Balancing act: The journey of Bangladesh's IT industry between protectionism and global aspirations

Amid the vibrant hustle of South Asia, Bangladesh positions itself on the launching pad of the global information technology arena. It is a land ripe with potential, ready to leverage the energy of its youthful workforce and echo its past economic triumphs on the digital stage. The nation now faces a pivotal challenge, one that will define its future success: how to establish a robust IT industry that can compete internationally while fostering an environment that encourages local innovation and growth. This delicate balancing act — nurturing 'Global Competency Acquisition' and 'Local Ecosystem Efficiency' — sets the course for the country's advancement in the IT sector.

Global Competency Acquisition embodies the process of assimilating knowledge, best practices, and technological prowess from established international tech giants. Conversely, Local Ecosystem Efficiency focuses on building indigenous capabilities to deliver IT services in a cost-effective and expedient manner.

The interplay between these two concepts will shape Bangladesh's approach to joining the ranks of the world's IT leaders. As such, the government and industry pioneers look to the nation's thriving readymade garments (RMG) sector and the flourishing IT market of their Indian counterparts for strategic insight. These models stand as testaments to the power of aligning local specialisation with global standards and offer guidance for the IT sector's onward journey.

BANGLADESH'S RMG SECTOR: A BLUEPRINT FOR GLOBAL MARKET PENETRATION

The meteoric rise of Bangladesh's RMG sector stands as a masterclass in strategic economic positioning and resilience. From modest beginnings, the industry has catapulted to become the world's second-largest apparel exporter, not solely through cost efficiencies but through strategic global market integration.

The RMG success story is rooted in robust government policies, a commitment to capacity building, and above all, a readiness to collaborate with international partners and markets without heavy reliance on protectionism.

This openness to the global economy allowed for a critical exchange of knowledge and practices, cultivating 'Local Ecosystem Efficiency.' Bangladeshi manufacturers developed agile production systems that could swiftly adapt to fashion currents and deliver products across the globe with remarkable speed and efficiency.

Facilitating this transformation was a deliberate emphasis on 'Global Competency Acquisition.' The RMG sector did not grow in isolation; it thrived on partnerships, technology transfers, and skill-sharing initiatives with international entities.

These cross-border engagements enabled Bangladeshi manufacturers to upgrade their processes, embrace global compliance standards, and infuse innovation into their workflows—ultimately capturing the trust and business of top international fashion brands.

The experience of the RMG industry illustrates that for Bangladesh, embracing global best practices and standards while cultivating a strong local framework is not a paradox but a synergistic strategy.

By fostering an environment that invites international collaboration and knowledge exchange, the IT sector can secure its place as a formidable contender on the global stage—one that is as dynamic and forward-thinking as the digital era itself.

INDIA'S IT SECTOR: A BENCHMARK FOR VERSATILITY AND GLOBAL COLLABORATION

In the global IT narrative, the ascent of India's information technology sector is a remarkable chapter. India's model of growth in the IT domain is characterised not just by the scale but by the strategic depth it has embraced—a harmonious mixture of both Global Competency Acquisition and deep Local Ecosystem Efficiency.

Global collaboration has been a cornerstone of India’s success. Indian IT companies quickly recognised the value in forging partnerships with multinational corporations, which brought not only immediate business opportunities but also long-term benefits such as knowledge transfer, skill development, and exposure to global business practices.

The Indian IT workforce thus became adept in handling complex projects, with expertise spanning across numerous technologies and domains—a testament to effective Global Competency Acquisition. This movement towards a knowledge-based economy set a precedent for strategic collaboration and skill enhancement.

For Bangladesh, India’s example is instructive. To create a versatile IT contender, embracing a multi-faceted approach that values both specialisation and adaptability is essential.

Bangladesh's IT sector should strive to build its global competence by engaging with international tech firms, participating in global dialogues, and forming strategic partnerships that would facilitate transfer of technology and best practices.

Emulating India is not about copying its model identically but rather adopting its approach of versatility and symbiotic global engagements.

A STRATEGIC SHIFT THROUGH GLOBAL COMPETENCY ACQUISITION AND LOCAL ECOSYSTEM EFFICIENCY

As Bangladesh boasts an expansive IT and ITES sector, with over 4,500 firms and 750,000+ ICT professionals, the current challenge lies in harnessing this domestic momentum for global competition. The burgeoning domestic market, having achieved more than $1.4 billion in size with projections indicating a forecasted growth of 22 percent between 2018-2025, underscores the tremendous economic potential.

Meanwhile, the explosive growth of freelancing, with 650,000+ registered individuals, alongside the strides in BPO ($300 million market size in 2018 and 71 percent growth since 2012), e-commerce (over $2.5 billion in market size in 2020 and an expected $3.6 billion by 2023), and mobile and internet usage (180 million subscribers and 128 million users respectively, and an engaged social media audience of 62 million), reveals a highly engaged digital workforce and consumer base.

However, despite these robust indicators, the sector's international reach largely remains anchored to the unstructured contributions of freelancers whose efforts, although substantial, do not necessarily mirror the scale and consistency required to contend on the global stage.

To usher in a new phase of structured and standardised industry growth, Bangladesh can draw on the blueprint laid by India's IT ascension, where welcoming global IT giants fuelled a revolution of professionalism, entrepreneurship, and international compliance within the sector.

Entrusting fostered relationships with these titans offers more than just employment opportunities - it paves the way for intellectual and experiential transfer.

Additionally, the domestic workforce, including freelancers and emerging talents, can attain new levels of proficiency through exposure to global operational frameworks, quality norms, and innovative technological landscapes.

Given these enhanced capabilities, Bangladesh could dramatically increase its share of IT exports beyond the $1 billion milestone of 2019, building upon the solid 21 percent growth rate from 2013-2019.

Global companies setting up shops in Bangladesh create fertile training grounds where freelancers and new IT professionals can develop into internationally-minded experts. This transfer of knowledge and practice cultivates a breed of global entrepreneurs, mirroring the industry trajectory seen in India, wherein the presence and practices of international firms effectively upskilled the local workforce to eventually lead their enterprises.

To capture this opportunity, Bangladesh must prioritise improving industry standards domestically, creating an environment conducive to international investment, and signalling readiness for global integration.

Strategic policies and incentives that attract such firms, coupled with rigorous adherence to global quality benchmarks, will strengthen the capacity of local firms and individuals alike.

In tandem, there should be a concerted effort toward skill enhancement and continuous learning. Initiatives could include establishing IT excellence centres in partnership with global giants, easing regulatory frameworks, and fostering innovation hubs that encourage creative problem-solving aligned with global trends.

Realising this vision requires deliberate and concerted actions from both public stakeholders and private enterprises.

By incentivising the entry of renowned multinational corporations and prioritising infrastructure and talent development, Bangladesh can reshape its IT landscape.

This strategic pivot would not only empower local talents to ascend the global hierarchy but also reinforce the IT sector's role as a cornerstone of the nation’s economic engine, building resilient, sustainable, and globally competitive market footholds.

On the journey towards global prominence, Bangladesh can draw inspiration from the successes encountered in its own RMG sector and the ascension of India’s IT industry, using these models as guiding beacons.

Bangladesh's proactive engagement in the global IT arena, combined with local skill development, envisions its IT sector as a global leader rather than merely a competitor.

The reward of this meticulous orchestration is a sustainable, vibrant IT industry that can proudly represent Bangladesh on the global stage, bringing prosperity and recognition to the nation.

[Mahmudur R Manna, a technology leader for Southeast Asia at a global technology company, with over 20 years of experience, specialises in driving innovation and growth in the technology sector.]