'Smart Bangladesh' to make the country the next tech hub in Asia

Zunaid Ahmed Palak:

In the last decade, Bangladesh has shown the world how revolutionary progress has been achieved by building the Digital Bangladesh vision as dreamt by our visionary leader Prime Minister Sheikh Hasina. It has now embarked on a task to build a Smart Bangladesh and make it the next tech hub in Asia.

Just a decade ago, Bangladesh had to import smartphones to meet the demands of the country's growing smartphone users. Now, Samsung, one of the world's biggest producers of smartphones, manufactures its latest high end devices in Bangladesh.

Since 2021, Samsung has started manufacturing its Galaxy S21 Ultra 5G phones in Bangladeshi plants. In the United States, this phone costs USD 1199.99 and if imported its cost would be more than BDT 1,66,000. Thanks to local assembling plants, Bangladeshi customers can now purchase this phone for only BDT 1,19,000.

It is not just Samsung, various companies such as Walton, Vivo and Oppo are also producing high-end smartphones in Bangladesh. In 2022, locally manufactured and assembled phones met more than 52% demand for smartphones.

The secret behind such an astounding transformation in the last few years is the current government's special focus on expanding ICT and heavy industries. The government's priority in this sector has been impeccably highlighted in its Smart Bangladesh vision.

Smart Bangladesh Vision 2041, as announced by Prime Minister Sheikh Hasina, is expected to achieve 0% poverty, 100% high-speed internet accessibility, 100% more than 5G smartphone penetration, a 100% inclusive, circular and cashless economy and expansion of ICT-based green industries by 2041.

All government services will be delivered electronically, government offices will be completely paperless and citizens will live in an absolutely inclusive, empowered and self-sufficient society.

Bangladesh started its journey towards Digital Bangladesh back in 2009 when the current ruling party Awami League came into power. There was no ICT ecosystem at that time. There were no government services that could be delivered electronically. Only 1% of the citizens had an internet connection. There were only around 50,000 IT professionals in the entire country. And export revenue from the ICT-based industry was only 26 million USD.

But the fact of the matter is: under the prudent and dynamic leadership of Prime Minister Sheikh Hasina, the government has radically transformed the ICT ecosystem and built Digital Bangladesh over the last decade. The government has digitised 2000 services to enable access. Out of 170 million people, 130 million people have a stable internet connection. Bangladesh currently earns over 1.4 billion USD annually by exporting ICT-related services.

The Bangladesh government has implemented this massive transformation by establishing a safe and friendly investment ecosystem for investors and entrepreneurs. The government has been providing attractive incentives for investors to expand the emerging ICT industry of the country.

For instance, IT companies can enjoy 10 years of corporate tax exemption and if they invest in one of the Hi-tech parks established by the government, the duration of corporate tax exemption can be 12 years. Expatriate professionals working in Bangladesh's ICT industry are exempted from income tax. Import duties for investors or entrepreneurs for importing capital machinery and other assets are exempted.

Besides these, the investors also enjoy exemption from VAT, double taxation, stamp duty, registration fee (if they want to purchase land) and a 100% profit repatriation facility. If investors or entrepreneurs invest in Hi-tech parks, they will also enjoy bonded warehouse facilities.

Such lucrative incentives have already created an unprecedented acceleration in Bangladesh's emerging ICT market. In the last five years, more than 2,500 startups have been established in the country and around 200 ICT startups are entering the market every year.

There are currently more than 400 companies in Bangladesh who achieved funding from renowned international investors such as SoftBank Group, Bill and Melinda Gates Foundation, Adventure Capital and many others.

Thanks to these investments, more than two million jobs have been created in Bangladesh's ICT industry in the last decade.

In fact, Bangladesh has reached a global milestone in expanding its e-commerce and digital financing. At present, Bangladesh boasts 181 million users of mobile phones making it the ninth largest mobile market in the world.

There are more than 188 million subscribers of mobile financial services (MFS) who are doing 14 million transactions every day. Bangladesh's MFS' such as BKASH and Nagad (state-owned) have earned many national and global recognitions for their innovative and committed customer services. Since 2011, MFS' are growing in Bangladesh at an astounding 500% growth rate.

Like MFS, Bangladesh's e-commerce market is also a hidden treasure for potential investors. Global players like Alibaba, Daraz and various national-level startups have already created a three billion USD e-commerce market in the last five years. However, this is only 35% of the total market size and within the next two years, the market can be expanded to address the demands of 80% of its consumers.

Bangladesh has also achieved a major breakthrough in expanding its digital device market. Even in the last decade, Bangladesh had to import almost all of its electronic products. However, nowadays Bangladesh has become an emerging exporter of electronic products manufactured in Bangladesh.

The country has created a 2.4 billion USD market of electronic devices and the annual growth of the market is 29.3%. Walton, a Bangladeshi brand has been exporting home appliance electronics and heavy machinery for almost a decade. Products of globally renowned brands like Samsung and Sony are now being assembled in Bangladesh.

In the near future, Bangladesh is going to be a big player in the global semiconductor industry. Bangladeshi researchers, in collaboration with their American counterparts, have developed semiconductors which have the highest operational temperature of 300 degrees Celsius, more than double that of conventional semiconductors.

Bangladesh government has allocated 10 million USD to establish Nano Lab to conduct fundamental research on semiconductors in Bangladesh. Besides, four Bangladeshi companies are already producing electronic chips and exporting them to different countries as well. More than 1000 trained Bangladeshi engineers are working in these companies.

The government is now giving a 10% export incentive for electronic chip exporting companies. If the current rate of growth continues, It is expected that Bangladesh will create a 20 billion-dollar semiconductor industry by 2041.

Such outstanding progress in the ICT industry has been possible due to the Bangladesh government's remarkable attention to creating skilled manpower in the ICT sector.

The ICT division has been providing a wide range of ICT training to millions of youths, particularly women all over the country to become freelancers and skilled IT professionals. Many of these trained youths have later become successful entrepreneurs, freelancers and IT professionals.

Bangladeshi freelancers earn 400 million USD annually through their skilled and cost-effective services. According to Oxford Internet Institute (OII) and World Bank reports Bangladesh's position in the online labour force is second. From 2010-2018, the income growth of IT professionals was around 10%, however, from 2019 to now, the growth rate has increased up to 40%.

The utilisation of these 'ready to deploy' resources can only be possible if the government can attract foreign direct investments and young entrepreneurs in the country's rapidly emerging ICT sector. And, Prime Minister Sheikh Hasina's government is more than ready for them.

Our next goal is to develop a smart economy within the next five years where we shall be able to establish a 100% cashless, circular economy. To achieve this goal, we would provide support to develop at least 5 unicorn startup companies (USD 1 billion company each). We have also planned to develop 50 unicorn startup companies by 2041. Our government will do everything possible to attract investors and entrepreneurs to invest in this sector and they will be the key players in realising our dream of Smart Bangladesh.

Bangladesh has a massive pool of millions of skilled youth, all the necessary infrastructure and an extremely conducive environment for young entrepreneurs and large-scale investment as well. The initiatives taken by the present Government are in line with the "Smart Bangladesh" vision and there is no doubt that Bangladesh is going to be the next tech hub in Asia and beyond.

Writer: Member of the Parliament and State Minister for ICT Division

Courtesy: The Business Standard