How Bangladesh Can Navigate Amidst the Wave of Changing Technologies
By Maimun Mustafa
How Bangladesh Can Navigate Amidst the Wave of Changing Technologies
At the onset of the 4th Industrial Revolution (4IR), Bangladesh is uniquely positioned to benefit. In 2019 the country experienced its highest ever GDP growth rate of over 8% and PWC predicts it will be among the top 30 largest economies of the world by 2030. However, to compete in the dynamic global marketplace, the nation cannot stay complacent with its non-diversified export-oriented growth, 81% of which has been attributed to the Ready-Made Garments (RMG) industry. To stay true to the development trajectory, this South Asian miracle economy has to effectively take advantage of the opportunities presented and overcome challenges posed by Industry 4.0.
A Brief History of Time
Each of the prior industrialization breakthroughs had a specific impact on reshaping the world of commerce.
The Shifting: Winds Of Change
The rapidly evolving nature of innovation brought on by the previous IRs is both a testament as well as a reason for giving due importance to Industry 4.0. The first two IRs lasted for approximately a century. However, their successor dramatically changed the earth, as we know it, in only 4 decades before giving momentum to its own successor. As the open flow of goods and services gave birth to modern globalization, the 3rd Industrial Revolution was important for the pivotal shift of economic power from the traditional colonial nations to Asian Tigers and BRICS countries. Therefore the impacts from this period had a widespread powershift in economies in comparison to its two predecessors. Technological change causing disruption of global business practices in exponentially decreasing time intervals provides appropriate signals for the adaptability requirements of any nation wishing to stay competitive in a global economy.
“The 4IR is unlocking a new cycle of economic growth. This innovative technological breakthrough will greatly impact our economy and bring changes in labour intensive job market. Bangladesh needs to formulate a strategic road map for industrial transformation considering 4IR technologies.”
– Osama Taseer, President, Dhaka Chamber of Commerce & Industry
Industry 4.0 broadly refers, among others, to the following aspects of technology: real-time use of data intelligence, system integration, simulation, additive manufacturing, cybersecurity, cloud computing, autonomous robotics, augmented reality, internet of things (IoT) and the concept of smart cities. The prospects opened by 4IR are diverse. We must bear in mind however that all concerned parties must comprehend which components to adapt, how to adapt or if possible at all to adapt to Bangladesh’s business context. If properly implemented the automation encouraged by Industry 4.0 can bring greater transparency via data-driven decision making, enhanced monitoring, improved resource allocation, more consumer outreach, and new employment opportunities.
Building Business Bundles
Integrating cyber-physical systems and Industry 4.0 standard technologies will allow us to enhance efficiency in our textiles and RMG units, our largest export earner. Corruption and inefficient use by employees may be reduced significantly by seamless automation and monitoring of data collection as we make way for pricing to be more dynamic and transparent along the supply chain. 3D printing could bring in new possibilities for intricate mass reproduction of delicate instruments for extensive commercial production. These production practices can be replicated in other consumer and capital goods industries. Big data and artificial intelligence can assist in the prevention of market force distortions from farm to table or from sourcing to factory. Furthermore, it would give rise to efficient modalities for diversification to other export-oriented industries than rely on just RMG.
The spiraling growth of 50+ scheduled banks in Bangladesh can also benefit from augmented reality and virtual kiosks in relation to the difficulty of introducing increasing traditional ATMs. This could allow banks to bring 70% of the population under 40 under the banking net, especially in rural areas where existing policies have failed.
Automated data transfer incorporating IoT for creating smart cities could be a Godsend for Bangladesh’s capital Dhaka that faces a loss of 5 million working hours every day due to traffic congestion and poorly managed transportation services. As the other major cities also become megacities Dhaka’s successful policies could be integrated in other urban areas as well.
Making the Market
As more industries mushroom with the adaptation of these standards, the consumer will become aware of how to find new use cases through exposure to such technologies. After usage, adaptation will be followed by innovation as both users and producers can play with the opportunities and bring new solutions domestically or through international export of ICT services. Collectively this may translate to greater availability of newer business cases for complementary services like 5G telecommunications. At a panel at INFOCOMM 2019 in Dhaka, Mahtab Uddin Ahmed, CEO of Robi Axiata Limited and Michael Folley, CEO of Grameenphone stated 5G currently has few market opportunities
Defending Digital Development
With more virtualization and digitization through networks comes the risk of cyber threats. The recent cyber-attacks targeted at local banks as well as the infamous Bangladesh Bank cyber heist is fresh on policymakers’ minds. As such the demand for this industry would grow and build an ecosystem for developing local cyber technical professionals that can battle global threats.
Job Diversion and Creation
Many fear that due to artificial intelligence and robots replacing human jobs, there would be employment displacement brought on by 4IR. McKinsey states that as a result of automation an estimated 400 to 800 million current occupations could be displaced but also forecasts the overall creation of 555 to 890 million new employment opportunities by 2030. As such the net employment opportunities override the losses substantially.
Education for Employment
‘As high as 50% of jobs in developing countries are vulnerable to 4IR, although most jobs have some components which cannot be automated,” opined Syed Almas Kabir, President of Bangladesh Association of Software and Information Services (BASIS), who is also a Director of the apex business body, FBCCI. Mr. Kabir further states, ‘If education is unable to keep pace with the changing demand for skills, those who already have the skills to use new technologies will earn even higher premiums. Job polarisation will increase the supply of labor competing for lower-skilled jobs. To mitigate this crisis, existing labor force should be up-skilled and re-skilled to make effective usages of 4IR innovations transforming their jobs.’
Recently Education Minister, Dr. Dipu Moni announced the inclusion of mandatory technical education by 2021 in all schools. If the training has curriculums that address continuous skill enhancement, the Bangladeshi workforce may compete with both quality and quantity in the wake of 4IR.
“The cognitive ability to adopt constant flux of change driven by 4IR should be developed among all major stakeholders, and in the society as a whole. Education and skill development should go through transformation—focusing on cognitive capability and lifelong learning to prepare us to leverage 4IR in our favour.”
– Syed Almas Kabir, President, Bangladesh Association of Software and Information Services (BASIS) & Director, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI)
Though Bangladesh has evolved on numerous levels it lags behind in the willingness to progress in some significant areas. Cashless transactions remain a distant dream, with 94% of the population still preferring to deal with paper money. According to a Bangladesh Bank report, at present only 8 percent of the utility bills and 2.6 percent of the salaries are paid through digital platforms. POS systems are very less as high costs deter SMEs from using them. World Bank data highlight that around 70% of people in the country still do not have access to traditional banking. This is especially prevalent in rural areas and contributes to imbalanced growth. The online VAT payment system developed by the government over the years was abandoned due to pressure from businesses’ unwillingness to incorporate digitization. As the global community progresses on such issues numerous Bangladeshi businesses and consumers remain isolated.
What prevents the general Bangladeshi household in using the traditional cutting blade in place of the kitchen knife? Why do the majority of people prefer to wash clothes manually or cannot afford to use washing machines? Why does the general commuter not respect traffic rules? The answers to these questions imply that the introduction of advanced technology is useless if the people, for whom it is intended, cannot or do not choose to benefit from it. The apprehension of loss of jobs by workers and lack of desire in adopting 4IR standards by management may act as frictional factors to take advantage of Industry 4.0 in Bangladesh. It is only when foreign buyer enforced compliance forces these firms, companies rush to integrate without properly strategizing in advance. Before we even move on to complex technologies we must ask ourselves why we are immobile in much simpler areas? Overcoming this cultural inertia should be a top priority for Bangladesh as a nation if it wishes to come on top in 4IR.
Bangladesh can benefit immediately in some industries while certain opportunities require investment for seeding the future. Just like a building has to be built from sound foundations, Bangladeshi industries must incorporate the principle learnings from the first 3 Industrial Revolutions in existing processes before they can hope to successfully compete in Industry 4.0.
Bangladesh can benefit immediately in some industries while certain opportunities require investment for seeding the future. Just like a building has to be built from sound foundations, Bangladeshi industries must incorporate the principle learnings from the first 3 Industrial Revolutions in existing processes before they can hope to successfully compete in Industry 4.0. Developed economies in the 3IR remedied issues like managing organizational change, ensuring adequate compensation, working hours, adopting agile approaches, providing enhanced consumer utility and customer service. It is important to recognize that the growth of the middle class is fundamental as well as those of SMEs. These could be key takeaways for Bangladesh as it strides out from the 3IR.
The 4IR has the potential to fundamentally transform the nature of work, commerce and how society functions. It is an iterative process where organizational culture needs to adapt in line with technology. The people who use the technology must have the skills to grow with the change in innovation. It is vital to not get lost in the sea of intriguing opportunities though. Bangladeshi industries must navigate through diversified 4IR waves that provide the business value pertinent to what they can do differently and take advantage of in the global as well as local supply chain.