Most of the country's software development firms are unable to flourish at expected level due to some factors including scarcity of skilled manpower and lack of policy support from the government, says a study.
Other factors include preference to foreign software developers over local ones, absence of intellectual property rights (IPR) and improper information communication technology (IT) curriculum, said the study conducted by Small and Medium Enterprise Foundation (SMEF).
It also revealed that the majority of local software companies are not capable of creating enough employment opportunities.
More than 90 per cent of the software development companies surveyed cannot employ more than 30 people, it added.
The study titled 'Software Industry in Bangladesh' was conducted on 309 local software development companies in 2014 and 2015.
According to the study launched last week also said with less than 7,000 jobs in 309 firms generating less than $100 million revenue with $25 million export, software development sector is insignificant in overall economic volume of Bangladesh.
"But this is the sector, which has the latent potential to make Bangladesh smart nation, a rich nation by unleashing creative entrepreneurial potential of 30 million students, in the globally-connected society," it said.
Quoting many analytical reports, the study said software will be a driving force of industrial innovation over next several decades.
It identified several reasons for holding back the sector's growth despite its potential and necessity for other sectors.
Under the supervision of SMEF Managing Director (MD) Md Safiqul Islam, the foundation officials with support of IT experts conducted the study.
Keeping this in view, the study presented a set of recommendations to tap the full potential of the country's software development sector.
It said capability of software development sector will also bring benefit to other sectors.
It suggested making investments in university-based collaborative research and development (R&D), focusing on software innovation, and targeting different domestic sectors.
"For example, image processing-based inspection software has a significant scope to reduce waste and improve quality in our export-oriented ready-made garment (RMG) sector," it said.
The study also suggested that policy of different ministries should be updated to use software innovations as a strategic tool to address agenda of corresponding ministries.
"For example, software innovations could be a strategic tool to increase productivity of agriculture or health sectors," it added.
The study also suggested establishing a virtual software innovation and industry research and development centre maintaining relationship with most of the public and private universities.
M Rokonuzzaman, an IT expert and a professor of department of electrical and computer engineering at North South University, said there are two key challenges for the country's software development industry.
"On one hand, Bangladeshi software companies are not growing to large corporations, on the other software innovation is still limited to maximise the output from other sectors," he said.
According to him, the companies usually don't grow mainly due to their project-driven approach.
He also underscored the need for a balanced intellectual property rights policy in the country for both the protection and further progress of the software developers.
While his attention was drawn to various initiatives taken by the government, he said there are still many issues to be addressed.
The technology expert suggested conducting further periodic research on the country's software industry.
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