Towards a sustained growth of IT industry
Sunday, 5 August 2007
Shahiduzzaman Khan
Slowly but steadily, country's software industry is expanding. Young and talented information technology (IT) experts in Bangladesh are contributing significantly to the industry. The young industry is developing new products and corporate culture in order to attain maximum degree of proficiency.
However, country's software outsourcing market is very small. At present, the country has only a stake of US$15 million in offshore development. The total global market size of outsourcing in 2006 was estimated at $50 billion and was expected to triple by 2009. The arrival of much-awaited submarine cable should expand the country's present market size of outsourcing.
As put up by Danish IT experts who visited software fair held in Dhaka recently: 'Bangladesh is a sleeping giant as far as the software outsourcing is concerned.' The sleeping giant can now wake up as the submarine cable has already been launched. In the past, software outsourcing could not take off on a large scale, simply because bandwidth was too expensive. The submarine cable is definitely an answer now to such a problem.
At present, Bangladesh is selling software products made by its skilled professionals to around 20 countries of the world, including the USA, Canada, the UK and Australia, despite lack of resources. The country secured its position among top 20 outsourcing countries in the world, rising from bottom end six years ago. Nowadays, the IT and communication are getting converged gradually and no country, without enhancing its IT sector, will be able to keep pace with the developed countries. The country needs to elevate its basic infrastructures in order to enhance its IT sector.
A few years back, Bill Gates accompanied by his wife Melinda visited Bangladesh for a brief period of time. But this sojourn was enough to demonstrate his willingness to come closer to Bangladesh. His visit gave a positive signal to the outside world that Bangladesh was becoming an emerging destination for software investment. During his visit, Gates signed a number of agreements with the government and the private sector. Gates sounded optimistic about the development of human resources and skilled people for the IT industry in Bangladesh. He said India has been creating a huge number of IT talents by establishing a lot of institutes to teach IT technology and Bangladesh should do the same.
However, hope for a big bang information technology investments as well as development ran high in Bangladesh following his visit. Many global corporations are showing interest to invest multi-million dollars into Bangladesh's nascent high-tech sector. Microsoft is the world's biggest software company, with annual sales revenues of around $40 billion. Recently, Intel handed a proposal to the Science and Information and Communications Technology Ministry to be an affiliated partner of the government.
However, software industry is one of the essential components of IT industry with global market of $800 billion this year. It is still largely dependent on human resources and some of the developing countries are taking advantage of this opportunity. As said earlier, the present size of software industry in Bangladesh is very small. Roughly, 250 firms or organisations and some individuals have been exporting software and data processing services.
Recently, efforts to install e-governance are intensifying in many ministries of the country. Some have already taken initial steps towards the use of ICTs to facilitate governmental activities. But the moot point is that the government needs to spend a significant amount of resources on software licencing requirements and on updating hardware resources to meet the requirements for the latest proprietary technologies such as Windows XP. In order to avoid 'unnecessary' expenses in software procurement, use of pirated software is becoming more and more prevalent. Recourse to open source (OS) technologies can significantly bring down costs for e-governance in Bangladesh. Due to the exorbitant price of software, piracy has become common practice in the country.
Also, compliance with WTO intellectual property regulations is likely to put international pressure on the country. In such a global economic and political scenario, adoption of open source technologies can vastly reduce Bangladesh's current vulnerabilities in terms of potential harassment for widespread software piracy and allegations of violation of WTO rules, leading to possible trade restrictions.
Adoption of open source technologies by the government can greatly enhance opportunities for the local software industry to provide high-end solutions to the government and thus, develop the much-needed experience for bidding for international projects. The local software industry would gain from the large body of knowledge that would need to be acquired in order to build upon existing open source technologies and produce customised solutions for the government. Dependence upon foreign vendors can then be significantly reduced while providing a competitive environment for local companies to build expertise necessary for becoming global players and propelling the country towards a software-led export growth pattern.
There is no denying that the advancement of technology was very rapid. Computer is million times powerful that it was 25 years ago. It is now universal; it is the internal artery of the society. Now almost every computer is connected with Internet. After five to seven years, there will be hardly any paper-works. Even CDs and DVDs will be obsolete. The capacity of hard discs is being doubled in every two years.
Works are now on for developing wireless technology, as broadband technology is a bit costly. In this context, many developments have taken place in the past few years in the science technology sector. Bangladesh should, as such, keep itself abreast with the latest technological advancements and look forward to grasp it for onward progress.
A dependable information system is essential for country's efficient management and operation of the public and private sectors. But there is a shortage of locally generated information needed for efficient performance of these sectors. In order to meet this objective, ICT use in every sector needs to be accelerated in terms of information generation, utilisation and applications.
The country needs to find creative ways to promote and sustain software entrepreneurship especially among those under the age of 30. The good news here is that many Bangladeshi engineers are extremely bright and need that one spark to do very creative things and the cost of developing a new software product has fallen dramatically since 2000 (1/10th) due to open source products and Web maturity.
Also, Bangladesh needs to encounter the shortcomings in its education system by teaching better English and including more materials that encourage independent thinking and risk-taking. More networked computers should be made available, particularly to those who hold the promise of making some breakthroughs.
The government can play a critical role in all these steps, e.g., by creating a favourable financing environment, by incentivising locally produced software, by subsidising research and development (R&D) in software, and by improving the education system, etc. But ultimately it will be the creativity of Bangladeshi software engineers and the business drive of Bangladeshi entrepreneurs, which will lead to a thriving software industry in the country.
In order to make government services efficient, transparent and productive, use of IT is highly imperative. IT could be a breeding ground for software engineers and professionals if a phase-wise plan for implementation of IT and its services could be adopted in public and private sectors. Without a realistic roadmap for IT implementation the sporadic efforts of different ministries and departments will fail to produce any real good for the industry.
Slowly but steadily, country's software industry is expanding. Young and talented information technology (IT) experts in Bangladesh are contributing significantly to the industry. The young industry is developing new products and corporate culture in order to attain maximum degree of proficiency.
However, country's software outsourcing market is very small. At present, the country has only a stake of US$15 million in offshore development. The total global market size of outsourcing in 2006 was estimated at $50 billion and was expected to triple by 2009. The arrival of much-awaited submarine cable should expand the country's present market size of outsourcing.
As put up by Danish IT experts who visited software fair held in Dhaka recently: 'Bangladesh is a sleeping giant as far as the software outsourcing is concerned.' The sleeping giant can now wake up as the submarine cable has already been launched. In the past, software outsourcing could not take off on a large scale, simply because bandwidth was too expensive. The submarine cable is definitely an answer now to such a problem.
At present, Bangladesh is selling software products made by its skilled professionals to around 20 countries of the world, including the USA, Canada, the UK and Australia, despite lack of resources. The country secured its position among top 20 outsourcing countries in the world, rising from bottom end six years ago. Nowadays, the IT and communication are getting converged gradually and no country, without enhancing its IT sector, will be able to keep pace with the developed countries. The country needs to elevate its basic infrastructures in order to enhance its IT sector.
A few years back, Bill Gates accompanied by his wife Melinda visited Bangladesh for a brief period of time. But this sojourn was enough to demonstrate his willingness to come closer to Bangladesh. His visit gave a positive signal to the outside world that Bangladesh was becoming an emerging destination for software investment. During his visit, Gates signed a number of agreements with the government and the private sector. Gates sounded optimistic about the development of human resources and skilled people for the IT industry in Bangladesh. He said India has been creating a huge number of IT talents by establishing a lot of institutes to teach IT technology and Bangladesh should do the same.
However, hope for a big bang information technology investments as well as development ran high in Bangladesh following his visit. Many global corporations are showing interest to invest multi-million dollars into Bangladesh's nascent high-tech sector. Microsoft is the world's biggest software company, with annual sales revenues of around $40 billion. Recently, Intel handed a proposal to the Science and Information and Communications Technology Ministry to be an affiliated partner of the government.
However, software industry is one of the essential components of IT industry with global market of $800 billion this year. It is still largely dependent on human resources and some of the developing countries are taking advantage of this opportunity. As said earlier, the present size of software industry in Bangladesh is very small. Roughly, 250 firms or organisations and some individuals have been exporting software and data processing services.
Recently, efforts to install e-governance are intensifying in many ministries of the country. Some have already taken initial steps towards the use of ICTs to facilitate governmental activities. But the moot point is that the government needs to spend a significant amount of resources on software licencing requirements and on updating hardware resources to meet the requirements for the latest proprietary technologies such as Windows XP. In order to avoid 'unnecessary' expenses in software procurement, use of pirated software is becoming more and more prevalent. Recourse to open source (OS) technologies can significantly bring down costs for e-governance in Bangladesh. Due to the exorbitant price of software, piracy has become common practice in the country.
Also, compliance with WTO intellectual property regulations is likely to put international pressure on the country. In such a global economic and political scenario, adoption of open source technologies can vastly reduce Bangladesh's current vulnerabilities in terms of potential harassment for widespread software piracy and allegations of violation of WTO rules, leading to possible trade restrictions.
Adoption of open source technologies by the government can greatly enhance opportunities for the local software industry to provide high-end solutions to the government and thus, develop the much-needed experience for bidding for international projects. The local software industry would gain from the large body of knowledge that would need to be acquired in order to build upon existing open source technologies and produce customised solutions for the government. Dependence upon foreign vendors can then be significantly reduced while providing a competitive environment for local companies to build expertise necessary for becoming global players and propelling the country towards a software-led export growth pattern.
There is no denying that the advancement of technology was very rapid. Computer is million times powerful that it was 25 years ago. It is now universal; it is the internal artery of the society. Now almost every computer is connected with Internet. After five to seven years, there will be hardly any paper-works. Even CDs and DVDs will be obsolete. The capacity of hard discs is being doubled in every two years.
Works are now on for developing wireless technology, as broadband technology is a bit costly. In this context, many developments have taken place in the past few years in the science technology sector. Bangladesh should, as such, keep itself abreast with the latest technological advancements and look forward to grasp it for onward progress.
A dependable information system is essential for country's efficient management and operation of the public and private sectors. But there is a shortage of locally generated information needed for efficient performance of these sectors. In order to meet this objective, ICT use in every sector needs to be accelerated in terms of information generation, utilisation and applications.
The country needs to find creative ways to promote and sustain software entrepreneurship especially among those under the age of 30. The good news here is that many Bangladeshi engineers are extremely bright and need that one spark to do very creative things and the cost of developing a new software product has fallen dramatically since 2000 (1/10th) due to open source products and Web maturity.
Also, Bangladesh needs to encounter the shortcomings in its education system by teaching better English and including more materials that encourage independent thinking and risk-taking. More networked computers should be made available, particularly to those who hold the promise of making some breakthroughs.
The government can play a critical role in all these steps, e.g., by creating a favourable financing environment, by incentivising locally produced software, by subsidising research and development (R&D) in software, and by improving the education system, etc. But ultimately it will be the creativity of Bangladeshi software engineers and the business drive of Bangladeshi entrepreneurs, which will lead to a thriving software industry in the country.
In order to make government services efficient, transparent and productive, use of IT is highly imperative. IT could be a breeding ground for software engineers and professionals if a phase-wise plan for implementation of IT and its services could be adopted in public and private sectors. Without a realistic roadmap for IT implementation the sporadic efforts of different ministries and departments will fail to produce any real good for the industry.