Softwares and ICTs Industry in Bangladesh

Current Status of Software and ITES Industry in Bangladesh

Bangladesh has identified ICT as a "thrust sector" as it represents potential for successful reforms, job creation, industry growth and high spillover effects to other sectors as well as improving governance and facilitating inclusion. The current World Bank's Country Assistance Strategy for Bangladesh also recognizes the key role of ICT in supporting Bangladesh’s growth, competitiveness and governance agenda. The Information Technology (IT) Services, and IT-Enabled Services industry presents an attractive segment worth USD 475 billion that countries are competing for.

The ICT industry in Bangladesh, especially software and ITES industries, is relatively small compared to the size of its national population (150 million plus), and the size of the national economy. However, the software and ITES industries in this country have started rapidly growing in recent years. The average yearly growth rate of these industries here has been over 40 per cent for recent five years, and this growth rate is expected to continue. This optimistic growth is supported by good software export trends and large demand for IT automation in domestic market. Recently in Bangladesh, large-scale automation projects have been widely implemented in the sectors of telecom, banking, finance, pharmaceutical, and garment/textile industries. Domestic demand for software and ITES industries is expected to increase more.

As of now, there are close to 500 software and ITES companies are registered in Bangladesh. These companies employ over 12,000 local ICT professionals. The size of the ICT market excluding telecom in Bangladesh is estimated to be US$ 300 million in total; the software and ITES industries share 39 per cent (US$117 million) of the market. More than 100 companies export their products to over 30 countries. The major export market is North America, but recently many IT companies started export to EU countries and East Asian countries, especially to Japan. At least 30 companies, among 100 companies that export their products, are established through joint-venture with an overseas company or as an offshore development center (ODC) by one-hundred-percent foreign capital

Export of Software and ITES from Bangladesh

Out of more than 500 Software and ITES companies in Bangladesh, more than 100 companies export their products to over 30 countries. ITES export of Bangladesh has been rapidly increasing. The major export market is North America, but recently many IT companies started export to EU countries and East Asian countries, especially to Japan. At least 30 companies, among 100 companies that export their products, are established through joint venture with overseas companies or as Offshore Development Centre’s (ODC) by 100 percent foreign capital investment. Most of these companies started their operations within the last two or three years, indicating that the Bangladesh software and ITES industries have started to be focused by the overseas venture capitalists.

In recent years Bangladesh earned a rapid growth in ICT export - which shows a rapid increase tend in ICT export. For instance:

Table 1: Value of Export of Software and ITES from Bangladesh (Unit: Million US dollars)

Fiscal year	Value of export Growth rate (compared to previous year)
2002-03	4.20	50.0 %
2003-04	1.19	71.2 %
2004-05	12.68	76.4%
2005-06	27.01	113.0 %
2006-07	26.08	(-3.4) %
2007-08	24.82	35.9 %
2008-09	32.91	32.59%
2009-10	35.36	7.44%
20010-11	45.31	28.24%

Source: Bangladesh Bank

Coming of age of the software & ITES industry for Bangladesh

In the Anglophone world, Bangladesh ranks third by population behind India and Pakistan (only marginally). This puts Bangladesh high on the list of countries that are poised to benefit from the burgeoning global trade in outsourced ICT services. Although Bangladesh is a relatively recent entrant in the global ICT outsourcing market, we have made great strides in this market over the last ten years. Bangladesh toady has more than three hundred software & IT enabled services firms serving clients in more than thirty countries in four continents.

The World Bank in a recent study projected Bangladesh ICT services export at more than five-hundred million US dollars by 2014. International Trade Center, a UN agency based in Geneva, Switzerland, in their study last year projected IT enabled services export to reach one-hundred-fifty million US dollars by 2011. The domestic market is also set for a robust growth due to rapid expansion of ICT-based citizen services and heightened awareness for ICT-led productivity and efficiency growth in the private sector.

The software and IT enabled services in Bangladesh is also blessed with a large number of young, enterprising and well-educated entrepreneurs who are passionate about ICT entrepreneurship and will surely keep this industry here thriving for many years to come. The present democratically elected government is fully committed to the development of the ICT sector as evidenced by their several ICT related pledges in their election manifesto. They have expressed their willingness to harness the power and utility of information and communication technologies to improve efficiency and transparency in the government; generate employment; and enhance the quality of education, commerce & citizen services in the country.