EXECUTIVE SUMMARY
The revolutionary advent of IT has accelerated the pace of day-to-day office, personal and corporate communication. However, even now, Bangladesh, despite its natural resources and easily trainable workforce, cannot cope with the evolution of technology when compared to most of the developed and developing countries. Of course, there are reasons behind the slow growth of technology in Bangladesh. Despite this IT implementation here has begun, albeit a little slowly in different private and public sectors. In Bangladesh, IT use is still in a backward stage in terms of information generation, utilization and applications. In the absence of any private entrepreneur, the government initiates and funds as many of these projects as possible.
Constructing a case study on Bangladesh IT scenario is an impetus to depict the real picture of its obstacles and pitfalls, and success as well, if any.
INTRODUCTION
This write-up topic presents the IT scenario of Bangladesh as a whole, not an organization in particular. Readers will be interested in knowing facts like:
(1) Is there any historical background of computerization in Bangladesh?
(2) Was there any chronological follow-up to next generation of computerization?
(3) How did the private, autonomous and public agencies play roles in different periods of time for computerization?
(4) What are the hindrances that prevent Bangladesh from attaining a sufficient pace for IT advancement?
(5) What is the current status of IT as a whole in the country?
Readers will only get an organizational view as the spokesman for the IT organization (Bangladesh Computer Council) will offer his views during the case deliberations.
BACKGROUND
Bangladesh gained independence from Pakistan in 1971, missing out on much of technological wealth from its predecessor. To begin, the atomic energy commission acquired an IBM 1620 in 1964. This was the first computer in the country. Next, in line were Admajee Jute Mills (the biggest Jute mill in the world) and United Bank Limited (now Agrani Bank) acquiring an IBM 1400 and 1900 series. In early 1970s Bangladesh Bureau of Statistics (BBS) and Bangladesh University of Engineering and Technology (BUET) also acquired mainframe and mini computers. Until 1970s, use of computers was limited to research and calculations. As the boom of microcomputers occurred throughout the world, Bangladesh was merely touched by it. Gradually, the non-government sectors providing support to socio-economic development in the country took lead to accept the microprocessor-based standalone computers (XT and AT type) for their operations, research and office management. This revolution led to the slow but steady use of Microprocessors and Pentium series by government and non-government offices. Also, the installation of UNIX and CP/CMS operating systems on most Mainframe and mini computers in the 1970s made the punch cards and reading systems obsolete. This was followed by the quick adoption of operating systems such as DOS, OS/2, Windows NT, XENIX, AIX, and Mac.
Network technology in Bangladesh started in early 90s with banks and international organizations establishing LAN to meet business and office requirements. Very few government departments opted to have their computer under network environment. First Internet provider began in 1996 as opposed to the traditional dial-up Internet service provider from outside the country. There are more than 50 ISPs in the country, 8-10 more prominent than the others. Bangladesh had missed the opportunity to set up fiber optic infrastructure: first in 1992 when it passed up an almost free of cost opportunity to be connected with an underground cable SEAMEU-2; and second in 1998 when it passed up a minimum cost opportunity with SEAMEU-3. However, recently, there has been an initiation for a connection to the undersea cable network APCN-2 and a tri-party contract agreement is under process.
Figure 1. BCC’s organizational structure
However, very few firms are capable of customizing software; hence this is a small industry in Bangladesh. The necessary ingredients to become a potential exporter of computer software and data processing services do not currently exist in the required quantity in Bangladesh. If Bangladesh wants to enter into this market, it needs to cross a number of hurdles within a very short period. The National Computer Committee offered some ideas for the enhancement of the IT sector, and therefore the BCC designed an organizational structure to carry its functionalities with humanpower strength of 37 as shown in Figure 1.
BCC proposed a budget of US $5 million in their fourth 5-year plan (1990-1995) for the following five proposed IT development projects:
(1) BCC’s Infrastructure Facilities
(2) National Information Technology Training Institute (NITI)
(3) National Data Network Authority (NDNA)
(4) National Software Export Bureau (NSEB)
(5) System Integrator Company Limited (SICOM)
Budget allocation was made for three of these projects for financial years 1991-92 and 1992-93. BCC also proposed a new project for establishment of a “data entry industry” in the country in1992. However, none of the BCC’s projects materialized due to some political controversy.
In fact, development of the IT sector and the role of BCC seemed to fade during the period between mid-1991 to mid-1996. In late 1996, a 14-member expert committee headed by a professor of BUET and members from different business and government bodies was formed by the government to study the feasibility of software export from Bangladesh. The committee submitted a report in September 2000 to the government with some very positive recommendations to boost the IT sector in order to create a favorable environment for software industry in the country and to export software. Following the recommendations of the expert committee, the government has taken some favorable decisions from 1998 and it is being continued to date, such as the following:
(1) Declaring IT industry as a thrust sector
(2) Patronizing of IT industry by different financial sectors, especially the banks
(3) Full exemption of import tax for all IT products (e.g., hardware, software, network, peripherals and accessories)
(4) Minimizing VSAT usage charge
(5) Increase of budget allocation for IT sector
In formulating an IT policy in the country, the government has formed a probe committee. The body is active and arranges workshops to draft policies on IT related HRD, procurement and usage guidelines, creating markets and developing infrastructure. The information age has also raised the importance of IT skills both in the workplace and civil society. A lack of such skills on a national level will pose a barrier to Bangladesh competing effectively in the global economy. Therefore, any IT human resource development policy will encourage widespread IT literacy and an adequate supply of IT professionals to support economic goals. The computer literacy rate in Bangladesh is very low due to lack of widespread IT education within the primary and secondary schools. The country needs to produce a large amount of skilled IT human power immediately to meet this challenge.
In the context of the world scenario of human resource, Bangladesh’s strength is relatively poor. At the university level all national public universities and in particular new universities have started producing computer science graduates through opening computer science departments. Steps have been taken to implement computer education in the secondary and higher secondary levels. Since the last few years vigorous efforts have been made to improve the quality of IT education and research. The massive and strong participation by young people and their urge to become computer literate and develop professional competence is the most encouraging observation.
BCC conducts short-duration professional efficiency enhancement training program in IT. It has started a standard IT training program in Rajshahi division. The Bangladesh Institute of Communication and Information Technology (BICIT) has been included in the Annual Development Program in the 1999-2000 fiscal year. This institute will impart standard IT education, training, standardization and certification of IT related course curricula and products.
BCC, since its formation in1990 to mid-1992, and some other private firms provided some training on few programming languages and databases, but not at a great extent. Taking this opportunity, several foreign franchisers started appointing their franchisees in Bangladesh. Presently approximately 20 foreign franchisers are operating their IT training centers in Bangladesh.
ANALYSIS
As mentioned, the computer revolution in Bangladesh began in 1960s. Mini (IBM 360, 370), mainframe (IBM 4300,4361) and microprocessor-based computers were used and programming languages such as FORTRAN, COBOL and RPG remained popular till 1980s. Database management systems used here were SQL/DS, DB2 and earlier version of Oracle. Some organizations still follow the old system, while others have upgraded from mainframe and standalone environment. The current IT usage scenario at a glance can be viewed as shown in Table 1:
Compared to India or Malaysia the IT growth in the country still has a far way to travel. India has attained this tremendous achievement in the past two decades, with liberal policies, patronizing IT entrepreneurs and dependable infrastructure. Government changes neither dampen nor discourage the policies adopted by their predecessor.
Conversely in Bangladesh, government has the sole monopoly. Policy makers came into effect with NCC, NCB and BCC amidst controversy. Different governments modify the IT policies affecting the growth of the IT industry. During 1991-1996, the IT sector was totally ignored. With no follow-up, it may be a while before
Table 1. Current IT usage scenario in Bangladesh
| Technology Usage Type | Technology Product Model | |
| Computer | Server | IBM RS/4000 and RS/6000, Sun Enterprise, HP Netra, Compaq Proliant, Gateway ALR, Mac |
| Client | Pentium (I, II & III), 486 processors, Mac | |
| Operating Systems | Server | UNIX, AIX NT, LINUX, Mac OS, Novel Netware, OS/400 |
| Client | Windows 9x & NT, Mac OS (Client) | |
| DBMS | Back Engine | Oracle, Sybase, SQL, Access, Informix |
| Front Tools | Developer 2000/6i, Delphi, Power Builder, Power Designer | |
| Language | PL/SQL, T/SQL, Visual Basic | |
| Programming Languages | Visual Basic, C, C++, Java, COBOL, RPG, OOP, J++ | |
| Web Design & Development Tools | FrontPage, Dream weaver, HTML Editor, XML, CSS, Java Script, ASP, Hot Dog | |
| Drawing, Animation & Multimedia Tools | Adobe Photoshop, Visio Drawing, Illustrator, Freehand, Corel Draw, Quark Express, Macromedia Director/Flash, Auto Cad, Sound Forge | |
| Back Office Mail Server MS Exchange Server, Linux, IBM AX | ||
Bangladesh can be at par with the rest of the world. Also, the acceptance attitude and capability to upgrade their knowledge and skills is always under question. There is no customized software due to thin response and lack of enthusiasm from the HRD and the entrepreneurs. The inherent bureaucratic and traditional attitude of the government has caused the major impediment in infrastructure.
DISCUSSION
The Committee formed by the Ministry of Commerce of the People’s Republic of Bangladesh has identified a few major problems that threaten the growth of software industry:
• Fiscal
• Human Resource Development
• Infrastructure
• Marketing
In order to make Bangladesh a potential offshore source of software and data processing services, this case makes short-term and medium-term recommendations for each of the above category, depending on the priority and importance.
Short Term
Fiscal
a) To exempt computer hardware and software from import duty, VAT, infrastructure development surcharge, import license fee, and advance income tax.
b) To allow a tax holiday for the export-oriented software and data processing services industry, for 10 (ten) years.
c) To give a 15% price advantage to local software developers over import of the same products.
d) To allow export of software and data processing services through sales contract, instead of letters of credit.
e) To bring the bank interest rate on loans/advances/ overdraft down to the level applicable to other export-oriented thrust sectors.
f) To create a special fund to be administered by the Ministry of Science & Technology for giving interest-free loans to teachers and students for purchase of computers and related equipment.
g) To create a venture capital fund of at least Tk.10 Crore at e-Export Promotion Bureau for equity participation in export-oriented software and data processing services companies.
Human Resource Development
a) To give BCC necessary authority to function as the primary facilitator to help growth of private sectors IT industry (such as National Computer Board of Singapore and Department of Electronics of India).
b) To introduce “basic computer skills as a mandatory subject and to set up Computer Science Department in all universities.
d) To ask BCC to update computer science course curriculum.
e) To empower BCC to develop IT related certification exams and to encourage employers of both government and private sectors to give preference to such certificate holders for jobs.
Infrastructure
a) To enact appropriate laws for the protection of intellectual property rights, as required under the WTO Charter.
b) To set up low-cost high-speed data and voice communication link with the USA and the UK, with a minimum speed of 2 MBPS. Private sector should be allowed to provide such service along with BTTB.
e) To make video conferencing facility available through VSAT.
f) To allow private sector to set up their own satellite communication links in order to obtain competitive price advantage and greater availability of communication facilities.
g) To create separate customs houses to handle all incoming and outgoing equipment/ documents so as to ensure clearance of such equipment/documents within 24 hours.
h) To create a central resource center at BCC with current topics, magazines, periodicals, software, and user/system manuals on IT related subjects.
i) To encourage software firms to form an association primarily to protect the interest of the software and data processing services sectors, in line with NASSCOM, ASOCIO, WITSA, and JISA.
Marketing
a) To mobilize non-resident Bangladeshi IT professionals and inform them about the incentives being provided by GOB and encourage their support to help Bangladeshi entrepreneurs.
b) To ban use of all pirated software in all organizations, both in the public and private sectors.
c) To encourage all government, semi-government, autonomous organizations and private sector companies to replace the manual system of documentation and records by computerized system through the use of locally developed customized application software.
d) To send marketing missions to North America/E.U. consisting of members from IT Associations and EPB, on a regular basis, with a view to publicizing Bangladesh software and data processing services capabilities as well as establishing personal contacts with the prospective customers.
e) To create a database and a Web site of all major organizations/institutions engaged in out-sourc-ing of software and data processing services.
f) To explore the possibility of obtaining business on sub-contract basis from the suppliers of software and data processing services in India, Sri Lanka and the Philippines.
g) To ask the concerned trade associations to organize international exhibitions/fairs in Bangladesh for IT products and services, in collaboration with Export Promotion Bureau.
Medium Term
Fiscal
a) To create a market promotion fund to be administered by Export Promotion Bureau for meeting the expenses of promoting Bangladesh as a potential source of software and data processing services to the overseas markets.
b) To create a special fund for supporting industry oriented IT research and development activities, to be administered by BCC.
Human Resource Development
a) To strengthen BCC and make it responsible for imparting higher-level special need-based training to the IT professionals who are graduating from the universities.
b) To incorporate industry placement program in final year of a computer science degree program.
Infrastructure
a) To set up an Information Technology Village (ITV) and to equip the same with all necessary facilities,such as high-speed communication, special custom bonded warehouse, resource center (hardware, software, manuals, topic), power and water supplies, and telecom facilities.
b) To ask BTTB to set up ISDN/HDSN/ADSL lines all over the country, and a fibre optic backbone.
c) To set up a communication hub in Bangladesh.
d) To form a standing committee to formulate and implement policies, strategies and action plans for promotion of export of software and data processing services.
Marketing
a) To ask Export Promotion Bureau to set up permanent liaison offices in the USA and the UK to be manned by professional marketers of IT field, who should perform and achieve definite quantified business objectives.
b) To ask BCC to create a database of Bangladesh IT professionals working at home and abroad, in order to obtain their help when needed.
d) To encourage IT industry members to take steps for ISO-9000 certifications and eventually ratings from Software Engineering Institute (SEI) of Carnegie-Mellon University of USA.
Other Recommendations
Bangladesh can also learn from the experience of its neighboring country – India, and can adopt the measures that helped India.
(1) Take advantage of the opportunities available in the conversion market of US $650 billion and the Eurocurrency conversion.
(2) Focus on multimedia market that is experiencing the maximum growth.
(3) Influence Microsoft Corporation of USA to involve Bangladesh in their plan to introduce Bangla as a language for Windows NT 5.0.
CONCLUSION
The fact that Bangladesh is far behind local and global IT status is established. Currently, a lot of decisions and steps have been taken in favor to uphold and patronize IT sector. Many entrepreneurs and investors are attracted to the IT sector. The need for an IT policy for the development of the IT sector within the framework of overall national development is now well recognized. The massive and strong participation by young people and their 20 urge to become computer literate and develop professional competence is the most encouraging.
KEY TERMS
Export-Oriented Software: A unit will be considered export-oriented if at least 70% of its revenue comes from export.
Long Term: Timeframe of three to four years to accomplish the recommendations.
Medium Term: Timeframe of two to three years to accomplish the recommendations.
NASSCOM: National Association of Software and Service Companies.
Short Term: Timeframe of a year to accomplish the recommendations.
Taka (Tk): Bangladesh currency is called Taka (1 US Dollar = 60.552 Bangladeshi Taka, 1 Bangladeshi Taka (BDT) = 0.01651 US Dollar (USD) as of March 14, 2004).
Tax Holiday: No taxes for export-oriented software and data processing services industry every 10 years.
