Freelancing boom and its potential for the Bangladesh economy

Hiren Pandit:

The digitalisation of many professions around the world has contributed to creating a new, competitive and innovative labour market. Self-employed people who mostly work from home have been sharply rising in numbers in the past years than in the past two decades. It took a pandemic to make some people realize that you don’t need to travel for work to sit in front of a computer connected to the internet. People have realised that the idea of a “safe and secure” job is just a dream that can collapse at any time. There’s no need anymore to work at a specific location in a specific city or town, we all live in the internet’s global village.

Freelancing offers work opportunities that anyone with an internet connection can do, with the option of choosing from a variety of job descriptions on many given platforms. The popularity of freelancing is attributed to many factors, including flexibility, competitive pricing and the wide array of opportunities available. This growing field of work combined with economic underdevelopment compared to more developed economies has contributed to the formation of large freelance communities.

According to a survey conducted by the Centre for Policy Dialogue (CPD), there are 50,000 Facebook-based entrepreneurs in Bangladesh at present. With around 43 million Facebook accounts in Bangladesh (Statista, 2021), the platform gives businesses opportunities to contact clients on a far wider and diverse scale. The government is trying to provide necessary policy support and incentives to stimulate the IT sector. The government has recently started issuing freelancer ID cards, which are providing identity to approximately 650,000 self-employed professionals in Bangladesh. To encourage the freelancing sector in Bangladesh, Bangladesh Bank instructed banks to provide necessary loans and credit cards to the IT freelancers.

With the widespread use of the internet and smartphones, the very nature of work has been transformed over the past decade or so. The employee-employer dynamic that was present in the previous century has started to evolve, paving the way for new forms of work that were unimaginable two decades ago.

Over the past decade, Bangladesh has experienced an online freelancing boom and is the world’s second-largest supplier of online freelancers currently. The proliferation of Bangladesh’s digital infrastructure enabled the platform economy to rapidly expand over the past years, both in terms of the number of platforms and the number of total customers.

Freelancing offers work opportunities that anyone with an internet connection can do, with the option of choosing from a variety of job descriptions on many given platforms. The popularity of freelancing is attributed to many factors, including flexibility, competitive pricing and the excess of opportunities available. This growing field of work, combined with economic underdevelopment compared to more developed economies has contributed to the formation of large freelance communities.

With the advent of rapid digitalisation, many developing countries like Bangladesh are focusing on the digital economy, a global market for digital outsourcing. The digitalisation of a country’s economy not only drives innovation in its service industry but also fuels domestic job opportunities, enabling faster economic growth. In the quest to lower costs and risks, many large corporations in developed nations like the US, UK and Australia are turning to IT outsourcing from countries including Bangladesh, leading to a recent boom in freelancing.

Freelancing jobs include everything from computer programming to web design, tax preparation and search engine optimization. This has generated a wide range of new opportunities for people in emerging markets that did not previously exist. Asia has become the number-one region for providing outsourcing services to the rest of the world.

In the last few years BPO (Businesses process outsourcing) sector has gone through massive expansion and it has achieved 24 per cent year growth year after year and shows signs of more expansion. When the sector was first introduced back in 2008 it only made $4 million in revenues and companies had to take the license from the telecom regulator but they closed their operations very quickly but as days have gone past by the telecom regulations have bought in significant changes to their rules and thus the earnings rose by 17 times since.

India is the largest supplier of online labour, with close to 24 per cent of total global freelance workers, followed by Bangladesh (16 per cent) and the US (12 per cent). Different countries focus on different sectors of freelancing services. For instance, technology and software development are dominated by Indian freelancers, while Bangladesh is the top supplier of sales and marketing support services. The platforms are flourishing, utilizing cheaper employment compensation, as labour laws of countries do not recognize this new type of workers and their contractual framework. As more and more people depend on the platform economy for their employment and livelihoods, there is a moral, economic, legal, and political imperative to ensure that these workers are treated fairly in the platforms they work for.

The 200-million-dollar worth of a market share is currently owned by Bangladesh and if Bangladesh can utilize this great opportunity this sector can become the second biggest earner of foreign currency. Bangladesh has another great plus point which is its population. There are more than 110 million people who are young and they can play a vital role in the rise of this industry. Currently, Bangladesh is the 44th largest market-based economy and it is one of the fastest growing economies in the world. The country is constantly growing and this has grabbed the attention of the developed countries who now plan to outsource their IT and ITES (Information Technology Enabled Services) products. They hire thousands of freelancers through different platforms like Upwork, Freelancers and Balancer. Bangladesh plans to reach more than $ 5 billion outsourcing revenue by 2022.

ICT ministry has started to provide 10 per cent incentive to the agencies who are bringing money through legal channels. But most of the time this money is not coming through legal channels such as banks since PayPal is not used in Bangladesh for which we are not getting the potential remittance! If we can control this flow of money through the channel our rate of earnings would boom at a great volume!

It is a very well-known fact that there is a lack of job opportunities in Bangladesh but due to the BPO sector alone it is now providing jobs to 45,000 people, which at the start had only 900 people working in the whole sector, shows the promise this sector holds. The reason behind the rise of this sector is also because of the government’s rules and regulations. The government is offering some incentives. By 2024 there will be 100 per cent tax exemption, for foreign employees 50 per cent tax reduction for the first three years, for rental and utilities 80 per cent vat exemption, up to 10 per cent cashback on total export revenue and no restriction on foreign equity holding. With such lucrative incentives offered by the government, this is why companies are now more inclined to come here and build up their companies. Bangladeshi freelancers currently have a lot of US and UK clients and it is the second-largest freelancing talent supplier in the world.

Bangladesh is one of the countries that has a huge youth population. Of its 164.7 million people, almost 65 per cent are under the age of 25. This vast, young and strong human resource, however, is still lacking in the knowledge necessary to thrive in the competitive global market. Although freelancing as a career has gained in popularity over the last few years, thousands of Bangladesh’s young people require proper training and government support to help them take advantage of this opportunity.

Some freelance jobs are small and take less than a day. Other contracts can last for years. Freelance IT work includes data entry, website and software design, mobile application development, graphic design, search engine optimization, social media marketing and more. Freelancing is very important across the world where millions of individuals are hired, generally for piecemeal tasks, using smartphone apps developed by technology start-ups. It refers to a free market system where short-term and flexible work is prevalent and businesses frequently recruit independent contractors, project-based workers, and freelancers rather than full-time employees. Many complicated and time-consuming jobs have been eased and accelerated due to rapid technological improvements, making freelancing work easier.

Writer: Research Fellow, BNNRC

Source: The Business Post