Boom in IT sector during the pandemic and beyond

Analysis from a primary research conducted to understand the degree of impact of Covid-19 on various sectors during the ongoing pandemic showed remarkable growth in the Information Technology sector. While many other sectors suffered during the lockdown and post-lockdown period in Bangladesh in 2020, the IT industry was rather blooming. 

Apart from forecasting promising export potential, the sector witnessed notable domestic growth with the wide array of services it now offers to end-users. While much of the credit goes to the government's support in the form of reliable communication and power infrastructure, the significant impact of the dynamic, young, educated, as well as competitive workforce, is also applaudable. 

The research, conducted by interviewing Managing Directors and CEOs of several IT companies, showed that whereas the majority of clients of local IT firms were largely public sector local education and financial institutions before the Covid era, a shift occurred towards catering to the private clients from both the local and international arena. The impact of the pandemic was rather positive in comparison to other sectors and widening business opportunities. 

Many interviewees pointed out about increasing orders from both local and overseas markets ever since lockdown was lifted in 2020. The domestic side showed a surge in the development of e-commerce platforms including 'Software as a Service (SaaS) based services, e-medical consultants and auxiliary medical services and many more online-based services, all of which encouraged cashless transactions. What was more striking was the performance of this sector and its workforce for the international clients. Whereas other sectors got badly ravaged during this pandemic on both supply and demand side, the data for the IT sector revealed increases in both of them. 

As the workplace went remote, a unique change was noticed with skill developments as well as migration of local skilful IT developers from local companies to companies located abroad. Foreign companies headhunted skilled and talented staff from reputed local IT companies to work for them remotely from home for handsome packages. Even though all the interviewees of the local IT companies said that they have lost a few of their valued and skilled star performers, they are happy for them and also for the fact that Bangladesh is now under the radar and being watched by tech companies around the world. This is certainly a good sign for the industry and for Bangladesh, as a whole. 

Additionally, remote work also gave the staff ample amount of time to receive training from online platforms and thus enriching their knowledge which subsequently added value to their organizations. The same was applicable for those who recently graduated and was looking for jobs. This enriched the overall talent pool and also showed the significance of the e-learning platforms in Bangladesh during the lockdown period. 

Findings from the survey show that there have been positive impacts with growing demands and widening business opportunities for the IT sector in e-commerce, outsourced ITes (Information Technology enabled services), SaaS, e-medicine/medical consultation, cashless transactions and so on. There were no other severe issues observed that could hinder the potential growth except for a few like the shortage of skilled IT engineers as well as difficulties with the import of sophisticated IT devices due to global logistics issues during this pandemic period. 

Nevertheless, the growth of this sector in the post-Covid era is inevitable as there is an abundance of the young and trainable workforce as well as a low cost of operation in Bangladesh. With the development of IT infrastructure that the government has given strong priority to, the sector is gradually becoming more attractive to foreign clients. 

Photo: Salahuddin Ahmed/TBS

The survey identified that most of the IT companies experienced a drop in orders when the pandemic started in early 2020. There were also cancellations of service contracts in the Covid-affected industries such as airlines, tourisms etc. and reduced orders for app development during the initial period. 

However, a fresh and larger volume of work orders from local and foreign clients started pouring in after the first few months into the pandemic. Due to the change in the nature of the market because of Covid-19, the companies have adopted new products and services, thus opening a variety of business opportunities and creating innovative services through the utilization of mobile devices as well as other technological advantages.

Services like on-demand shopping assistance provided by 'Shophopper' are quite revolutionary and are bringing about the "gig economy" as specified by Hisham Rumman, CEO of the company. A customer can hire a 'shophopper' for a day who then visits markets of choice of the customer to buy their required products. For example, if one wants to buy a pair of parrots from the Katabon market, he/she can hire a shophopper and the shophopper would video/audio call the customer from the market and buy as per instructions at the agreed price. Besides this on-demand shopping assistance, incremental innovations such as AI-based health checkup app, e-medicine/health, e-learning platforms were also witnessed during this period. 

The survey indicates that there is still ample room for making investments and re-investments in this sector, particularly in e-commerce, SaaS and other ITeS. Offshore software/application development, Business Process Outsourcing including customer services, call centres, ITeS such as data analytics/management information/data security, business process management etc. show good potential for future investments. 

However, there are various challenges that must be looked into to ensure this growth remains smooth. In addition to the government support required to utilize the new opportunities, the development of skilful engineers by enhancing their education and training, and enriching the curriculums at universities and training centres are necessary as well. Globally acknowledged quality certifications will also be beneficial for companies for identifying and employing potential staff, while at the same time attracting more work orders from local and foreign clients. 

Updating the curriculums will also help the students and trainees to acquire the global skills required currently and to familiarize themselves with industry conditions. The industry association, Bangladesh Association of Software and Information Services (BASIS), is deemed to play a vital role here by introducing various globally acknowledged training, courses and certificates that are on par with the current global standards. 

There will be more IT investments coming into Bangladesh in the coming days. The foreign investors are noticing the delivery of software and outsourced activities are being delivered efficiently and thus their confidence is increasing. Since talented developers and companies in Bangladesh are ready to work at lower prices than their foreign counterparts, many foreign companies are gradually becoming interested in Bangladesh in terms of providing new work orders, collaborations as well as plans of entering the market through joint ventures. 

The future of this industry will be even more attractive if the government aims to simplify issues circling around repatriation and taxations, allow easier mode of international payments like PayPal and also take measures to enrich the curriculums of teaching institutes and training centres in order to ensure that the country has a better supply of quality software developers and IT engineers in the near future. 

The author is an investment and business climate consultant of an Overseas Development Partner Organization.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.