Economy of Bangladesh

Searching for a new export sector

Searching for a new export sector

Md. Joynal Abdin

The Financial Express on March 7, 2010

LAUNCHING of the World Wide Web (www) and development of Information and Communication technology (ICT) have changed the concept of business operation. New avenues have been created for a better life. Everyday we are finding newer technology and processes and countries are spending on business diversification. Developing countries are competing hard to enlarge their export basket for economic progress. But Bangladesh is largely dependent on RMG for export. The country’s annual GDP growth has been at 5-6% rate over the last ten years. Now is the time to grow faster at a 7 – 8 % rate, for graduation from LDC to developing economy status. But no economy can graduate to such growth based on only a single sector. Though leather and leather goods, pharmaceuticals, ship building and remittances provide a good support to GDP growth, none of these sectors have flourished as much as RMG.

Now IT sector is offering us a potential source of foreign exchange earning. Developed countries have been outsourcing to meet their needs for IT software for quite some time. Spending on outsourcing grew from US$ 1,184 billion in 2002 to US$ 1,322 billion in 2003 and is expected to reach US$3,3991 billion by 2012. Bangladesh can earn $339 billion by grabbing only 1% of this market per year which is three times larger than our existing GDP. The United States alone spent $120 billion in 2008 on outsourcing.

Major outsourcing activities are website design & development, marketing outsourcing, graphic design, presentations & multimedia, programming, software & database, game design & development, implementation, networking, hardware & telephony outsourcing, writing, editing & translation, business consulting, management outsourcing, finance & accounting, sales & marketing, admin support (legal, medical, & accounting), advertising & broadcasting, illustration & art, photography & video, fashion & interior design, customer support service, technical support service, telemarketing service, Employee IT Help-desk Services, insurance processing, new Business / promotion, policy maintenance / management, software development, web development, data entry, and call center etc. Each of these broad sections of outsourcing may have many subsections.

Key elements for success in outsourcing business are: understanding company goals and objectives, a strategic vision and plan, selecting the right vendor, ongoing management of the relationships, a properly structured contract, open communication with target individual/groups, senior executive support and involvement, careful attention to personnel issues, near term financial justification and use of outside expertise etc.

Current major players in the global outsourcing market are India, China, Malaysia, Czech Republic, Singapore, the Philippines, Brazil, Canada, Chile, Poland, Hungary, New Zealand, Thailand, Mexico, and Argentina.

The main capital of outsourcing business is qualified manpower. We have a huge educated unemployed people who can be trained in IT to take advantage of this market. All equipment and services related to outsourcing (internet connection, computer accessories etc.) have to be made available at a cheaper rate. As it is a new sector, government has to take the responsibility initially of match making between local outsourcing entrepreneurs and international companies. Outsourcing exposition can be organised for awareness building and attracting international buyers. 

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