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IT: an indispensable factor in the economic growth

by Business Growth
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According to ND Century Code, “Information Technology (IT) means the use of hardware, software, services, and supporting infrastructure to manage and deliver information using voice, data, and video.”

IT has become an integral part of modern economies, playing a critical role in transforming various sectors and contributing to economic growth and development. Its impact on the digital economy shapes how people work, communicate, and conduct business. As technology continues to evolve and disrupt traditional industries, understanding its effects on the economy is crucial for policymakers, investors, and individuals seeking to harness its potential for growth and development.

A particularly significant impact of IT on Bangladesh’s economy has been the evolution of the outsourcing industry. Bangladesh has emerged as a popular outsourcing destination, particularly for software development, data entry, and customer services. This has been due to the nation’s abundant supply of skilled labour and lower labour costs. The outsourcing industry has been instrumental in creating new job opportunities, particularly for the country’s youth, and has substantially contributed to Bangladesh’s export earnings.

Over the past ten years, Bangladesh’s software industry has experienced remarkable growth, according to data from the Bangladesh Association of Software and Information Services (BASIS). The industry’s export earnings have risen from $130 million in 2010 to $800 million in 2020, representing a growth rate of over 500 percent. The software industry is now one of the fastest-growing sectors in the country, and its influence on Bangladesh’s export earnings has been steadily increasing, and this growth rate demonstrates the industry’s potential for further expansion. In 2020, this sector accounted for around 2 per cent of the country’s total export earnings, a considerable increase from 0.3 per cent in 2010. This shows the substantial contribution of the software industry to the nation’s economy and its potential to become a powerful player in the global software market. In 2021, the software industry’s export earnings increased to $1.1 billion, representing a growth rate of around 37.5 per cent. The industry’s growth expects to continue in 2022 and 2023 due to various factors, including the rising demand for digital transformation services worldwide, development of e-commerce, and increasing adoption of IT across multiple sectors.

E-commerce based business is a new opportunity in Bangladesh. The use of e-commerce has seriously influenced the country’s economy, enabling businesses to reach a broader customer base and reducing transaction costs. The growth of e-commerce has led to the emergence of new companies and allowed small and medium-sized enterprises (SMEs) to access new markets. The increased use of online payment systems has also reduced the reliance on cash transactions, promoting financial inclusion and transparency in the economy. IT has enabled the development of various payment systems, including mobile banking, digital wallets, and payment gateways, making transactions faster, more secure, and more convenient, thereby promoting e-commerce and driving economic growth.

The adoption of IT has played a crucial role in reforming the Bangladesh finance sector, contributing to better customer services, enhanced efficiency, and economic growth. Technologies in the finance sector have implemented various initiatives to promote digital renovation in the industry. The widespread use of IT has enabled financial institutions to provide digital banking services, such as online banking, mobile banking, and ATM services, making banking more convenient and accessible to customers in remote areas. Financial institutions in Bangladesh use technology to monitor and manage risk more effectively, which includes detecting and preventing fraud and analyzing credit risk. This has enhanced the stability and security of the financial sector and enabled financial institutions to offer better customer services.

The integration of IT has changed the education sector in Bangladesh. E-learning has made education more accessible and affordable, enabling students to access education more efficiently. The COVID-19 pandemic has forced schools and universities to shift to online learning, making IT even more crucial. Online classes using video conferencing tools and learning platforms have allowed students to continue their studies from home, ensuring the continuity of education. Digital resources such as e-books and online assessments have reduced the need for physical textbooks and enabled students to access course materials anytime and anywhere. Training for teachers on digital tools and platforms has improved the quality of teaching and made the learning process more interactive and engaging. IT has played a vital role in ensuring that the education sector in Bangladesh continues despite the challenges posed by the pandemic. Adopting online learning platforms, digital assessments, educational apps, and teacher training has facilitated the continuity of education and helped mitigate the pandemic’s impact on student’s academic progress.

Although IT adoption has significant benefits in diverse sectors in Bangladesh, some challenges are still needed to be addressed. One of these challenges is the need for sufficient infrastructure, particularly in rural areas, which has limited the potential advantages of IT. Another challenge is the low level of digital literacy among the population, which has also hindered the growth of the digital economy in Bangladesh. To overcome these challenges, the government has taken various measures to support the growth of the software industry, including offering tax incentives, creating technology parks, and investing in developing the country’s digital infrastructure. These initiatives aim to attract more investments in the sector and create new growth opportunities.

In conclusion, adopting IT has brought about meaningful changes in Bangladesh’s economy, contributing to its growth and development. IT enhances the government’s global market and creates new employment opportunities. However, challenges such as inadequate infrastructure and low digital literacy among the population need to be addressed to leverage the potential of information technology fully.

 

Muhammad Tanveer Islam is Research Associate, Bangladesh Institute of Governance and Management (BIGM).
[email protected]

 

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