The digitalization of a country’s economy initiates innovation in its service industry, promotes domestic job prospects, and thus leads to greater GDP Growth. To decrease expenses and risks, many large corporations in developed nations like the U.S., U.K. and Australia are reverting to ICT outsourcing from countries including Bangladesh. This South Asian nation with its national policy ‘Digital Bangladesh’ has the potential to lead the global competition in the digital economy. The pandemic may have just accelerated Bangladesh’s rise to the top.
In an ever-changing world, digital transformation is effectively driving the course that the globe takes. What is digital transformation? It is not about utilizing updated technology to do what we are already doing, but also about how we can do it more effectively. The international economies are undergoing digital transformation at never before seen velocities and the pandemic has catalyzed the expansion of the digital economy.
Entering the Digital Economy
According to Deloitte, the digital economy is the economic activity that results from billions of everyday online connections among people, businesses, devices, data, and processes. Its strength lies in hyper connectivity i.e. the growing interconnectedness of people, organizations, and machines that are an outcome of the Internet, mobile technology and the internet of things (IoT). The digital economy is disrupting traditional ideas about how enterprises are organized; how businesses engage; and how customers acquire services, information, and goods. This has enabled many national players from non OECD countries to grow as global leaders in this new arena of possibilities.
Flying High with Freelancing
Freelancing jobs refer to those vocations ranging from computer programming to web design, tax preparation, and search engine optimization. Freelancing has created bountiful opportunities for people in emerging markets that were previously nonexistent, with Asia becoming the number-one region for providing outsourcing services to the world.
Bangladesh’s Solid Base
Bangladesh is projected to achieve a 7.5 per cent GDP growth rate in the fiscal year 2020-21, making it the second highest among south-east Asian countries, according to Asian Development Bank report. The United Nations Conference on Trade and Development (UNCTAD) in a 2019 report stated that Bangladesh has laid the essential foundation for a technology-driven and skill-based digital economy but still needs to put in place a comprehensive national e-commerce strategy and improve delivery logistics. The Digital Bangladesh initiative is part of the country’s Vision 2021 national development plan which is supported by the Access to Information (A2I) initiative currently led by the Information and Communication Technology (ICT) Division. The A2I is a national initiative that has guided growth in the ICT sector and the overall digital economy ecosystem of the country. Since its beginning in 2010, the information and communications technology sector in Bangladesh has grown at an astonishing average pace of 40% a year. The technology industry is a natural fit in the country’s development trajectory to create jobs for the 110 million under 35-year-olds in the nation of 160+ million people. Having 2,000 software companies and over 500,000 people skilled in IT adds to the nation’s tech prowess. Bangladesh has already become the second-largest supplier of online labor, according to the Oxford Internet Institute (OII). Around 500,000 active freelancers are working regularly; 650,000 of them registered freelancers in the country and they are generating $100 million annually.
Commerce in the Age of Corona
The economies of the globe have been demolished by the wave of the Covid-19 virus. Till now, the deadly pandemic has affected over 100 million people, killed 2.5 million people in 219 countries and it is sadly not slowing down. As most nations are struggling for economic survival, the situation is completely different for the rising tiger of SouthEast Asia, Bangladesh.
The Tech Tiger
When most large companies or SMEs were struggling for survival in 2020, the scenario was completely different for Bangladesh’s ICT industry. This is not uncanny as most of the ICT companies in Bangladesh have seen an annual growth in the number of local and international work orders received in the last quarter of 2020. However, according to a brief of the Bangladesh Association of Software and Information Services (BASIS) the ICT industry initially faced enormous challenges from March to May when the companies saw around 50-70 per cent fall in revenue. Nevertheless, the tech companies bounced back in June 2020 when the nationwide lockdown was withdrawn.
Perks of the Pandemic
While the cost of the pandemic has been heavy on all of us, the tech sector has seen an upsurge in growth. The rising need for automation and applications both in local and international markets had signposted the adoption of technology and automation would be vital for the new world order. Due to limited mobility during this time, e-learning, online education, telemedicine and online entertainment have seen a significant rise in demand. Furthermore, the age of the Corona virus has emphasized the need for ushering in the age of Industry 4.0, Fintech, Internet of Things, Blockchain, Big Data, robotics, as necessities rather than luxuries.
The status quo is a brilliant facilitator of digitalization for both individuals and enterprises. Those who did not wish to do it must accept the needs of the new world order.
Another sector that will boom more in the coming days is E-learning as seen from the use of Zoom and other platforms to keep education available even though physically attending schools, colleges and universities are possible. What seemed a distant reality to cut the gap between the quality and reach of education available in the capital and rural areas is now no longer a distant dream.
In the lockdown, due to the inability to physically visit shopping areas, the e-commerce sector has boomed and will continue to do so in the days to come. Digital payment is expected to take over cash transactions quicker than perceived, as customers become comfortable with online shopping. Daily necessities, gadgets and pricier items are now being bought over the internet. There have been over Tk 30,000 crore business through e-commerce platforms with over 2,000 e-commerce business shops nationwide. In addition to this is the growth of F-commerce, selling products through Facebook and district and rural areas, especially women, have joined this trend. This can only grow in the coming days.
Bangladeshi citizens may never have perceived that they will consult with physicians through virtual platforms. Nevertheless, the new normal has made it the next normal. Urban and rural patients are being able to take their treatments from the best doctors in Dhaka. This is also a trend that has shot up all over the world.
To cut costs and optimize processes in light of the current crisis, organizations themselves are putting data and artificial intelligence (AI) at their core.
AI can be an enabler of digital transformation covering multiple cases such as digital relationship management, adoption of digital channels, digital identity verification, digital on-boarding, digital fraud prevention and many others.
Bangladesh has already taken great strides in the public sector by the digitalization of more than 3,000 government services by 2024. The Bangladesh National Portal, national identity verification system, e-GP platform, biometric SIM registration system are already active. Moreover, over 100 online citizen services are being implemented currently. Other countries like Bhutan, Maldives, Afghanistan along with African countries like Nigeria, Kenya, Rwanda and Cameroon are now emphasizing more on digital governance. Bangladesh can look to these as future markets as an e-governance solution provider.
While it was widely accepted that the ICT industry had the possibility to positively disrupt Bangladesh’s economy, the essential question now lies in whether Bangladesh would take the lead in the global ICT market competing with rival nations Vietnam, Philippines and India, etc.
Firstly, export diversification should be a principal focus. Alongside the developed countries, but also the developing ones to deliver advanced technologies like AI, Blockchain, Big Data and IoT services. The African continent and some nations in central, as well as, South East Asia are going to be the major markets for e-governance services in the next decade. Secondly, faster affordable and reliable internet, computer related gadgets and electricity supply should be more accessible to the general public. Third, Government to Government (G2G) level partnerships and diplomacy should be extended further to grab the opportunities Fourth, great attention should be emphasized on human resource skilling in the IT sector to focus on human capital development for the global digital economy. Moreover, an easy payment system especially for freelancers-to receive payments from abroad-needs to incorporate. Finally, initiatives should be taken to close the industry-academia demand and supply gap. All of this will assist in addressing the global and local demand, ensure sustainable supply of quality workforce, boost forex reserves and create more employment opportunities.
Changing the tide
To become the leader in the global digital economy Bangladesh is taking great strides forward. If it can empower its 163 million people (around 65% of which, are under the age of 25) with the knowledge, access and infrastructure necessary to thrive in the competitive global market, the sky is only the limit for this digital economy tiger.