Local software industry fails to meet expected growth
Friday, 6 January 2012
Md Jamal Uddin
The country's about US$250 million software industry has failed to achieve its expected growth due mainly to some problems including lack of adequate infrastructure and global recognition, according to a survey.
The country's giant business houses of financial and telecom sectors depend on foreign software companies, while companies with small cap use locally developed ones.
Despite high expectation, the software industry has failed to achieve export target that was achieved by many Asian countries, the survey pointed out.
According to the survey of Bangladesh Association of Software & Information Services (BASIS), about 800 registered software and ITES (IT Enabled Service) companies which export products worth about $50 million per annum are active in the country.
The companies have also created job opportunities for about 30,000 people.
The country earned $15.515 million by exporting software in the first quarter of 2011-12 fiscal year (FY), as per the data of Export Promotion Bureau (EPB).
Of the total companies, over 160 companies export their portfolio in different destinations mainly in North America, especially in the USA, the UK, Denmark and the Netherlands.
Recently, a number of companies that develop mobile phone related applications have achieved considerable success in some Asian and African markets including Malaysia, Singapore, the UAE, Saudi Arabia and South Africa.
BASIS President Mahboob Zaman told the FE that despite various problems, the software industry had emerged as a major sector and was playing vital role in promoting the country's IT sector.
Lackluster performance, lack of proper infrastructure, shortage of qualified IT resource persons and absence of international branding and marketing activities are reasons behind slow growth of the industry, he added.
But it is inspiring that the country has got the global recognition as outsourcing destination. Besides, Samsung, one of the global leaders in consumer electronics industry, has opened its high-end R&D (research and development) centre in Bangladesh with over 200 engineers.
The top leader of the trade body, Mr Zaman, said banking and other financial institutions including insurance, leasing companies and brokerage houses are the main destination to reach for our IT companies which are already occupied by the foreign firms.
Foreign companies are still supplying about one-third of the required software and IT services to our local companies, said Mr Mostafa Jabbar, president of Bangladesh Computer Association (BCS).
If proper human resources are not created, this trend will continue for many years, he told the media earlier. If we fail to create proper human resources, the growth of software industry will not meet its expected target, he added.
The BASIS survey mentioned that manufacturing sectors including readymade garments (RMG), textile, pharmaceuticals and other consumer goods industries have created sustainable demand for IT solutions like ERP, human resource (HR) information system, production and financial management solution.
On the other hand, service industries like telecom (the second highest after financial sector within service sector), retail and wholesale, healthcare (hospitals and diagnostic centres), education (universities, schools and colleges), publishing/media houses and real estate sector have created sizable market for IT companies.
Another survey carried out on 110 IT companies found that those companies were providing business application solutions including ERP, accounting software, HR software, sales automation, inventory management system to domestic market.
The country's about US$250 million software industry has failed to achieve its expected growth due mainly to some problems including lack of adequate infrastructure and global recognition, according to a survey.
The country's giant business houses of financial and telecom sectors depend on foreign software companies, while companies with small cap use locally developed ones.
Despite high expectation, the software industry has failed to achieve export target that was achieved by many Asian countries, the survey pointed out.
According to the survey of Bangladesh Association of Software & Information Services (BASIS), about 800 registered software and ITES (IT Enabled Service) companies which export products worth about $50 million per annum are active in the country.
The companies have also created job opportunities for about 30,000 people.
The country earned $15.515 million by exporting software in the first quarter of 2011-12 fiscal year (FY), as per the data of Export Promotion Bureau (EPB).
Of the total companies, over 160 companies export their portfolio in different destinations mainly in North America, especially in the USA, the UK, Denmark and the Netherlands.
Recently, a number of companies that develop mobile phone related applications have achieved considerable success in some Asian and African markets including Malaysia, Singapore, the UAE, Saudi Arabia and South Africa.
BASIS President Mahboob Zaman told the FE that despite various problems, the software industry had emerged as a major sector and was playing vital role in promoting the country's IT sector.
Lackluster performance, lack of proper infrastructure, shortage of qualified IT resource persons and absence of international branding and marketing activities are reasons behind slow growth of the industry, he added.
But it is inspiring that the country has got the global recognition as outsourcing destination. Besides, Samsung, one of the global leaders in consumer electronics industry, has opened its high-end R&D (research and development) centre in Bangladesh with over 200 engineers.
The top leader of the trade body, Mr Zaman, said banking and other financial institutions including insurance, leasing companies and brokerage houses are the main destination to reach for our IT companies which are already occupied by the foreign firms.
Foreign companies are still supplying about one-third of the required software and IT services to our local companies, said Mr Mostafa Jabbar, president of Bangladesh Computer Association (BCS).
If proper human resources are not created, this trend will continue for many years, he told the media earlier. If we fail to create proper human resources, the growth of software industry will not meet its expected target, he added.
The BASIS survey mentioned that manufacturing sectors including readymade garments (RMG), textile, pharmaceuticals and other consumer goods industries have created sustainable demand for IT solutions like ERP, human resource (HR) information system, production and financial management solution.
On the other hand, service industries like telecom (the second highest after financial sector within service sector), retail and wholesale, healthcare (hospitals and diagnostic centres), education (universities, schools and colleges), publishing/media houses and real estate sector have created sizable market for IT companies.
Another survey carried out on 110 IT companies found that those companies were providing business application solutions including ERP, accounting software, HR software, sales automation, inventory management system to domestic market.