Bangladesh is undergoing a remarkable economic transformation, evolving from a global garment manufacturing powerhouse to an emerging software development hub.
This strategic pivot reflects the country’s ambition to secure a prominent position in the global digital economy.
As Bangladesh continues to build its reputation in software development, it’s poised to become a key player in the global digital landscape while maintaining its strong position in garment manufacturing.
Before we dive further deep into a discussion about the endless possibilities for the current Bangladesh software industry, let’s start with a brief look into the past.
The Garment Legacy
For decades, Bangladesh has been a titan in the global apparel industry:
- Second-largest garment producer worldwide, after China
- Known for cost-effective labor and efficient production
- Major exporter of apparel, especially T-shirts
- Cornerstone of the country’s export economy and employment
However, the narrative is changing as Bangladesh sets its sights on new horizons.
Embracing the Digital Future
In recent years, Bangladesh has recognized the immense potential of the information technology (IT) sector. This shift toward becoming a vibrant software development center is driven by:
- Changing dynamics of the global economy
- Lucrative opportunities in the technology sector
- Need for economic diversification
The country is leveraging its large, young workforce and improving digital infrastructure to fuel this transition. By nurturing its IT sector, Bangladesh aims to:
- Create high-skilled job opportunities
- Attract foreign investment in technology
- Boost its digital exports
From Fabric to Code: A New Era
This transition from garments to software symbolizes Bangladesh’s evolving aspirations and capabilities. The country is investing in:
- IT education and training programs
- Technology parks and innovation hubs
- Favorable policies for tech startups and IT companies
By embracing this dual focus on traditional strengths and emerging technologies, Bangladesh is crafting a diverse and resilient economic future, ready to meet the challenges and opportunities of the 21st century.
5 Key Factors Propelling The Industry Transformation In Bangladesh
Improved Support From The Government
The Bangladesh government is spearheading IT sector development through strategic policies and programs. Key initiatives include:
- Tech park establishment
- Incentives for IT companies
- Investments in IT education
- Digital infrastructure upgrades
These efforts aim to accelerate Bangladesh’s digital transformation and position the country as a rising tech hub in South Asia.
An Ever-Growing Talent Pool
Bangladesh is revolutionizing its tech landscape through strategic education and skill development initiatives. The country is rapidly building a world-class IT workforce to meet global industry demands.
Recent data from GitHub’s Innovation Graph project reveals Bangladesh’s extraordinary progress:
- Highest year-over-year increase in developer accounts globally
- 66.5% growth between Q3 2022 and Q3 2023
- Outpacing tech hotspots like Nigeria, Pakistan, Singapore, and India
- 20,000+ annual ICT graduates
- 66.5% surge in GitHub developer accounts (2022-2023)
- Leading global software development growth
This unprecedented growth positions Bangladesh as an emerging powerhouse in the global software development arena.
Competitive Edge In Terms Of Quality
Bangladesh’s IT sector is emerging as a global outsourcing powerhouse, mirroring the success of its renowned garment industry. The country offers:
- Cost-effective software development services
- High-quality IT solutions Companies in Healthcare, fashion, engineering, and so on.
- Significant savings for international clients
This unique combination of affordability and quality positions Bangladesh as an attractive destination for companies seeking to outsource their IT needs without compromising on results.
Constant Innovation Through Entrepreneurship
Bangladesh’s burgeoning tech scene fosters a new generation of entrepreneurs and innovative companies. This growth is fueled by:
- Robust government initiatives
- Increasing private investments
- Supportive startup ecosystem
The result is a surge of cutting-edge tech solutions and promising startups, positioning Bangladesh as an emerging innovation hub in South Asia.
Inspiration From Global Digital Transformation
Bangladesh is rapidly evolving to meet the world’s growing digital needs:
- Leveraging the expanding tech talent pool
- Offering cost-effective IT solutions
- Moving up the global value chain
Impact on Bangladesh’s Economy:
- Potential GDP boost
- Increased export revenues
- New high-skilled job opportunities
While the garment industry remains crucial, Bangladesh’s IT sector growth marks a new economic era. This shift promises to transform the country into a key player in the global digital economy.
How Bangladesh Is A Land of Possibilities For SaaS
Bangladesh is rapidly becoming a key player in the global IT industry, particularly in software outsourcing. Recent data highlights the country’s impressive growth:
- 21st globally in IT outsourcing rankings
- 2nd largest producer of IT freelancers worldwide
- Software exports reached $60 million in 2021-22, up from $51 million in 2020-21
Export Destinations
- United States: 34% of domestic software exports
- United Kingdom: 13%
- European Countries: 4-5%
The Bangladesh Association of Software and Information Services (BASIS) reports these figures, emphasizing the country’s expanding global reach in the IT sector.
Top 10 IT Exporters in Bangladesh (2018-2022)
These companies led Bangladesh’s IT export growth, collectively exporting around $170 million from 2018 to 2022:
- Secure Link Services (SELISE)
- Taskeater
- Cefalo Bangladesh
- Kaz Software
- Golden Harvest Infotech
- ServicEngine
- BJIT
- Graphic People
- Therap (BD)
- Brain Station 23
In fiscal year 2022 alone, these top performers contributed $35.54 million to Bangladesh’s IT exports.
Bangladesh’s IT industry is showing strong potential for further growth. As the country continues to invest in tech education and infrastructure, it’s positioning itself as an increasingly attractive destination for global software outsourcing.
Factors Contributing To Growth In Bangladesh SaaS Industry
1. Government Initiatives Driving IT Growth
The Bangladesh government is spearheading IT sector development through strategic policies and programs. Key initiatives include:
- Establishment of technology parks
- Attractive incentives for IT companies
- Substantial investments in IT education
- Digital infrastructure upgrades
These efforts aim to accelerate Bangladesh’s digital transformation and position the country as a rising tech hub in South Asia.
2. Surge in IT Education and Software Development
Bangladesh is revolutionizing its tech landscape through education and skill development:
- Over 20,000 annual ICT graduates
- 66.5% surge in GitHub developer accounts (2022-2023)
- Highest year-over-year increase in developer accounts globally
- Outpacing tech hotspots like Nigeria, Pakistan, Singapore, and India
This unprecedented growth positions Bangladesh as an emerging powerhouse in the global software development arena.
3. Cost-Effective IT Outsourcing Destination
Bangladesh’s IT sector offers a unique combination of affordability and quality:
- Competitive pricing for software development services
- High-quality IT solutions
- Significant cost savings compared to developed markets
This value proposition makes Bangladesh an attractive destination for companies seeking to outsource their IT needs without compromising on results.
4. Thriving Startup Ecosystem and Innovation
Bangladesh’s burgeoning tech scene is fostering a new generation of entrepreneurs and innovative companies:
- Dynamic startup culture
- Government and private sector support
- Emerging cutting-edge tech solutions
The result is a surge of promising startups, positioning Bangladesh as an emerging innovation hub in South Asia.
5. Economic Impact of IT Sector Growth
As Bangladesh moves up the global value chain into knowledge-intensive sectors, the IT industry is set to transform the economy:
- Potential for significant GDP boost
- Increased export revenues
- Creation of high-skilled job opportunities
While the garment industry remains crucial, the IT sector’s growth marks a new economic era for Bangladesh.
6. IT Export Performance and Key Players
Bangladesh’s IT export sector is showing promising growth:
- Software exports reached $60 million in 2021-22, up from $51 million in 2020-21
- Ranks 21st globally in IT outsourcing
- 2nd largest producer of IT freelancers worldwide
Top export destinations:
- United States: 34% of domestic software exports
- United Kingdom: 13%
- European countries: 4-5%
Leading IT exporters (2018-2022):
- Total exports: $170 million
- FY22 exports: $35.54 million
Top companies include Secure Link Services (SELISE), Taskeater, Cefalo Bangladesh, and Kaz Software, among others.
Challenges For The Bangladesh SaaS Industry
1. The Cost of Failure: A Major Hurdle to Innovation
Digital transformation poses significant risks, especially for small and medium-sized enterprises (SMEs):
- High upfront costs of digital initiatives
- Potential for financially devastating failures
- Strong risk aversion in many organizations
These factors often hinder progress and innovation in Bangladesh’s tech sector.
2. Bangladesh’s Software Trade Imbalance
According to the Bangladesh Association of Software and Information Services (BASIS):
- Annual software service imports: $1.5 billion to $2 billion
- Annual software service exports: $60 million
Key takeaway: Bangladesh’s software industry faces a substantial trade deficit.
3. Impact on Local SaaS Development
The reliance on imported software has created challenges for the domestic market:
- Hindered growth of local Software as a Service (SaaS) providers
- Forced local SaaS companies to focus on export markets for revenue
This trend potentially slows the development of Bangladesh-specific software solutions.
4. Discrepancies in Export Earnings Reports
BASIS reports higher IT service export earnings than official government figures:
- Reason: Official data excludes earnings from freelancers and service providers using unofficial channels
- Implication: The actual contribution of IT exports to Bangladesh’s economy may be underestimated
5. Opportunities for Growth in Bangladesh’s Software Industry
Despite challenges, there’s potential for significant growth:
- Reducing reliance on imported software
- Encouraging local SaaS development for the domestic market
- Supporting SMEs in digital transformation efforts
- Improving channels for reporting export earnings
By addressing these areas, Bangladesh can boost its software industry and reduce its trade deficit in IT services.
Other Popular Categories of Software Development In Bangladesh
1. Mobile App Development
Modern smartphones are revolutionizing how we connect, communicate, and manage our lives. With advanced social media apps, enhanced connectivity features, and integrated software, these devices now support our:
- Social Interactions
- Daily Communications
- Entertainment Needs
- Financial management
In Bangladesh’s competitive marketing landscape, businesses are leveraging cutting-edge strategies to gain a competitive edge. A key tactic?
Developing mobile applications with user-friendly UX design. This approach offers dual benefits:
- Retaining existing customers
- Attracting new clientele
Mobile app development has become a crucial strategy for thriving businesses in Bangladesh. Here’s why:
- Customer-Centric Solutions: Apps cater to both customer needs and business objectives.
- Expanded Reach: Effective marketing tool for reaching a wider audience.
- Streamlined Purchases: Integration with secure payment gateways like Bkash and Nagad simplifies transactions.
- User-Friendly Design: Intuitive interfaces enhance the overall user experience.
- Customer Satisfaction: Easy-to-use apps ensure a pleasant consumer journey.
Key Benefits of Mobile Apps for Bangladeshi Businesses:
- Increased customer engagement
- Improved brand visibility
- Enhanced customer loyalty
- Simplified payment processes
- Real-time customer support
By investing in mobile app development, Bangladeshi companies can boost sales, improve customer satisfaction, and stay competitive in the digital marketplace.
2. Web Development
Bangladesh’s web development sector is spearheading the nation’s digital transformation. Key players in this revolution include:
- Professional web development companies
- Skilled freelance developers
- Registered ICT firms offering web services
Industry Insights:
According to BASIS (Bangladesh Association of Software and Information Services), approximately 50% of registered ICT companies in Bangladesh provide web-related services.
These services primarily include web design and development.
Factors Fueling Growth:
- Increasing business demand for online presence
- Growing internet-savvy population in Bangladesh
- Rising technological dependency among Bangladeshis
Web Development Services in High Demand:
- Responsive Website Design
- E-commerce Platform Development
- Content Management Systems (CMS)
- Web Application Development
- SEO Optimization
For Bangladeshi businesses, selecting the ideal software development company is crucial for creating a standout online presence. Here’s why it matters:
Key Website Features for Success:
- Mobile-friendly design
- Functional user interface
- Visually attractive layout
- Traffic-generating capabilities
Digital Presence Impact:
- 60% of internet users learn about businesses online
- Web presence is now a critical component for Bangladeshi companies
Here’s how a well-designed website can benefit Bangladeshi businesses:
- Increased brand visibility
- Higher customer engagement
- Improved conversion rates
- Enhanced credibility
As more Bangladeshi businesses recognize the importance of a strong online presence, the web development sector continues to expand, contributing significantly to the country’s digital economy.
By partnering with the right web development company, Bangladeshi businesses can create compelling digital experiences that attract and retain customers in today’s online-driven marketplace.
International Collaborations & Expansions of The Current Bangladesh Software Industry
As global tech giants shift their focus from India to other Asian countries for IT services, Bangladesh is emerging as a promising destination in the software-as-a-service (SaaS) industry.
This shift opens a window of opportunity for the country to capitalize on the growing demand for innovative software solutions.
Currently, over 30 international companies are leveraging Bangladesh’s software services, with exports expanding to countries like Egypt and Vietnam.
- Key players such as
- DataSoft
- Dohatec
- eGeneration
- REVE Systems
- TigerIT
- Southtech
have established a global presence, with offices spanning different regions including
- Nepal
- Bhutan
- Malaysia
- India
- Japan
- The UK
- The US
- Various African countries
The growth of Bangladesh’s software industry is driven by increasing domestic usage, diverse product offerings, and symbiotic relationships between local and foreign companies.
Bangladeshi firms have consistently demonstrated their ability to handle complex international projects, bolstering their reputation in the global market.
Export Ambitions and Shifting Trends
Bangladesh has set an ambitious target of exporting USD 5 billion worth of software products and services by 2025.
This goal is supported by a notable shift in the domestic market, where reliance on imported software is gradually declining.
Currently, 25 local companies are developing integrated business applications and enterprise resource planning (ERP) software, products that were previously imported.
The rise of SaaS in Bangladesh has created new opportunities for businesses:
- Increased automation of existing processes
- Low-risk experimentation for enterprises
- Seamless operational expansion
- Accelerated organizational transformation
Local companies are already offering a range of SaaS solutions, including supply chain automation, project management software, cloud-based ERP for SMEs, and web development services.
This increasing presence of SaaS solutions in local companies is a strong indicator of Bangladesh’s growing promise in the global software industry.
Collaborative Efforts and Future Outlook
To fully capitalize on these opportunities, stakeholders including the government, industries, and academia are forming coalitions to promote IT and IT training initiatives. These efforts aim to boost software exports and enhance the industry’s growth trajectory.
The widespread adoption of SaaS solutions is not only driving the expansion of Bangladesh’s software companies but also laying the foundation for achieving the Smart Bangladesh Vision by 2041.
As local firms continue to innovate and expand their operations, Bangladesh is poised to become a significant player in the global IT services market.
To Wrap It All Up
Software development is crucial for Bangladesh’s economic and technological advancement. It has the potential to transform key sectors like education, healthcare, and security, improving citizens’ lives.
While the government is investing in digital infrastructure, challenges remain in fully leveraging software development to address critical needs.
Global tech leaders like Sweden, Germany, Japan, and the US demonstrate the power of embracing technology for innovation and growth.
Bangladesh aims to follow suit, using software development as a catalyst for progress towards becoming a developed nation.
FAQ
Bangladesh’s software industry is rapidly growing, with an estimated market size of $1.3 billion in 2023 and an annual growth rate of 40%.
Key sectors include fintech, e-commerce, healthcare, education, and government services, with increasing demand for mobile apps and cloud-based solutions.
Bangladesh produces approximately 65,000 IT graduates yearly, contributing to a growing pool of skilled software developers.
The government’s “Digital Bangladesh” vision, tax incentives for IT companies, and investments in tech parks are major initiatives supporting the industry’s growth.
Challenges include skill gaps, infrastructure limitations, and competition from established global tech hubs.
While growing rapidly, Bangladesh’s software industry is still smaller than India’s but competitive with other South Asian countries in terms of growth and potential.
Bangladesh excels in web development, mobile app development, AI and machine learning solutions, and business process outsourcing (BPO) services.
Yes, startups like Chaldal, ShopUp, and bKash have gained international attention and investments, showcasing the potential of Bangladesh’s tech ecosystem.
AI is driving innovation in various sectors, with Bangladeshi companies developing AI-powered solutions for agriculture, healthcare, and finance.
Freelancers contribute significantly, with Bangladesh ranking second globally for online work growth, particularly in web and mobile development.
Bangladesh is leveraging its large, young workforce, competitive pricing, and improving infrastructure to attract international clients for software outsourcing.
Emerging areas include blockchain, IoT, cybersecurity, and advanced data analytics, with continued growth in mobile and web applications.
Universities are updating curricula to include emerging technologies while coding boot camps and online learning platforms are supplementing traditional education.
Partnerships with global tech giants like Google, Microsoft, and IBM are providing training, resources, and exposure to Bangladeshi developers.
The industry is driving export earnings, creating high-paying jobs, and attracting foreign investment, contributing to overall economic development.
The government is investing in 5G rollout, expanding fiber-optic networks, and increasing internet bandwidth to support the growing tech industry.
Initiatives like “Women in Tech” programs, coding workshops for girls, and targeted scholarships are working to increase female participation in the sector.
Foreign investors can capitalize on the growing market, skilled workforce, and government incentives by investing in local startups or establishing development centers.
The industry is embracing remote work, with companies investing in digital collaboration tools and cloud infrastructure to support distributed teams.
Open-source contributions are growing, with Bangladeshi developers actively participating in global projects and fostering a culture of knowledge sharing and innovation.
