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[🇧🇩] ICT Industry in Bangladesh
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Information technology in Bangladesh

The information technology sector in Bangladesh had its beginnings in nuclear research during the 1960s. Over the next few decades, computer use increased at large Bangladeshi organizations, mostly with IBM mainframe computers. However, the sector only started to get substantial attention during the 1990s. Today the sector is still in a nascent stage, though it is showing potential for advancement. Nonetheless, Bangladesh IT/ITES industry has fared comparatively well by achieving US$1.3 billion export earnings in FY 2020-21 and holding US$1.4 billion equivalent market share in the local market contributing 0.76 per cent to the GDP creating more than 1 million employment opportunities so far amid Covid-19 havoc that suddenly shattered businesses last year. Consequently, riding on the successes of IT/ITES sector-supported export-led industries as well as pro-private sector and conducive policies pursued by Bangladesh Government, the country is now poised to become a Developing Country by 2026, as recommended by the United Nations Committee for Development Policy (UNCDP), besides, Bangladesh now seeks to transform itself into a knowledge-based and 4IR-driven cashless economy, aiming to become a developed country by 2041. The Bangladesh government has formulated a draft 'Made in Bangladesh– ICT Industry Strategy' aimed at turning Bangladesh into an ICT manufacturing hub, enhancing export of local products, attracting foreign investment and creating employment proposing to implement in three Notif-info terms— short term from 2021 to 2023, mid-term from 2021 to 2028 and long term from 2021 to 2031 for implementation of the 65 action plans.

History

The first computer in East Pakistan was an IBM mainframe 1620 series, installed in 1964 at the Dhaka center of the Pakistan Atomic Energy Commission (later the Bangladesh Atomic Energy Commission). Computer use increased in the following years, especially after the independence of Bangladesh in 1971; more-advanced IT equipment began to be set up in different educational, research and financial institutions. In 1979, a computer centre, later renamed Department of Computer Science & Engineering, was established at Bangladesh University of Engineering and Technology (BUET); the centre has been playing a pivotal role in Bangladeshi IT education since its inception. Through the introduction of personal computers, the use of computers witnessed a rapid increase in the late 1980s. In 1985, succeeding several individual initiatives, the first Bengali script in computers was invented, paving the way for more intense computer activities. In 1995, use of the Internet began and locally made software started to be exported.

In 1983, the Ministry of Science and Technology established a National Computer Committee to create the required policies. The committee was also responsible to carry out programs to expand and promote the efficacious use of the sector. In 1988, the committee was replaced by the National Computer Board. In 1990, the ministry reformed the board and reconstituted it as the Bangladesh Computer Council to monitor computer- and IT-related works in the country.

ICT industry

The ICT industry is a relatively new sector in the country's economy. Though it is yet to make tangible contributions in the national economy, it is an important growth industry. The Bangladesh Association of Software and Information Services (BASIS) was established in 1997 as the national trade body for software and IT service industry. Starting with only 17 member companies, by 2009 membership had grown to 326. In a study among Asian countries by Japan International Cooperation Agency in 2007–08, Bangladesh was ranked first in software and IT services competitiveness and third in competencies, after India and China. The World Bank, in a study conducted in 2008, projected triple digit growth for Bangladesh in IT services and software exports. Bangladesh was also listed as one of the top 30 Countries for Offshore Services in 2010–2011 by Gartner. The Internet penetration has also grown to 21.27 percent in 2012, up from 3.2 percent three years prior.

The Information and Communications Technology (ICT) sector of the country has maintained 57.21 percent export growth on an average over the last nine years since 2009. In the fiscal year (FY) 2016–17, Bangladesh ICT sector registered export earnings worth US$0.8 billion from the global market and US$1.54 billion from the domestic market span – thereby making around one percent contribution to the gross domestic product (GDP). The ICT sector has created around three hundred thousand job opportunities so far. ICT exports of the country are also projected to reach US$5 billion by 2025.

As the Internet usage increases, the government expects the IT sector to add 7.28 percent to GDP growth by 2021.
 
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ICT is going to be main saviour of economy: Salman
Bangladesh Sangbad Sangstha . Dhaka 05 May, 2024, 22:16

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Salman Fazlur Rahman. | — New Age file photo

Noting that the ICT sector is going to be the main saviour of the country's economy in the future, prime minister's private industry and investment adviser Salman Fazlur Rahman on Sunday advocated for continuing the various tax facilities policy apart from support that the sector is currently enjoying for further flourish of this sector.

'I'm cent per cent agreed with the ICT entrepreneurs that the existing tax facilities should remain. I still think that the sector is still at the premature stage and it won't be wise to withdraw the existing tax facilities that the sector is currently enjoying. Rather, we've to think of giving more incentives, otherwise challenges will come,' he said.

Salman was speaking as chief guest at a roundtable titled 'Investment Climate for Smart Bangladesh' held at a city hotel.

State minister for posts, telecommunications and ICT Zunaid Ahmed Palak and parliamentary standing committee chairman on the same ministry Kazi Nabil Ahmed spoke as special guests chaired by Venture Capital and Private Equity Association of Bangladesh president Shameem Ahsan. The VCPEAB organised the roundtable.

Ferdous Ahmed, MP and Zara Jabeen Mahbub, MP also spoke as guests of honour.

Agreeing with the various demands of the entrepreneurs of the ICT sector, Salman said that he would discuss with the finance minister and the prime minister regarding the various issues surrounding the industry.

Criticising slightly the National Board of Revenue for imposing more burden on the existing regular taxpayers, the adviser suggested that the revenue board should focus more on bringing in the untaxed people to the tax net.

'Unless the tax collection system is digitalised fully or major reforms are not brought, then the tax to GDP ratio will not increase,' he added.

Mentioning that data is going to be the main asset in the coming days, the adviser urged the relevant stakeholders and entrepreneurs to give more emphasis on AI, data sign, big data management, chip designing, cyber security and establishing a huge data centre.

State minister for ICT Zunaid Ahmed Palak said that the country's IT and ICT sector witnessed massive successes over the last 15 years under the farsighted vision of prime minister's ICT adviser Sajeeb Wazed Ahmed and courageous leadership of Prime Minister Sheikh Hasina.

He urged the PM's private industry and investment adviser to talk with the finance minister and the prime minister about the rational demands of continuing tax facilities in the ICT sector.

The state minister suggested that the higher educational institutions and universities should change their curriculum in line with the changing global context in the ICT sector.

He opined that the existing tax exemption facilities in the ICT sector should continue in the next year while there could be discussions on how to facilitate the sector considering the changing context of FY26, FY31 and FY41.

Palak opined that if the ICT sector receives government's policy support for the next 10 years, then the ICT and the IT enabled services would be the major export-oriented sector in the country.

Kazi Nabil Ahmed, MP said that there was a need to make more energetic and skilled Human Resources to make each and every sector of the country technology-based.

'We've to make a knowledge-based economy to build Smart Bangladesh,' he said, adding that the government and the private sector should leapfrog the initiatives in this sector to make the Smart Bangladesh vision visible.

The ICT policies mainly focuses on data protection and cyber security along with ease of doing ICT business by streamlining tax incentives, including 100 per cent CIT exemption for the ICT/software industry, 10 per cent export subsidies, VAT exemption on local bills during production. Additionally, initiatives to attract foreign investment include 100 per cent tax exemption for income from software development, 2 per cent duty on ICT related hardware imports etc.

The ICT industry emphasizes achieving a $50 billion ICT GDP by 2041, which entails increasing the sector's contribution to the national GDP from less than 1 per cent to 2-3 per cent by 2041.

In his presentation, Shaheem Ahsan said that withdrawal of incentives and policy support would directly impact local and foreign investment, worsen unemployment and brain drain situation, put pressure on currency reserve, increase risk of data sovereignty and national cyber security and increase the cost of automation towards SMART transition.

DCCI president Ashraf Ahmed, CCCI president Omar Hazzaz, CSE chairman Asif Ibrahim, UGC member Md Sazzad Hossain, FBCCI senior vice-president Md Amin Helaly, Policy Exchange Bangladesh chairman M Masrur Reaz, Founder and CEO of Bdjobs Ltd Fahim Mashroor, policy adviser of CRI Imran Ahmed, vice-president of VCPEAB Mohammad Zahirul Islam spoke, among others, on the occasion.

The leaders in the IT industry also have asked for the tax exemption to be extended for three years. They believe keeping this exemption is crucial as removing same will diminish profitability and reduce reinvestment capabilities for IT /ITES companies, resulting in slower industry growth and diminished export potential.​
 
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Can the IT sector make it through tough times?
AFSAN CHOWDHURY
Published :
May 06, 2024 22:46
Updated :
May 07, 2024 21:31

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Global markets are undergoing turbulence and none can say how long they will last or if they will become the way future markets play. The same syndrome applies to Bangladesh as well including the IT sector.

Information technology exports from Bangladesh dropped 4.4 per cent in the first five months -around 225 million dollars- current fiscal year- due to global demand slowdown. But the global reality of the IT sector as the dominant sector remains. In Bangladesh, most experts tend to think in three months or shorter economic cycles but the fact remains that in the global economy the IT sector is the biggest reality and matters more in the long term.

The current state of IT in Bangladesh is beset with problems. Startup funding availability is not great in the short term and European countries are facing a downturn reducing the market size. The fact remains that the global economic future is here even though global outsourcing and hiring is lower this year. Meanwhile, non-European markets are slowly growing and it's inevitable new economies and sources emerge.

Several factors have contributed to Bangladesh's difficulties. It has relied almost entirely on the West that is under pressure due to the Ukraine war and growth of competitive sub-sources affecting Bangladesh as a low end supplier.

The other one is the accepted lack of entrepreneurial spirit inevitable in a crony economy. They look for connections rather than competition-based markets so their innovation index is not high. Thirdly, the sector is yet to have enough skilled hands and the general low focus on skill development has made it worse. While the future is focused on new technology, Bangladeshi companies are looking for a tech duplication of the RMG sector where price is all, not quality.

"Smart Bangladesh", tax exemption and related issues that affect the sector are several. Although the government is pushing for a "Smart Bangladesh", it's still more of a slogan than practical action driven. About Tk 24 billion were allocated last year but no result sheet on impact has been stated.

Smart Bangladesh is supposed to be "Smart Citizen, Smart Society, Smart Government, and Smart Economy. A 'Smart Bangladesh: ICT 2041 Master Plan' has been prepared. It's estimated that there are over 2,500 startups in Bangladesh with approximately at about $1 billion investment. Around 2 million people may be involved directly or indirectly. The government has promised to invest Tk 5.0 billion.

However, a key factor has been tax exemptions for the IT sector which may end this June. Entrepreneurs are demanding its continuation for another seven years. This exemption coming as it does with a weak performing phase is going to be blow to the sector they are saying. That tax exemption played a major role is obvious as the number of players rushing into the sector was high. Low or no tax exemption will ultimately increase the cost of ICT-related products.

"What ails thee BD IT?" is a question many ask. Bangladesh doesn't have a robust foreign investment framework or even an adequate IT infrastructure with a skilled workforce

The IT sector can be a turnaround agent for developing countries like Bangladesh, but it needs such as IT-enabled services (ITES), e-commerce, Artificial Intelligence, outsourcing, and the production of software and hardware. However, the backbone is the business framework.

Bangladesh is aiming to reach the $5 billion export-mark by 2025 and $20 billion by 2031. By 2025, 3.0 million youths will be employed in the country's IT industry. They need a host of missing links in place first.

No one seems keen to face the fact that shortage of highly skilled professionals is a critical hindrance. Insufficient infrastructure, including reliable internet connectivity and power supply are ailments affecting all sectors.

The regulatory frameworks and bureaucratic procedures deter foreign investment and market for all sectors including IT. Cyber threats and data security vulnerabilities are present and on top of that outfits are not keen to use the formal money channels as dollar rates fluctuate and affect all remittance payments. The sector as a whole is also unused to business competition dynamics.

The GOB has focused more on fiscal issues giving a 10 per cent cash incentive to software exports, aiming to stimulate the foreign exchange-earning segment as in the RMG sector. The exemption of all taxes and duties on imported computer hardware and simplified tax-free export earning remittance procedures with 40 per cent retention in foreign currency have made it more attractive.

But a critical missing factor is the connectivity with other countries in the same sector to see how far they can take advantage of subcontracting. The technologically advanced Asian countries are a big source of market but not yet linked to the BD IT sector.

India and China are big players and as their capacity and scale have grown and they are more keen to enter the bigger market segments. Bangladesh can attract small-scale companies overlooked by India and China. Both may also explore the mutually beneficial business opportunities in joint ventures. Meanwhile, providing the three essentials : training, infrastructure and funding are key to becoming a minor but sustainable player in this global sector.

In the final analysis, the state of the IT sector is both an internal production and external market issue. Bangladesh doesn't have the requisite infrastructural ability whether in skills or technical support issues. It's also not in conversation with its major potential players regionally or even globally. It is not yet ready to join as a serious player. It's this lack of readiness and a trifle lack of knowledge on how to be ready that is hurting the capacity of the Bangladesh IT sector, however limited that is.​
 
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Asus launches 6 new laptops in Bangladesh

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Asus has recently launched six new laptops in Bangladesh, including the new dual-screen Zenbook DUO (UX8406) model. Image: Asus

Asus has recently launched six new laptops in Bangladesh, including the new dual-screen Zenbook DUO (UX8406) model. The other laptops recently released are ZenBook 14 OLED (UX3405), ROG Zephyrus G14 (GA403), ROG Zephyrus G16 (GU605), ROG Strix G16 (G614), and ROG Strix SCAR 18 (G834).

ASUS Zenbook DUO (UX8406), Zenbook 14 OLED (UX3405)

ASUS Zenbook DUO (UX8406) comes with dual-screen 3K 120 Hz OLED displays, an Intel Core Ultra 9 processor, 1.35 kg of weight, and a detachable full-size keyboard, touchpad, and built-in kickstand.

Zenbook 14 OLED (UX3405) features an ASUS Lumina OLED touchscreen, an Intel Core Ultra 7 processor, a 75 Wh battery, and 1.2 kg of weight.

Zenbook DUO (UX8406) is priced at BDT 2,52,000 and Zenbook 14 OLED (UX3405) is priced at BDT 1,60,000.

ROG Zephyrus G14 (GA403), Zephyrus G16 (GU605)

ROG Zephyrus G14 (GA403) and Zephyrus G16 (GU605) are gaming laptops with AMD Ryzen 9 processor and Intel Core Ultra 7 processor respectively, as well as NVIDIA GeForce RTX 4060 to RTX4070 graphics, ROG Nebula OLED display, and in-built neural processing units (NPU).

ROG Zephyrus G14 (GA403) starts at BDT 2,80,000, and ROG Zephyrus G16 (GU605) is priced at BDT 3,62,000.

ROG Strix G16 (G614), ROG Strix SCAR 18 (G834)

ROG Strix G16 (G614) is another gaming laptop with 14th Gen Intel Core i9 processor and NVIDIA GeForce RTX 4060 graphics. It also has a 16-inch display.

ROG Strix SCAR 18 (G834) is a high-end gaming laptop with 14th Gen Intel Core i9 processor, GeForce RTX 4090 graphics, 240 Hz 18-inch display, and advanced cooling technology for sustained performance.

ROG Strix G16 (G614) is priced at BDT 2,56,000 and ROG Strix SCAR 18 (G834) is priced at BDT 5,60,000.

According to Asus, these laptops are now available for purchase across authorised ASUS retailers in Bangladesh.​
 
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Bangladesh saw three internet shutdowns last year: report

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Bangladesh saw three internet shutdowns last year, and all of those were executed to crack down on dissent, according to Access Now, an organisation advocating for digital civil rights.

The organisation said this in their latest report, titled "Shrinking Democracy, Growing Violence", which was published on its website today. It said globally internet shutdowns have been used by authorities as a tool to enable and exacerbate violence.

India topped the list with 116 internet shutdowns last year.

"Governments continued to shut down the internet and critical digital communication platforms to muzzle expression, block access to life-saving information, and cover up heinous crimes against humanity," said the report.

It said governments intentionally disrupted internet access to coincide with important national events such as protests and political instability, elections etc with one aim -- to restrict the flow of information and control the narrative.

"Despite the fact that these shutdowns flagrantly violate human rights enshrined in national, regional, and international frameworks, governments deliberately imposed shutdown to advance their own political interests -- harming people and communities and endangering lives," it added.

Bangladesh has experienced shutdowns in five or more consecutive years since 2016, found the report.​
 
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Homegrown apps fail to take off

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While it is not an uncommon sight to see people typing messages in Bangla on their smartphones, the familiar colours and user interface make it obvious that they are not using communication apps belonging to local companies.

While mobile financial service providers and nearly all banks have gained traction in digital services in Bangladesh, the same cannot be said of communications apps built by the government or private entities.

In early 2020, a homegrown mobile application with capability to send messages and make voice calls was launched in Bangladesh. At the inauguration ceremony of the app, named 'Kotha', Zunaid Ahmed Palak, state minister for ICT, said it would be Bangladesh's Facebook, PayPal, Netflix, Twitter, and WhatsApp.

But now, almost none remembers the app. Although Kotha has good ratings on Google's Play Store, it has less than 2 lakh downloads.

However, Mahboob Zaman, chairman of Kotha Technologies, said the growth of the app is somewhat steady given their strategy. "We were trying to do organic marketing. Besides, research and development requires huge investment. We are trying to find an investor."

So far, the app has 4 lakh registered users, according to the company.

Sumon Ahmed Sabir, a technology expert, said copying something that has numerous versions, which local apps tend to do, is unlikely to lead to popularity. "Popular apps come with diversity, flexibility, efficiency and global expectancy that cannot be replicated."

"Besides, local apps cannot compete with these platforms due to the scale of their research and investment. Once a sector is monopolistic, it's not easy to break."

The government has also taken the initiative making communication apps at the cost of hundreds of crores, but all of them failed to attract audiences.

The government-funded app 'Baithak', a video-conferencing platform enabling virtual meetings and webinars similar to Zoom, was designed for government officials, but got very little response.

'Alapon', a Viber-like app developed by the government's ICT Division with the aim to streamline messaging and file exchange processes for government officials, was launched in 2016. Eight years later, the app no longer exists.

"Privacy is definitely a concern, if not a major one," Sabir added.

Meanwhile, the use of social media platforms and communication apps in Bangladesh developed by the global tech giants boomed in the past decade and made it one of the largest markets for them in terms of audiences. The top communication apps in terms of users are WhatsApp, Messenger, and Imo.

Facebook has a huge chunk of the audience, with nearly 53 million users in the country, which places Bangladesh among the top 10 Facebook-crazed nations as of January 2024, according to Statista, a German online platform that specialises in data gathering and visualisation.

Facebook also offers Messenger, integrating it as a standalone app for messaging, voice calls, and video chats.

There were more than 6.3 crore Facebook users in Bangladesh in February 2024 that has a population of about 17 crore, according to management and analytics platform NapoleonCat. It put the number of Messenger users at 5.7 crore.

When asked how many people in Bangladesh use WhatsApp, Meta, the parent company of WhatsApp, Facebook and Messenger, said it is unable to share the country-specific data.

Imo is also popular in rural Bangladesh due to low data usage, simplicity, and free voice and video calls. In 2023, a staggering 4 million new users from the country were integrated into Imo's network, the company said.

That took its monthly users in Bangladesh to 50 million, accounting for a quarter of its 200 million total users. Imo users in the country made 91.6 billion audio and video calls in 2023, among which 35.8 billion calls were international.

Bangladeshi users also made 676 million group calls last year through the app. The top five destinations for international calls were Saudi Arabia, the UAE, Oman, Malaysia, and Qatar.​
 
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