Sector of Banglades

Abstract

The importance of Information Technology and the role it can play in the socio-economic development of a nation cannot be over-emphasized. The World has witnessed phenomenal growth in the Information Technology over the last two decades, and the countries which made a conscious decision to take advantage of such growth, have made unprecedented progress. Examples are in abundance; India, Sri Lanka, Thailand, Malaysia, the Philippines are source of the successful countries in our region.

"Digital Bangladesh"- the slogan of Bangladesh government. The slogan says us how much the government is willing to emerge the ICT sector. The people of Bangladesh as well as the institution is too much keen in ICT sector. This interest is accelerating the ICT sector of Bangladesh.

Bangladesh has a lot of export oriented sector such as Leather, Pharmaceuticals, ICT product, Steel sector, Frozen Food, Home textiles and fabrics, Shrimp etc. It has seen clearly that ICT is one of them. So we can strongly say that ICT sector is one of the potential exported oriented sectors in the context of Bangladesh.

What is ICT?

ICT is an acronym that stands for Information Communications Technology

However, apart from explaining an acronym, there is not a universally accepted definition of ICT? Why? Because the concepts, methods and applications involved in ICT are constantly evolving on an almost daily basis. Its difficult to keep up with the changes - they happen so fast.

Let's focus on the three words behind ICT:

-INFORMATION

-COMMUNICATIONS

- TECHNOLOGY

A good way to think about ICT is to consider all the uses of digital technology that already exist to help individuals, businesses and organizations use information.

ICT covers any product that will store, retrieve, manipulate, transmit or receive information electronically in a digital form. For example, personal computers, digital Television, Email, Robots. (tutor2u, 2011)

So ICT is concerned with the storage, retrieval, manipulation, transmission or receipt of digital data. Importantly, it is also concerned with the way these different uses can work with each other.

Snapshot of the Industry

Size, Composition and Market

BASIS is named as Bangladesh Association of Software and Information Service. The organization is the parent organization for ICT related export. The company who wants to export ICT product in abroad or do business in the country needs to register here. The maximum data related with ICT may find here. This is government permitted.

According to BASIS survey, there are over 800 registered software and ITES (IT Enabled Service) companies in Bangladesh. There are another few hundred of unregistered small and home-based software and IT ventures doing business for both local and international markets. (BASIS 2011)

Chart 01: Bangladesh Software and ITES Industry

The total industry size is estimated to be around Tk. 1,800 crore (US$ 250 million). Approximately 30,000 professionals, majority IT and other graduates, are employed in the industry. Though, compared to other traditional mainstream industry, the contribution for overall employment creation is not significantly high, but if considered in terms of creating high quality employment (average monthly compensation over Tk. 15,000 per month), software and IT service industry is surely one of the top graduate employment sectors in the country.

Chart 02: Distribution of Annual Market size

BASIS recently carried out a survey on three hundred of its member companies. Analysis has been done on business nature, business volume and size of companies. Over 70% of the companies (please see chart 2 next page) are found to be involved in development and maintenance of software for their clients. A number of those are simultaneously engaged in providing different IT enabled services for their clients as well. In total, almost half of the surveyed companies are involved in providing range of IT enabled services (data/form processing, graphic/web design, content management etc.). (BASIS 2011)

Interestingly, a significant number of companies (18%) have developed software products or productized services; most of those have been developed over time after repeated installations for multiple clients. A number of companies are in digital content development and delivery business, mainly providing content services through mobile platform.

Chart 03: Business specialization of BASIS Member companies

One of the most encouraging recent trends in the industry is that, leveraging on recent positive changes like larger Internet user-base, better connectivity as well as introduction of new payment methods (online payment - through credit card and mobile payment), a good number of companies (around 45%; some dedicatedly and some along with their core software or IT service business) are focusing or diversifying on different web based services that include specialized portals, listing services, e-Commerce, e-Learning, payment intermediary services etc. A number of these ventures have done quite well in terms of popularity as well as financial viability. Off late, some companies are also developing web applications based on cloud/SaaS delivery model. These emerging new business and service delivery models might define the new wave in the coming years for Bangladesh IT industry. (BASIS 2011) With regard to average size of enterprises within the industry, it is interesting to note that, the distribution is quite spread with respect to both revenue size and employment number. Majority of the companies are in the range between 10 to 50 people in employee size. Similar pattern can be found in revenue size of the companies. However, there are few product companies who have relatively less number of people for significant revenue.

Chart 04: Enterprise