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IT exports rising though growth decelerates
MAHMUDUL HASAN
Information technology exports from Bangladesh grew in the July-April period of the just-concluded fiscal year on the bank of higher demand for IT-enabled services from global clients, official figures showed.
Local IT companies saw their earnings jump by 24.60 per cent year-on-year to $460 million in the first 10 months of 2022-23, according to the Export Promotion Bureau (EPB).
The higher earnings were driven by ITESs, which include graphic design, image editing and business process outsourcing. Receipts from ITES shipments surged 37.57 per cent to $382.31 million.
“Due to the Russian-Ukraine war, the global inflation rate has increased, which has forced technology companies in the US and Europe to lay off their regular employees and go for outsourcing in order to cut operational expenditures,” said Rashad Kabir, managing director of Dream71 Bangladesh Ltd.
“This has created an opportunity for local technology companies to grab markets in the regions and the recent jump in ICT exports is a reflection of that.”
The IT entrepreneur thinks if local firms can retain the current growth momentum, there will be a huge jump in the ICT shipment in the coming years.
“Developing skilled human resources should be the priority to ensure high quality and long-term services,” added Kabir, also a director of the Bangladesh Association of Software and Information Services (BASIS), the apex trade body of ICT firms in the country.
Export earnings from software, commuter consultancy and product installation and maintenance saw a drop in July-April of FY23.
The shipment of computer consultancy services fell 5.45 per cent to $29.67 million while installation, maintenance and repair of computer and peripheral equipment services witnessed a decline of 29.54 per cent to $6.44 million.
The international sales of software dropped about 18 per cent to $41.91 million.
Brain Station 23, which has around 700 employees, witnessed a slide in software export.
“Due to the global economic slowdown, the inflow of orders has slowed,” said its co-founder and CEO Raisul Kabir.
BJIT Group, the top IT exporter in Bangladesh, however, posted more than 30 per cent year-on-year shipment growth during the 10-month period of the last fiscal year.
“We have already reached all of our export targets,” said Masud Mehedi, chief operations officer of the company, which employs about 800 people.
Syed Almas Kabir, a former president of the BASIS, thinks it is crucial for Bangladesh to maintain positive growth in software exports.
“If we really want to turn Bangladesh into an IT hub, increasing software exports and learning about new technologies is essential.”
He said IT professionals should always keep themselves updated about software. “Unfortunately, our IT professionals don’t keep themselves informed about changing technologies.”
According to Almas, freelancers are mainly providing ITESs and Bangladesh has already displayed its strength in this area.
Although the overall IT exports climbed 24.60 per cent in July-April of FY23, the pace of growth decelerated compared to a year ago. During the identical period of 2021-2022, earnings shot up 52 per cent to $369 million.
And in the entire FY22, overseas sales from the sector surged 95 per cent to $592.06 million, EPB data showed.
BASIS President Russell T Ahmed, however, thinks the official statistics don’t reflect reality since the real earnings are much higher than the reported figures.
“This is because the official figures don’t include the earnings of many firms, including that of freelancers,” he said, adding that the current estimated annual IT export is $1.4 billion.
Industry insiders say there are many firms and freelancers that prefer to receive export proceeds through unofficial channels than formal platforms since they get a higher exchange rate of the dollar.