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Seminar on Reform for ICT Industry Growth
Global market for information technology which includes IT services, software and devices is nearly 3 trillion dollars. Our IT industry with nearly 2.5 billion dollars of revenue is present in a small segment only despite having one of the largest pools of IT related workers in the world, told Ashraf Ahmed, President of Dhaka Chamber of Commerce & Industry (DCCI) at a seminar on "Reform for ICT Industry Growth" organized by DCCI on November 9, 2024
He also said that we are one of the rarest countries in the world who can field such a large workforce. We need to up-skill our workforce, focus on delivering higher value added services and expand manufacturing capacity across the semiconductor value chain. We need to intervene on building expertise in design, assembly packaging and testing (APT) sub segments, and pursue opportunities in integrated device manufacturing (IDM) for the emerging IOT markets. He also added that in order to exploit its potential, it is essential to formulate short-term, mid-term and long-term strategies, proper implementation, investment, coordination between all the stakeholders, and including the public and private sectors. The software and services export sector has seen an exponential growth, reaching export revenue of around USD 1 billion in FY 2024, he added. Recognizing the skill gap and lack of infrastructure in this sector, he said that investment in targeted education, logistic infrastructure and training programmes are vital to bridge this gap. To reap the benefit of this emerging sector, we need to invest in up-skilling our graduates, developing IT friendly academic curriculum and infrastructure. Moreover for the high-end value added IT services he underscored the importance of R&D and export incentives.
Speaking as the chief guest, Lutfey Siddiqi, Special Envoy on International Affairs to the Chief Adviser, Government of Bangladesh said the present government is working in a changed environment, which needs to be considered by all. If the existing policies are properly implemented, it will be easier to do business activities along with citizen services and the current government is giving more priority to this issues. He said there were a lot of inconsistencies in our central bank's reserve, export statistics and other data, which the current government has taken several initiatives to address, as it is never possible to formulate a proper plan without proper statistics. He said the present government has already formed a number of reform commissions, whose activities are continuing, where citizens from all walks of life, as well as representatives of the private sector in particular, can present their proposals, based on which the reform activities will be more vigorous.
As Special Guest, Executive Chairman, BIDA, Chowdhury Ashik Mahmud Bin Harun said, after our ready-made garment industry, the IT sector has that potential to be the next RMG of Bangladesh. It is possible to expand domestic and foreign investment in addition to employment generation, especially for the young population through this sector. He said activities are continuing on behalf of the BIDA to simplify the permitting process for foreign nationals who working in the country. He also informed that a relationship officer will be engaged in the front office of BIDA and his job will be to facilitate all related services to the investors from the single desk. Regarding corruption he said that, only the digitization can eradicate all corruptions from any part of the government.
Mir Shahrukh Islam, Managing Director of Bondtein Technologies Ltd. in his keynote paper highlighted that more 2600 IT companies are in operation in Bangladesh employing more than 3,50,000 workers and the market size is more than USD 2.34 billion. With a limited scope of software services, Bangladesh does not have any device production capacity, he said. The largest export destination of IT products from Bangladesh is USA worth of USD226.8 million. To boost export he recommended to allow local ICT companies to set up overseas office and reinstating incentives against ICT export. He also said that ICT entrepreneurs are struggling to get easy access to low cost finance because of lack of friendly regulatory policies and stringent collateral requirements. Protection of intellectual property rights is the most important thing for the nourishment of this sector, he added. he also recommended for especial incentive packages for semiconductor industry like tax benefits, duty exemption and subsidies for R&D.
Bangladesh Bank Executive Director (ICT) Muhammad Zakir Hasan said there is no alternative to integrated planning for the development of the country's IT sector. He said the infrastructure development here is still not up to the mark, where there is a lot of scope for private sector investment to come forward. He mentioned that every year, many young people from our Universities finish their education in the IT sector, but due to lack of practical skills, they are not been employed, so it is essential to improve the country's academic curriculum to create skilled graduates through industry-academia coordination. He later proposed to form a steering committee with the participation of stakeholders for the overall development of the sector.
Syed Almas Kabir, former president of BASIS, said tax incentives can be given to encourage the ICT entrepreneurs. He emphasized on increasing the use of sustainable and green information technology. Almas Kabir said that due to the increase in transmission cost in the country's information technology sector, people have to spend more to get internet services especially in the rural area, which needs to be solved, while he stressed on the revision of telecommunication policy. He opined that the government could introduce Sovereign Credit Guarantee Scheme to provide loans to the IT entrepreneurs on easy terms. In this sector, Bangladesh still do only low-value IT services and products but we need to go for producing high-value products to get higher value from the importers. He also underscored the importance of a data privacy act. R&D in this sector should be incentivized, he emphasized.
Taimur Rahman, chief corporate affairs officer of Banglalink Digital Communications Limited, said the policy reform is necessary to increase foreign investment in the information technology sector. In particular, he proposed the amendment of the Telecommunication Act. He later said that the foreign telecom operators here in Bangladesh can play the role of Ambassadors outside to attract FDI.
Md. Liakot Ali, Additional Managing Director of Walton Digi Tech Industries Limited said that due to lack of competitive policy, we cannot attract FDI in the country. He also requested to do reforms the duty and tax structure for the IT and semiconductor industries. He also said that in the semiconductor sector Bangladesh has good number of design houses, however, public and private initiative joint investment can more harness the potential of hardware manufacturing opportunity in Bangladesh and it is very much possible by the local players, he added.
DCCI Senior Vice President Malik Talha Ismail Bari moderated the open discussion session, where discussants identified that insufficient infrastructure, lack of necessary policy support, complex credit support, lack of access to finance, shortage of skilled manpower and absence of supportive duty and tax structure, the desired development in the information technology sector is not being tapped in the country.
DCCI Vice President Md. Junaed Ibna Ali, Former Senior Vice President, DCCI M S Shekil Chowdhury, Convenor of ICT Committee of DCCI Rashad Kabir and members of the board of directors were also present in the seminar.
Published on: 2024-11-09