Software export set for a great leap forward

Thanks to innovations and skills of our private sector entrepreneurs, the country has made a big leap forward in a sector that was foreign to us even a decade ago. Believe it or not, Bangladesh fetched a record $112 million last year through software exports. Even the ongoing political turmoil could not stop its forward march because the product-software, to be exact-could be exported through the Internet, beyond the reach of our squabbling politicians. Software is one sector that does not need roads or highways for its movement!  
The success is striking because the software sector grew overcoming many hurdles. The bottlenecks are high cost of bandwidth and small numbers of IT parks. According to the Bangladesh Association of Software and Information Services (BASIS), the earning of $112 million is very negligible compared to the huge potentials. If the industry gets necessary infrastructure and policy support, it could earn over $1 billion a year, it estimated.
Industry insiders say, in view of the fast-changing global scenario, the information and communications technology (ICT) can work miracles for Bangladesh. The software export has been growing at 40-50 per cent a year for the last few years.
More importantly, the freelancers alone, without any support from either the government or any organisation, exported IT products worth $25 million last year. This amount is out of official records. The country has more than 20,000 active freelancers working at home. At present, exports of a number of ITES (information technology-enabled services) remain unrecorded due to problems with the coding system of the Bangladesh Bank.
What should make the entire nation elated is that software exporters can hit the $1 billion mark by 2015 and create employment for 100,000-odd graduates if proper support is given to the sector. The growing industry requires more manpower.
There is a bright prospect for Bangladesh in this software industry. The country too is moving fast to e-commerce-based economy, keeping pace with the trends in today's world. Thousands of unemployed youths are getting the opportunity to work both at home and abroad.
The demand for Bangladeshi software has increased significantly. A huge quantity of quality software is being produced in the country. The demand for software in the local market alone is worth over Tk 3.0 billion. Bangladeshi companies, grouped under the BASIS, regularly export software to 30 countries. Among these countries are the USA, Japan, Canada, Australia and different European states. Over 50 software firms and IT companies are involved with the export process. A survey says some of the organisations that use Bangladeshi software are Nokia, Japan Airlines, the World Bank, US Postal Departmment and US Agriculture Department. An ICT incubator centre has been established in Dhaka city's Karwan Bazar aimed at developing the software industry. Currently, more than 48 organisations are working at the centre. From this incubator, an amount of Tk 42.7 million was earned through export in only two years.
A Commerce Ministry report on 'Export of Computer Software from Bangladesh: Problems and Prospects' says there are many positive aspects of Bangladesh's software. Every year, a large number of students are receiving degrees and training on computer-related subjects from different government and private universities. Many Bangladeshi students are also studying abroad. Besides, IT-educated manpower is available in Bangladesh at much lower cost than those of the developed countries and even neighbouring India.
But then, in our country it's not possible to develop enough manpower for lack of IT institutions. This is the main problem. Besides, lack of information is another aspect. For instance, many people with the highest degrees in Computer Science don't even know that software can be made, sitting at home. There are many works available on-line for professionally skilled software developers.
Software industry is electricity-dependent. But, we never get uninterrupted power supply. For this, software developers face problem in delivering the orders. It also affects the efforts to create skilled manpower in the IT sector.
According to experts, the main problems that are hindering development of the industry include absence of duty-free facility in case of software export-import, problems relating to necessary infrastructure and marketing, reluctance of government offices in using software, lack of IT-based educational institutions, inadequacy of teachers and labs, lack of planning and government support, reluctance of banks to provide loans and absence of software-related laws.
If the existing problems could be solved, this export-oriented industry can open up a new horizon for national development.
Leading IT experts have suggested the following for faster development of the hugely potential software industry:  
n Exemption of all duties and taxes
n Provision of export incentive
n Tax holiday for 10 years
n Growth of domestic software industry
n Provision of a 15 per cent domestic price preference for locally developed software
n Easing of complicated banking procedures
n Allowing export of software and data processing services through sales contract, instead of Letters of Credit.
n Lowering of bank borrowing rate
n Reduction of interest rate to the level of other export sectors
n Removal of difficulties in Customs clearance
n Provision of Special Custom Bonded Warehouse facilities
n Provision of funds for computer purchase
n Creation of a Special Fund for giving interest-free loans to teachers and students
n Diversification of sources of financing
n Provision of funds for market promotion
n Creation of a Market Promotion Fund to be administered by Export Promotion Bureau for meeting the expenses of promoting Bangladesh as a potential source of software and data processing services to the overseas markets and
n Provision of funds for research and development.    
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