Increased exports of ICT products and services would play a vital role in short- and long-term macroeconomic growth of Bangladesh, says a latest research, suggesting the need for attracting foreign direct investment (FDI) and investing in human resources.
In the short run, a 1.0 per cent increase in ICT export will lead to 0.013 per cent increase in the country's economic growth, while the long-term impact is much higher, it said.
The country's ICT exports were $548 million in the fiscal year 2022-23, according to the latest report of the Export Promotion Bureau (EPB) of Bangladesh.
"The money made by ICT exports might go toward projects for social welfare, healthcare, education, and infrastructure improvement. Successful ICT exports help a nation's reputation abroad and strengthen its soft power," said the research report.
The research titled 'ICT Adoption and Its Effects on the Economic Growth of Bangladesh: A Time Series Analysis' has been published recently by the World Scientific.
The research also revealed that foreign direct investment (FDI) and Gross Capital Formation (GCF) also play crucial roles for long-term economic growth.
The main objective of the study was to analyse the impact of ICT on Bangladesh's economic development using an econometric model where the secondary data covers the years between 2002 and 2021.
ICT advancement and investment are crucial for fostering entrepreneurial spirit, job opportunities, growth in the economy, and advances in living circumstances, according to many scholars and politicians.
Research and development, global trade, and economic inclusion can all benefit from ICT. Additionally, it raises the labour force's productivity and level of expertise, which laterally contribute to economic expansion, it added.
Highlighting on Bangladesh's GDP growth around 6.5 per cent over the recent years, the report said the wide-ranging adoption and integration of the ICT across different sectors of the economy has been a significant driver of this growth.
ICT export refers to international trade of different products including software, computer components, telecommuting tools, gadgets, web-based services like e-commerce, cloud computing, and digital media, it said.
Acknowledging some limitations in the research including only 20-year time series, the report made a set of policy suggestions.
It recommended focusing on attracting FDI, building robust ICT infrastructure, and investing in human resources to enhance ICT's contribution to economic growth.
The researchers also suggested ensuring government funding efficiency, encouraging ICT adoption in the private sector education and training,
"ICT is instrumental in achieving Sustainable Development Goals (SDGs), improving health, education, and infrastructure to boost economic growth," it said.
One of the researchers who authored the report, Enamul Hafiz Latifee, told the FE that the ICT products like software is almost entirely home-grown, indicating maximum local value addition unlike many other export-oriented sectors that mostly depend on import of raw materials.
"Almost the whole of software development is done through local value addition," said Mr Latifee, a Research Fellow of Bangladesh Association of Software and Information Services (BASIS).
More support by the government for the ICT sector resulting in more export earnings can also help address the existing pressure on the foreign currency reserves, he said.
He also said an increased use of the ICT in all sectors in coordination with public and private sectors is also essential for enhancing the 'ease of doing business' atmosphere.
Japan is an example of such a country where the economy is highly benefited from a strong ICT sector, he added.
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