,000 while that of IT professionals working outside the industry including business enterprises, government and NGOs is over 35,000. Annually, a number of over 10,000 new IT graduates are adding to the job market.
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