Digital disruptors: Let’s not get left behind

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With a demographic dividend, fast-growing market size, a growing number of tech-savvy people, improved ICT infrastructure and rising broadband coverage across the country, Bangladesh has the potential of realising economic gains as the disruptive-technology-backed Fourth Industrial Revolution takes over.

The World Economic Forum (WEF) claimed that about 800 million people worldwide could lose their jobs by 2030, while approximately 5.7 million unskilled Bangladeshis could be sacked from their jobs abroad and at home due to a lack of technological skills. For instance, in 2013, the RMG sector employed about 4.4 million workers in Bangladesh, a figure that dropped significantly to about 3.5 million by 2018.

Enterprises in Bangladesh should be well-versed in concepts behind automation, business intelligence reporting, decision support, workflow, management information system, enterprise resource planning, end-to-end process lifecycle, paperless office, cyber security, biometrics and other forms of technology-driven solutions.
Emerging disruptive technologies are advancing at an unprecedented speed, changing the world as they erase the boundaries among the economic, social, business and political spheres. Artificial intelligence, blockchain, IoT, Big Data, and precision medicine are just a handful of the technologies entailing digital transformation, putting enormous pressure on businesses and society at large (McKinsey Global Institute, 2013). To maximise the potential gains in productivity brought about by the new technologies, industries and societies must move from critical understanding to critical readiness to adopt the disruptive technologies across sectors and through relevant supply and value chains (BD4IR, 2019).

Nowadays, technology can decide whether an enterprise will survive or fail. Much of the world’s economy is now moving towards dot.com businesses like eBay, Amazon, Uber, Alibaba, etc. A digital enterprise can exploit the blessings of ICT and thereby produce the products and services desired by consumers. Moreover, entering the digital economy has become a survival decision for entrepreneurs since upgrading the traditional rule-of-thumb-based organisations with automation can now resolve myriad problems. 

Coming to Bangladesh, we need to jumpstart the development and application of digital enterprise tools and knowledge to further the sustainable development of trade and business in line with our upcoming five-year plans, Delta Plan 2100 and other national and sectoral priorities. Indeed, it is a pleasure to witness Bangladesh playing an active role in a number of World Economic Forum activities relevant to digital transformation.

It is inarguably a truth that the future of digital transformation in Bangladesh is exceptionally bright in the sense of growth prospects, further enhanced by the government’s initiative of creating a Digital Bangladesh by 2021. Notably, in 2018, the fiscal budget for IT development alone was above USD 980 million which shows a commitment to developing this sector.

Bangladesh has a sizeable young workforce and high-cost competitiveness (20-30 percent less than in India or Philippines) which is a major key value proposition for companies looking to outsource or offshore operations. Despite a large young workforce, government incentives, and cost competitiveness, issues of intellectual property, data privacy, skilled talent, and infrastructure remain significant challenges for scaling operations in the sector in Bangladesh (LightCastle Partners, 2019). Notably, Bangladesh currently ranks 129th out of 138 countries on WEF’s IP Protection Index.

However, there is always a light at the end of a tunnel as evident by leading global IT service providers like Wipro, IBM, TCS, NTT Data, Infosys, and WPP have entered our market through delivery centre set-ups and joint ventures with local companies (LightCastle Partners, 2019). Once we fully reap the merits of digital transformation, we are likely to see greater growth due to favourable government policies and foreign investments.

The emergence of globalisation and integration of regional economic growth have introduced new challenges as well as new opportunities for SME development in Bangladesh. Unfortunately, Bangladesh has failed to develop technology-oriented employment sectors. For instance, despite some positive technological advances, Bangladesh is still lagging behind in the adoption of e-commerce in small and medium-sized enterprises (SMEs). To combat this shortcoming, institutionalisation of B2B e-commerce in SMEs is essential. Otherwise, the common scenario of organisations’ unwillingness to give access to corporate information to suppliers, stakeholders and customers will remain a serious impediment of B2B e-commerce.

Following the developed world, a digitisation index for enterprises can be developed in Bangladesh based on parameters like ubiquity, affordability, reliability, speed, usability, skills, etc. Additionally, enterprises in Bangladesh should be well-versed in concepts behind automation, business intelligence reporting, decision support, workflow, management information system, enterprise resource planning, end-to-end process lifecycle, paperless office, cyber security, biometrics and other forms of technology-driven solutions.

The government is providing facilities to the ICT sector which are undoubtedly competitive compared to other regional peers. There is also 100 percent exemption on corporate tax till 2024, no restrictions on foreign ownership, dedicated facilities (IT parks), subsidised training programmes, and bodies like BIDA and LICT facilitating investment process, 10 percent cash back on export revenue promoted by the government, and much more.

Change of mindset is one big challenge for the Bangladeshi enterprises when it comes to digital transformation. Businesses should be made aware of these facilities so that they can exploit the potential of digital transformation. It will give them bargaining power on issues such as creating further awareness on tax, VAT, customs duty, cash incentives; declaring more cash incentives; engaging local IT/ITES firms in mega projects; easy access to finance; additional funds for research and development, etc (Latifee, EH, 2018).

It is encouraging that different trade bodies are seen initiating interactive sessions on the ins and outs of the Fourth Industrial Revolution (4IR) focusing on disruptive technologies where policymakers are sharing their valued insights. Furthermore, major trade bodies are putting forward proposals to concerned ministries to include 4IR issues and map the private sector’s role in the 8th Five Year Plan.

Bearing in mind these positive steps, there is high hope that new insights and actionable recommendations for the government will continue to flow in to accelerate the adoption and diffusion of digital disruptors to supplement Bangladesh’s growth journey.
Source: https://www.thedailystar.net

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