A growing global market of information technology–nabled services, including business process outsourcing, offers opportunities worth billions of dollars for Bangladesh if it can build service capacity and catch up with competitors, says the Asian Development Bank. The global market for such sophisticated services is estimated at $1,000 billion in 2007 with an annual growth rate of 30 per cent as the companies in the developed countries are looking for partners in developing countries for cutting costs.

The bank, in a special segment of the latest economic update report, mentions that although Asia has been a major destination for business process outsourcing with India, the Philippines and China being the large players, Bangladesh with a few vendors has essentially missed out on this profitable business opportunity. Currently, it points out, the market for software, IT-enabled and some basic business process outsourcing services stands at about $170 million for Bangladesh.

‘The country can initially build on this base and improve capacity to move to high value-added activities,’ the lending agency report notes. The most common examples of such services are call centres, human resources, accounting and payroll services. The bank’s country director, Hua Du, while releasing the report on May 15, painted rosy picture for Bangladesh in the global market. The report said Bangladesh lagged behind the major exporters of such services because of limited capacity of firms, unskilled human resources and poor infrastructure. Availability of a low-cost workforce with the ability to perform basic functions is said to be a fair comparative advantage for Bangladesh.

‘The country can transform into a good destination for BPO if it can follow the examples of India or the Philippines and make some policy shifts to develop a solid ICT platform and a sound education system,’ it added. Indian exports of such services, growing at about 59 per cent rate, are expected to reach between $21 billion and $24 billion by 2008 and employ around 1.1 million people. Some Bangladeshi vendors have entered the IT-enabled services export market that involve back-office functions consisting primarily of data entry, data transfer, data conversion, billing, software development and other services. ‘Bangladeshi vendors need to establish a strong international reputation and brand equity,’ the report said.

The ADB report further explained that start-up capital expenditures are low in the business which makes it a promising niche for small and medium-sized entrepreneurs. The business has offered opportunities for many people in Asian region to find employment and improve standards of living, it said adding, ‘Bangladesh too should explore this promising market to create jobs, stimulate growth and accelerate the pace of poverty reduction.’