Sun, Jun 12, 2011 page11

• Bangladeshi teenagers behind growth of outsourcing sector

  • By Kamrul Hasan Khan / AFP, DHAKA
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  Like many teenagers, Abdullah al-Zahid spends most of his time holed up in his bedroom in his family’s modest Dhaka apartment glued to his computer.

  But, Zahid, 16, is not checking Facebook or chatting to friends — he’s working as a freelance Web developer, part of a new wave of young, tech-savvy Bangladeshis who are transforming their country’s nascent outsourcing sector.

  “There is so much demand for outsourcing, I am struggling to cope. I have to turn down many, many job offers,” said Zahid, who earns about US$1,000 a month from several outsourcing contracts and is his family’s main breadwinner.

  

  Bangladeshi computer programmer Abdullah al-Zahid works on his computer at his house in Dhaka on May 11.

  Photo: AFP

  “Many of my friends are interested in this work. I hope to set up my own office one day and hire other people like me to do more outsourcing,” said Zahid, who is still at school and wants to go on to university.

  The Bangladesh Association of Software and Information Services (BASIS) estimates there are about 15,000 freelancers like Zahid in Bangladesh doing outsourced work for technology companies from across the globe.

  The country also has about 500 registered IT outsourcing companies which collectively employ an additional 20,000 workers.

  Compared with neighboring India, which accounts for about 55 percent of the US$3.4 trillion global market and employs 2.54 million people directly in the sector, Bangladesh is an outsourcing minnow.

  OPPORTUNITY BECKONS

  However, as outsourcing costs rise in countries like India, China and the Philippines, impoverished Bangladesh, currently better known for cheap garment exports for top Western brands, may be able to cash in.

  “New companies are approaching with new orders now and that’s what we need to boost the industry as global IT spending is expected to rise over the next few years,” BASIS president Mahboob Zaman said.

  “We are just getting entry into the global industry, but we have real potential,” he said, adding that Bangladesh’s low cost labor pool was a key competitive advantage.

  The average wage of an outsourced IT sector employee is about US$8 per hour in Bangladesh compared with US$20 per hour in India and US$10 to US$15 an hour in the Philippines.

  Moreover, Bangladesh has one of the largest and youngest populations in Asia, with 150 million people of whom 65 percent are under the age of 25, Zaman said.

  In December, leading technology research company Gartner ranked Bangladesh for the first time in its annual list as one of its top 30 countries for IT services outsourcing last year thanks to its low costs and huge labor pool.

  Bangladesh began developing an outsourcing sector in 2004 and it is now worth about US$120 million. The country exported about US$36 million worth of IT services last year, according to BASIS figures.

  The government has declared that developing the IT outsourcing industry is to be a key priority, which fits with their ongoing campaign to create a “Digital Bangladesh” by 2020.

  However, there are major challenges which must be addressed before the industry can flourish: Gartner gave Bangladesh a “poor” rating in three vital areas — infrastructure, language skills and data, and intellectual property security.

  Poor infrastructure, including frequent power crises and slow and unreliable Internet connections are the most immediate problems for Ahmadul Hoq, president of the Bangladesh Association of Call Center and Outsourcing (BACCO).

  “We have told the government that we need an uninterrupted power supply and a second connection with high bandwidth,” Hoq said, adding that progress on these issues was slow.

  POWER PROBLEMS

  Bangladesh’s businesses have long suffered from an acute power crisis, as plants generate only about 5,000 megawatts of electricity a day, but demand is over 6,000 megawatts and growing at a rate of 500 megawatts a year.

  The country has only one submarine Internet cable and desperately needs a second line to prevent frequent disruptions, Hoq said.

  NEED FOR SPEED

  “We are connected to submarine cable network SEA-ME-WE-4, which provides an Internet bandwidth of 24 gigabytes, but more speed is needed and an alternative connection is essential to woo overseas clients,” Hoq said.

  The government should also set up IT software parks in the capital Dhaka and at universities across the country to attract more graduates to the sector and ensure the right skills training is available, Hoq said.

  For Zaman, Bangladesh should aim for its outsourcing service industry to export US$500 million worth of services by 2014, a goal he said was within reach.

  “Two decades ago, many people could not imagine Bangladesh’s garment industry would become the country’s highest export earner — but it did. I believe the outsourcing industry has the same potential,” Zaman said.

  Bangladesh’s garment industry accounts for 80 percent of the country’s US$16 billion of export earnings and employs over 3 million workers, mostly women.

  The country’s biggest advantage in terms of outsourcing, Zaman said, is its people — -particularly the younger tech-savvy generation who are already helping the sector to take off without any government support.

  “Young men like Zahid adapt to new technologies quickly and it is going to be them who will drive the outsourcing industry forward,” he said.
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