Bangladesh’s IT exports hit a milestone in the past fiscal year, with local companies and freelancers earning more than half a billion US dollars for the first time from external sources.
Local IT companies saw their export revenue increase by 95% year-on-year to $592.06 million in 2021-2022, according to the Export Promotion Bureau (EPB).
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“Export growth has been driven by the business process outsourcing (BPO) sector,” said Wahid Sharif, chairman of the Bangladesh Association of Contact Centers and Outsourcing (BACCO).
BPO includes customer service, back-office operations, image processing, graphic design, animation, data entry, accounting and legal process outsourcing, and data analytics.
Exports of IT data processing and hosting services, which cover most BPO and IT services, rose 106% to $484.4 million.
People in the industry say growth has been phenomenal since the middle of last year as businesses around the world have rebounded from the improving Covid-19 situation.
“The revival of economic activities around the world has helped our businesses and freelancers attract more orders,” Sharif said.
According to the EPB, IT consulting services brought in $38 million in 2021-22, up from $29.67 million a year ago, while software exports rose to $60 million from $51 million. million in 2020-21.
Export revenue of Brain Station 23, one of the leading software exporters in Bangladesh, has increased by 40-50% in the last fiscal year.
“Orders are pouring in,” said Raisul Kabir, general manager of Brain Station 23, which has hired more than 200 people over the past year to bring its total number of employees to 670.
Apart from traditional software such as payment gateway software, web applications and mobile applications, the demand for data science-related jobs is increasing tremendously, the entrepreneur said.
“Products and services that power the 4th Industrial Revolution-centric agenda, including machine learning, are also in high demand.”
Export revenue for the installation, maintenance and repair of computers and peripheral equipment increased by about 65% to reach $9.93 million in 2021-2022.
“It is certainly a good sign for our industry and it also indicates the capability of our industry,” said Rashad Kabir, managing director of Dream71 Bangladesh Ltd, an export-oriented software company.
“Due to rising inflation globally, many IT companies, especially in Europe, will cut costs and purchase services from Asian countries.”
In September, consumer prices rose by 8.2% in the United States and by 10% in the euro zone.
Despite the phenomenal growth, Bangladesh’s IT exports have remained at a level well below that of its peers.
For example, Indian software services exports amounted to $156 billion in the last fiscal year, according to The Economic Times.
Even Pakistan’s revenue from IT exports, including those related to telecommunications, computer and information services, jumped 29.26% to $1.94 billion in the July-to-July period. March of fiscal year 22, reports The Dawn.
Syed Almas Kabir, former president of the Bangladesh Software and Information Services Association, however, said that the IT industry’s actual export earnings were well above official figures.
Estimated annual IT exports now stand at $1.3 billion, he said. “That’s because a lot of businesses and freelancers aren’t contributing their full amount.”
People in the industry also allege that many companies and freelancers derive their export earnings through unofficial channels due to the higher rate of the dollar against the taka in the informal market.
The taka has lost value by at least 20% against the US greenback over the past seven months due to shortages of US dollars caused by higher import bills amid the Russian- Ukrainian.
Almas also blamed the scarcity of skilled labor in the sector.
“We have more than six lakh freelancers but their hourly rate of pay is very low as they mostly perform low value tasks. But Vietnamese and Indian freelancers earn at least three times as much as Bangladeshi freelancers due to their skills superior.”
“We will be able to perform more high-value tasks if we can develop IT professionals.”
BACCO’s Sharif said changes in the curriculum and collaboration between academia, government and industry are critical to closing the skills gap.
“We have seen a shortage of programmers, especially over the past two years. There is an increased demand for programmers due to the growing demand from software vendors,” Rashad said.
“If we can’t produce enough skilled programmers, we risk losing export potential.”
In Bangladesh, there are about six lakh freelancers and more than 2.5 lakh people are employed in IT companies and the IT sections of companies, financial organizations and government organizations.
Raisul said growth will be slower this fiscal year compared to FY22.
“The coming months will be difficult and the strong growth will not continue,” he said, adding that software export orders will not decline, however.
“The future is a bit uncertain as the global economy is not in good shape,” Sharif said.