Rise and growth of freelancing in economy of Bangladesh
Bangladesh has already become the second-largest supplier of online labour, according to the Oxford Internet Institute (OII)
ISHRAT JERIN OAISHORJO & SUMAIYA BINTE AFSSAR
With the advent of rapid digitalization, many developing countries like Bangladesh are focusing on the digital economy: a global market for digital outsourcing. The digitalization of a countrys economy not only drives innovation in its service industry, it also fuels domestic job opportunities, enabling faster economic growth. In the quest to lower costs and risks, many large corporations in developed nations like the US, UK and Australia are turning to IT outsourcing from countries including Bangladesh, leading to a recent boom in freelancing.
Freelancing jobs include everything from computer programming to web design, tax preparation, and search engine optimization. This has generated a wide range of new opportunities for people in emerging markets that did not previously exist. Asia has become the number-one region for providing outsourcing services to the rest of the world.
In the last few years BPO (Businesses process outsourcing) sector has gone through massive expansion and it has achieved 24 percent year growth year after year and it shows signs of more expansion.
When the sector was first introduced back in 2008 it only made $4 million in revenues and companies had to take license from the telecom regulator but they closed their operations very quickly but as days have gone past by the telecom regulations have bought in significant changes to their rules and thus the earnings rose by 17 times since. The rapid digitalization of Bangladesh - including easy internet access in urban areas and government and non-government initiatives to promote freelancing - has contributed to the recent growth of this way of working.
As a result, Bangladesh has already become the second-largest supplier of online labour, according to the Oxford Internet Institute (OII). About 500,000 active freelancers are working regularly, out of 650,000 registered freelancers in the country; between them they are generating $100 million annually, according to the ICT Division of Bangladesh.
India is the largest supplier of online labour, with close to 24% of total global freelance workers, followed by Bangladesh (16%) and the US (12%). Different countries focus on different sectors of freelancing services. For instance, technology and software development is dominated by Indian freelancers, while Bangladesh is the top supplier of sales and marketing support services.
Bangladesh government plans to create 200,000 thousand jobs through the BPO sector by 2021 which now employs 40,000 people. One of the core reasons why BPO sector is going to rise in Bangladesh is production cost economics. Factors like populations, labour cost, IT skills and English are the main competences of Bangladesh for being a new hub for BPO operators. Labour cost is around $8 per hour than other BPO countries like Philippines ($20) and India ($15).
Dutytaker, Genex Infosys LTD, ASL BPO, ServicEngineBPO, Digicon Technologies LTD, Fifotech, Quintos Business Solutions, Aamra Outsourcing, Syntech Solutions LTD, BCS, MyOutsourcing LTD are few of the well-known BPO operators of Bangladesh (Duty Taker, 2019). Renowned global brands like Coca-Cola and Samsung also take services from Bangladeshi BPOs and mobile operators call center operations, consumers goods industry and hospitals take services from the local BPO industry and currently local BPOs are on the verge of serving the Banks as well (Daily Star, 2017).
180 million dollar worth of market share is currently owned by Bangladesh and if Bangladesh can utilize this great opportunity this sector can become the second biggest to earn foreign currency. Bangladesh has another great plus point which is its population. There are more than 110 million people who are youth and they can play a vital role for the rise of this industry. Currently Bangladesh is the 44th largest market based economy and Bangladesh is the second fastest growing economy in the world. The country is constantly growing and this has grabbed the attention of the developed countries who now plan to outsource their IT and ITES products they hire thousands of freelancer through different platform like Upwork, Freelancers, Fiverr and Belancer. Bangladesh plans to reach $5 billion outsourcing revenue by 2021.
In last year 2019 Bangladesh earned revenue of one billion dollar from outsourcing. It is to mention that to motivate the entrepreneurs Bangladesh govt. removed tax from BPO agencies up to 2024 and ICT ministry has started to provide 10% incentive to the agencies who are bringing money through legal channel. But most of the time these money is not coming through legal channel such as Bank since PayPal is not used in Bangladesh for which we are not getting the exact remittance! If we can control this flow of money through channel our rate of earnings would boom at a great volume!
It is a very well-known fact that there is a lack of job opportunity in Bangladesh but due to the BPO sector alone it is now providing jobs to 45,000 people, which at the start had only 900 people working in the whole sector, this shows the promise this sector holds.
The reason behind the rise of this sector is also because of the governments rules and regulation. Current incentives the government is offering are given below:
Till 2024 there will be 100% tax exemption
For foreign employees 50% tax reduction for the first three years
For rental and utilities 80% vat exemption
Up to 10% cash back on total export revenue
No restriction on foreign equity holding
With such lucrative incentives offered by the government this is why companies are now more inclined to come here and build up their companies. Bangladeshi freelancers currently have a lot of US and UK clients and it is the second largest freelancing talent supplier in the world.
Bangladesh is one of the few countries in Asia that has a huge youth population. Of its 163 million people, almost 65% are under the age of 25. This vast, young and strong human resource, however, is still lacking in the knowledge necessary to thrive in the competitive global market.
Although freelancing as a career has gained in popularity over the last few years, thousands of Bangladeshs young people are in need of proper training and government support to help them take advantage of this opportunity.
Outsourcing in Bangladesh has grown due to the uprising of our IT sector and IT development. With the help of the government it is now booming. Government sees this sector as another RMG sector which can produce a lot of foreign remittance. Outsourcing has impacted the Bangladesh economy a great mile and it will continue to do good to this economy as long as everything works systematically.
The writers are contributors.
