In 1980, Bangladesh first started using computer on commercial basis. Since then we have come a long way. A brief summary of the IT industry in Bangladesh can be seen in the attachment (Attachment-1). Recently, the local IT industry has experienced a phenomenon growth and this steep growth has taken place over the last 3-4 years. The country is producing an increasing number of IT professionals every year. Total number of computer users has been increasing day by day.

The local IT service sector has several components like software development, data entry and data processing, e-commerce, web and multimedia development, IT consulting and solutions, human resources development, etc.

The government has declared IT as a "Thrust sector" and has already taken some positive steps towards implementing its promises. The national IT policy of Bangladesh has been drafted and it is under active consideration of the government and the draft IT policy can be seen in the attachment (Attachment-2).

There has been significant development in the IT sector during the last one year that expects to bring competitiveness as well to accelerate growth in the export market. These are namley:

• Intellectual Property Rights (IPR) law is passed in the parliament
• De-regulation of the VSAT set-up in the private sector at reasonable price
• National IT policy is under active consideration of the government

Salient features of the existing IT industry of Bangladesh are explained below:

a. Manpower Strength

Although not adequate in terms of quality and number, the present manpower strength of Bangladesh is at the acceptable level to enter into the global IT market to provide various IT based services. As of now, we have manpower although not adequate in terms of quality and number. Scenario of IT resources distribution in Bangladesh has been depicted in the attachment (Attachment-3) on the basis of a recent survey of 1836 local IT organizations. The activities are found to spread over varied dimensions, such as office automation, desktop publishing, hardware and software development and marketing, human resource development, etc.

There are aggressive initiatives to develop and increase the number of skilled manpower. Universities are increasingly giving emphasis on computer science education and the government has introduced policy to include computer education curriculum in all levels. The government has placed special fund for rapid manpower development. Besides, over the last 4-5 years there has been a steep growth in setting up private training centers and institutes in collaboration with foreign (USA, UK, Singapore, India, etc.) reputed IT Education Institutes in order to make a vibrant growth in the IT sector. The country has a large number of young educated people who are enthusiastic in building career in the IT field. The table attached will provide an idea on the present number of IT education centers as well as capacity of the universities (Attachment-4).

b. Telecommunication Facilities

Earlier the country had acute problem of telecommunication facilities. Recently, the government has taken a few significant initiatives and steps to remove these problems. There has been significant improvement in value addition services within last 3-4 years. Now the situation is much better to start with a more ambitious plan.

Within a short period of time, Bangladesh will have fibre optic cable, deregulation process for VSAT set-up that has brought down the cost at a lower amount than earlier. Individual private IT firm engaged in software export and ISP can have their own VSAT at a reasonable cost (annual licence fee is US 3,500). Initiatives are there to increase the number of telephone lines at a cheaper cost. Present status and strength of Telecommunication sector is shown in the attachment. (Attachment-5). Besides these, the government has plan for further extension in the number of telephones in future. Apart from the government organization BTTB, there are 3 private operators now offering services as the Government has permitted private operators for domestic telephone services. Mobile phone sector has also opened up and now there are 4 (four) mobile phone providers. BTTB has the following facilities in data communication right now:

Packet Switch Data Network (PSDN) Services: 3 types of connection are available like X.25 leased, X.28 leased, and X.28 Dial up. Connected with international gateway exchange with a backbone speed of 64 kbpsthrough VSNI, . Services are available at Dhaka, Chittagong, Khulna, Rajshahi, and Bogra, Sylhet and these are suitable for credit card, ATM, online payment through Internet. Total capacity is 200 subscribers and commissioned 80 lines so far.

Digital Data Network: The existing DDN has features like corporate networking, software export or data entry and the charges are expected to be cheaper than the cost of VSAT.

BTTB has the several future expansion plans like DDN to 64 districts and to increase the existing capacity of Internet to districts with internet back bone to 2 Mbps and increasing it to 8 Mbps by June 2001. They plan to bring all ISP's to a single platform accessing Internet bypassing PSD.

Internet Connectivity In Bangladesh: Internet in Bangladesh first started in 1993 with two e-mail service using UUCP dial up connections. There are now more than 25 private Internet Service Providers (ISPs) in the country. The state own BTTB also has their own ISP wing mostly catering towards government entities. Majority of these ISP firms operate in Dhaka City, there are also three ISP s based in Chittagong & Two in Sylhet. Most Operators have their own 64 kbps to 128 kbps satellite link to either Hong Kong or Singapore. Some ISP have upgraded to 128 kbps capacity. One of the pioneer ISPs claimed to have installed 2 Mbps, while another 6-7 ISPs have recently upgraded their capacity at 384 to 512 kbps. Some of these organizations have significant financial backing and International tie up. But still it will take a few more months to provide "state-of-the-art" service at low usage rate.

Railway Fiber Optic System: Bangladesh Railway (BR) has provision of optical fiber and copper conductor cable network covering 1,800 of 2,900 km of tracks. 360 main lines stations of BR offered the telecom network through microwave radio links with capability up to 3,600 audio channels.

c. Financial Assistance and Support

Investment and financial assistance have become the highest priority since the sector was declared as "Thrust Sector". Three nationalized commercial banks have created special funds and started financing approximately US $ 15,000 to a single IT entrepreneur without any collateral. Foreign venture capital funds are also injected in this sector. Cost of these funds has been kept at a minimum level to promote this sector.

d. Legal Aspects (IPR and Cyber Law)

The government has recently approved Intellectual Property Rights (IPR) law and the said law enacted in the Parliament. Also, the software copyright law and Cyber law are under active consideration of the government to promote electronic commerce. Data security and interoperability will be ensured through setting up encryption standards and international agreements on interoperability. National IT Policy is being introduced in Bangladesh.

e. Research and Development in IT

In Bangladesh, the strategy for research, training and development in the area of computer and information technology is not adequate compare to other sectors of the economy. However, the matter has drawn attention of the concerned authorities and the government. The Ministry of Science and Technology plans will formulate plans to set-up "Research and Development Cell" in the universities, colleges, polytechnic and Bangladesh Institute of Technology (BIT) through providing assistance and incentives to the young generation. BANSDOC will also put efforts to establish a nationwide data communication network. The National Council for Science and Technology (NCST) proposed to coordinate the research activities in the IT field.

f. Institutional Support

The government of Bangladesh has put emphasis on IT in its fifth Five-Year Plan. Matters like establishment of high capacity fiber- optic telecommunication back-none to develop multimedia infrastructure, building local Information and Infrastructure (LII) and National Information Infrastructure (NII) to the GII (Global Information Infrastructure) like Internet for making a common platform for scientists and technologists in home and abroad for collaborative works has been reiterated.

In Bangladesh, there are organizations specialized in the computer and information technology field. Bangladesh Computer Council (BCC), The Bangladesh Institute of Communication and Information Technology (BICIT) (proposed), Bangladesh Computer Samity, Bangladesh Association of Software and Information Services (BASIS).

BASIS was formed in 1997 to promote the interest of IT business houses focused on software development and related information technology services. The association has more than 52 members at present actively involved in IT business. BASIS took steps to reduce duty and VAT on computer hardware and software at zero level, tax holiday for data entry and software firms, etc. BASIS is also sending delegations to international IT fairs such as COMDEX, CeBIT, Bangalore IT, etc.

BCS, the national IT organization was formed in the year 1987, promoting local IT industry in various ways. BCS organizes Computer Show, seminars, workshop, etc.

Bangladesh Software Marketing and Promotions (BSMP) is a private organization registered with Bangladesh Small and Cottage Industries Corporation (BSCIC). It is an information center that collects data and maintains demo programs created by the local software developers.

Bangladesh Institute of Communication and Information Technology (BICIT) will be established to impart standard IT education, training, standardization and certification of IT related course curriculum and products. The aim of setting up the BICIT has been to produce high-class programmers and IT trainers and to steer other IT man- power development activities required by the nation also.

g. Fiscal Support

For wide -spread use of IT the present government has already exempted tax, VAT and duties from the import of software, computer hardware and other relevant goods, thereby reducing the price of these commodities within the capacity of the general users. This historical step taken by the government has made a tremendous boosting impact on the promotion and development of this sector.

h. IT Awareness and IT Culture

Awareness of IT in Bangladesh is rising day by day. Numerous computer clubs, computer festivals and programming contests are going on. Cyber Cafés are operating in the main city and people can browse at a very nominal cost. List of the existing Cyber cafe is attached (Attachment-6). Web design contests are also taking place. There are about 11-12 computer related magazines published every month from Bangladesh. Collaboration with other International magazines are also there. Computer magazines that are available now, among others:

1. PC Quest Bangladesh: pcqb@bol -online .com
2. Computer Jagat : comjagat @usa.net
3. Computer Tomorrow: anyadin @bangla.net
4. Computer Barta : compbarta @ bdmail.net
5. Computer Bichitra: cbchitra@bdonline.com
6. Computer Bishhaw : combissh@ citechco.net
7. Computer and Communication: candc@bangla.net
8. Computer Bhuban : cbeditor @ bdonline.com
9. Computer and Electronics
10. PC World Bangladesh: pcworld@bangla.net
11. Mashik software
12. Internet world : iworld@bdonline .com

There has been a recent surge in e-commerce activities in Bangladesh. There are regular e-commerce related seminars and symposiums in the country almost every month and all the major training centers are offering courses on e-commerce.

Bangladesh software companies have already started developing e-commerce sites, but because of the bandwidth limitation most of these sites are hosted from servers abroad. A few interesting e-commerce sites and other important sites developed in Bangladesh are:

1. www.bdjobs.com
2. www.jobsbd.com
3. www.munshiGi.com
4. www.MunshiGi.com
5. www.bdexport.com
6. www.banglabooks.com
7. www.bdyellowpages.com
8. www.daffodil-bd.com
9. www.netblitzinc.com
10. www.samity.com
11. www.multilink-bd.com
12. www.univdhaka.edu

At first, export of IT based services was made in 1988 by a company named "Machine Dialogue". The company was assigned a software development job by VOLVO company of Sweden. Thereafter in 1991, IBS-Primax received a job from a British company under ICI agreement. So far, the export performance of IT based services is not very significant. According to the statistics of EPB, the local IT firms exported services worth US$ 4.00 million and US$ 15.00 million in the year 1997-98 and 1998-99 respectively.

The present capacity of IT service export is not enough to handle a large volume of works from the export market. No authentic statistics on the number of IT professionals in the country is available. However, study is being conducted to assess the total number of IT professional in different sub-sectors. It is expected that the said study being conducted by the Bangladesh Computer Samity will identify the actual number of IT professionals at different stages.

Service export capacity is a combination of several factors. While assessing the service capacity, we found that more than 100 IT enterprises are there, although the number of IT members with Bangladesh Association of Software and Information Services is more than 66. All these IT enterprises are striving hard to develop service capacity and to provide services to both local and foreign markets. It is found that all these enterprises are capable to provide various IT services for export market in a limited way.

Service mix of the local IT firms include software development, data entry and processing (GIs, CAD, Medical transcription), multimedia development, web page design and hosting, internet service, IT consulting, computer hardware sales and maintenance, training and human resources, and e-commerce. Like BASIS, BCS has more than 170 members representing various sectors of IT including hardware.

From the analysis, it is found that among the member IT enterprises, 33 enterprises are capable of developing software for both local and export market; 31 enterprises are providing IT consultancy services to the local market; 19 enterprises are engaged in training and human resources development, whereas 16 enterprises are engaged in data entry and data processing for both local and export market; 11 enterprises are engaged in software and hardware sales and maintenance; 8 Internet Services Providers are also members of the association, although the total number of ISP exceeds 30 (thirty) as of now; 7 enterprises develop web site and multimedia for both local and export market. A very few listed IT firms have wide variety of services i.e. 6-7 different services that ranges from data entry to ISP and E-commerce. Detailed list of the IT enterprises and their service mix is attached (Attachment-7).

Although Internet service has put positive impact on the overall economy, but there is no significant impact on the competitiveness of IT sub sectors since Bangladesh is still to attain a level playing field in the context of global market competition. Main reasons are as follows:

• Slow internet connectivity on an average ,
• Comparatively high service charge of Internet,
• Lack of adequate number of telephone lines,
• Absence of CYBER Law to reduce hacking, etc.
• Financial transactions of export oriented business through internet is not yet adopted

Due to lack of easy Internet connectivity, data transmission was very expensive. Again, offshore data entry services could not be provided to the export market due to slow down loading and lack of quick delivery of data. Earlier VSAT was very expensive to install for individual company. Present Internet service is not enough to have video conferencing.

Electronic market place does not exist in the country due to lack of similar system in the related government and non-government organizations although the number of ISP has been going up every month. Internet based marketing is still to adopted.

However, there has been a growing tendency within the business community to adopt e-commerce to enhance their business across the border.

Emergence of introduction of effective banking regulation and policy to boost up e-commerce is being talked about all around. Some banks have already showed their interest to adopt Internet supported transaction once the central bank develops a concrete policy guideline for the country.

Other impacts of Internet service are as follows:

• Cost of internet usage has come down
• People are becoming more aware
• Web site development cost has increased due to competitions

Finally, internet has positive impact on the competitiveness for some sub-sectors.

1. Export oriented data entry and data processing job can be performed since the data transmission is now easier.
2. Medical transcription services delivery will be more advantageous since the speed of the internet expects to be increased further.

 

3. Off-shore data entry services will be possible once the internet speed is more.

 

4. Web page hosting, domain registration and maintenance and other related matters are now possible through internet

 

5. Marketing of local IT companies is now possible though internet.

No particular strategy has been formulated to improve Internet supported service capacity. However, there have been a good number of enterprises concentrating in providing Internet enabled services. Following are the ongoing and prospective Internet enabled services:

• Web site development, hosting, web editing, maintenance, registration and domain network server, etc.

• Back office support services are also provided by 2-3 organizations and the number of organizations will be increased with in the short period of time.

• Off-shore data entry services are being given by some of the local IT firms

• E-commerce transactions are also processed sitting here in Bangladesh through merchant located outside this country by 2-3 companies.

• Independent portal is under active consideration of the local entrepreneurs

• Executive Resources Planning is also taking place in the export oriented ready made garment industry

• E-payment, electronic banking, business to business and other e-commerce activities are gaining momentum day by day.

• Tele-medicine is also introduced by one company for the first time under the patronization of the local USA mission office.

As far as export capacity is concerned, the authentic statistics on the major players is not available since the business is growing fast. However, the following enterprises are the prominent players in the market as of now, among others:

• World Wide Web Institute/ Xurex Technology International
• Raspit Data Management & Telecommunication (Raspit e-commerce)
• BDJOBS.COM Limited
• Electronic Banking- Q-soft Systems Limited
• Cyber business - DCCI
• Grameen Cybernet
• Proshika
• Many more

Profile of the exiting ISP companies is attached (Attachment- 8).

• Exploiting personal contacts through non-residents Bangladeshi living abroad
• Working experience of the promoters in the USA
• Technical soundness of the team including the key promoters
• Marketing and liaison office in the overseas
• Precise and well developed methodology and strategy
• Applying the technique of in-house demonstration of software developed
• Brand was helpful to some extent
• Properly identified market niche in the global market
• Being pioneer in the field and specialize in a sub sector

• Developing effective business partnership in the overseas market
• Clear and concrete vision and mission of the key promoters
• Enough emphasis on quality of works
• Offering competitive rates
• Timely delivery of job
• Fruitful marketing at minimum expenditure
• Strong determination, commitment and hard work
• Initial investment has been kept at minimum level with flexible policy
• Pursuing the US employer successfully to outsource jobs from Bangladesh

Due to weak image in the global market, inadequate infrastructure, lack of qualified manpower, lack of proper marketing plan, there are local IT firms who failed to make profitable business. We have identified a few local IT firms that could not generate profitable volume of business. Among others we have inquired the followings IT firms those have failed so far:

Reasons of failure can be analyzed from both macro and micro point of view. As a new player in the global IT market individual enterprise has to overcome two-tier problems as mentioned below, among others:

a. From macro context

• Bangladesh has very weak image in the global IT market
• Bangladesh has no significant presence in the global market
• Bangladesh still suffers infrastructure inadequacy
• Bangladesh is known as a "country of natural disaster" (i.e. flood, etc.)
• Internet connectivity was very slow and expensive
• Setting up an independent VSAT was very expensive
• Local IT market is still not developed
• Lack of adequate data transmission facilities
• Absence of government incentive to promote export
• Unfavorable fiscal policy of the government
• Frequently interrupted power supply
• Lack of clear understanding about the business involved
• No or insignificant emphasis on marketing aspects of IT business
• Lack of strong association for patronization
• Bangladesh is a small market for the countries outsourcing jobs
• Medical transcription is a new idea that requires good level of English
• Earlier there was no law like IPR and Cyber Law , which discouraged

the foreign companies to outsource from Bangladeshi IT firms

b. From micro context

• Inadequate technical know how and expertise of key promoters
• Scarcity of skilled required manpower
• Lack of proper marketing plan and appropriate marketing drive
• No experience in the local market
• lack of clear understanding about the business he/she involved
• Internal management crisis
• Features of the software to be developed was not properly understood
• Ignorance of the clause of the contracts of software development
• Absence of marketing agent /representative in the overseas
• Single service segmentation & lack of identifying suitable market niche
• Absence of provision for gestation period
• Lack of adequate financial support and assistance

Finally, the major obstacles that hindered the ventures to be profitable are the qualified manpower crisis, inadequate infrastructure and effective marketing

a. Acute shortage of tutors

In Bangladesh, there is an acute shortage of skilled tutor that is one of the main barriers to produce quality and enough computer literate according to the country’s demand.

b. Lack of computer skill graduates

One of the most important constraints to produce quality IT professional in Bangladesh is the lacking of continuous quality control, monitoring and maintaining high standard of the computer training courses and institution. Unless we are establishing this trend in our country, we will be far away from giving shape of our national dreams to emerge as an IT export oriented nation.

f. Low level of computer literacy

The computer literacy rate in Bangladesh is very low compare to many other developing nations in Asia. Absence of compulsory education in ‘computer studies’ at schools and colleges is the main reasons for this constraint.

g. Inadequate facilities for high level IT training

Facilities for high level training in IT are inadequate and not up to the standard. Although, many computer-training centers are operating in limited and in major cities, the rest of Bangladesh has not been covered to promote IT education for the interested people.

h. Lack of on the job training / internship program

Another important reasons of not developing enough manpower is the absence of provision of interaction within the industry (software firms) and the educational institutions to make the students ‘computer education’s / knowledge more acceptable to the relevant industry.

i. Lack of project management professionals

Despite shortage of manpower, as we are in this business we should customize our need. At this point of time the country needs to develop a good number of project management professionals, of which we have acute shortage.

Facilities for high speed of data transmission is so limited that we could say it is still absent in Bangladesh. And as a result, we are running backward at every moments from the real direction of IT revolution. We are not able to expose our capabilities, talents to the IT world as we can not coping up with the fastest changing technology.

The existing telecommunication facilities are not adequate for a smooth and rapid development of export oriented IT industries. We need more telephone lines at cheaper rates. Although, there has been steps to reduce this problem, but in reality the matter will take more time to bring us to a sound position.

Although, Telegraph & Telephone Board of the government has withdrawn its few restrictions from VSAT set up, but still the process has yet to be fully implemented. There seems a gap between policy paper and its implementation. As a result, Internet usage and internet-supported and enabled services are not "booming up" as it supposed to be.

Slow Internet connection is another constraint of establishing IT infrastructure in Bangladesh. We have a good number of ISPs, which is increasing every day, but their low speed makes the Internet operation expensive and time consuming. Another important reason of slowing down the Internet service is the scarcity of enough telephone lines which results in poor accessibility to the regular professional users.

Absence of sophisticated video-conferencing facility keeps as behind the emerging IT revolution. People (businessman, policy makers, etc) of the developed and a few under developed countries update themselves by using this revolutionary technology. We offer very limited facilities to that effect.

a. Streamlining the EPB Activities

The supportive activities of the Export Promotion Bureau should be faster and the global link with other government agencies should be developed. Online marketing information on IT should be made available by EPB like other export oriented sectors. Special incentive package should be provided that encourages the local entrepreneurs to take bigger challenge. Incentive being given in the other sector should be extended to IT sectors. Activities to ensure greater exposure and building image in the global market should be facilitated by the EPB. Special IT Cell should be established with full integration and support. Initiatives should be there to ease access of the local IT firms to the IT export market.

Although, the Bangladesh Association of Software and Information Services was formed in 1997, but it lacks dynamism and initiatives to take appropriate course of actions that help the entrepreneurs finding export market and removing trade barriers. The association, besides its present activities, should take collective efforts in collaboration with government and other national associations to have global marketing network. Country image building is one of the pre-requisites for the development of this sector. In India, there are several associations of software development and data processing services to boost up this sector by keeping them in the competitive edge.

No provision with in the financial system for funding against a marketing plan implementation. The government does not believe that this industry requires overseas marketing.

Arrangement of meetings/ seminars in selected locations is essentials to inform the IT world about the capabilities of Bangladeshis. There is no such steps or initiative of the GOB to expose our capabilities in the global market.

Tendency to use pirated software deters the foreign firms to invest and doing business properly in Bangladesh. The whole country is using pirated software has become chronic for us and should not be the real practice.

Domestic IT markets (especially software market) is very small. We still believe in manual system of documentation and records. This is happening because of most of us are unaware about the advantages of using different customize software.

Sending marketing missions to abroad by IT association and EPB to explore and create the market for Bangladeshi ability/ product is to be enhanced. Getting positive response from the abroad (especially North America and Europe) about IT related export is mostly depending on these types of efforts.

Still there is no organized initiative taken by the government, BCS or EPB to display the capabilities of software development firms in the IT field. Now-a-days some of the IT firms (especially software developing) are trying to get into the international market through their individual efforts, which again is not enough to capture a sizable share in the market from the strong rivals.

It is a big challenge for us to obtain the direct access to the international marketing due to many reasons specially skilled manpower crisis, capabilities unknown to the buyers, infrastructural problem, image building & proper marketing efforts etc. Instantly we can say that the only way of getting experience is to obtain business from the other countries especially from India.

Not enough participation in the international fairs, which could open the door for the Bangladeshi software development and other IT related firms to expose there developed products and services to the potential buyers. Recently, some of the country’s leading IT firms has attend the CeBIT fair in Germany and tried to get the attention of different national visitors to their developed software. This initiative is really an appreciable, but a regular participation at different fairs has to be ensured.

Still there is no quotable initiative taken for exhibiting the local software capabilities by organizing international IT fairs in Bangladesh. The government of Bangladesh also should take initiatives in the regard.

Proper marketing efforts at major software market is absent. Only very few firms have recently set up their overseas office to promote their export potentiality. Setting up such overseas office is very much expensive and even impossible for most of the Bangladeshi firms. EPB should set up permanent liaison office in the USA and UK, as these are the main markets of software and other IT services.

Non-existence of database information on Bangladesh IT professionals is keeping us from moving forward and compete with the strong rival countries. EPB, BCS or even association of software developing firms can develop a national database and host it in the web internationally so that access from any part of the world can be ensured.

So far, there is no IT firm having quality assurance certificate or ISO certificate. However, recently there has been an increasing trend within the reputed local IT firms to obtain ISO certificate to impress and assure global acceptance. It is expected that within next 1-2 years, a good number of locals IT firms will obtain ISO certificates. Information from reliable sources indicates that a few ISO consultants/consulting firms are offering this services to the local IT companies in collaboration with the ISO consultants of India, UK, USA, etc.

So far, there is no cost effective demonstration facility in the country. Before going to the export market trial demonstration is essential for the software developed for the export market. Irrespective of country, demonstration plays a vital role in the overseas market.

Although we shortage of manpower within the internal market, we should put efforts to produce enough skilled computer professionals for export that would ultimately build our image and reputation in the world market. By this way we would get enough export order. But, unfortunately since last year we did not have any visionary policy to do that. GOB and other institutions are trying now a days to push up this trend and help the nation creating no cost but strong image in the world IT market.

Traditionally, hardware consumes the 90% of the IT budget of individual and organization. Computer hardware is treated as the major part of the game and role of software is neglected. In the western countries this ratio 50%: 50%. There is no adequate provision for software procurement.

IT is looked at from technology perspective, but not the business perspective, which has led to failure of the sector in meeting its expectation of the country.

Planning and exporting IT products or services required large investment. Existing export incentives and / or marketing grants are not enough to encourage the IT firms to go for export. In recent years GOB and World Bank offering export incentives and grants to boost-up this sectors. But this opportunity should be more flexible and easy to get. Govt. should declare tax holiday for at least another 10 years.

The main problem the local software development firms are facing is absence or we can say very small domestic software market. Tendency to use free and pirated software made this difficult to capture the local software market. Now-a- days some Bangladeshi big organizations and some multinational companies local offices are started using the locally developed software and which is a good trend for us, but this trend should be encouraged.

Complexity in the banking system sometimes raise difficulty to invest in the projected field causing it delays and even make impossible to implementation the project, which does not help this sector to attain cutting edge.

Government, bank and other financial institutions should allow enough fund and loan to the general people to buy computer and other supportive things with easy and flexible installment facilities.

Another important fiscal problem that most of the developing nations facing is the absence of enough sources of financial backup to support for continuous development of the sector. In absence of venture capital and cheaper sources of finance, the entrepreneurs of this sector can not proceed aggressively.

There is a shortage of fund for the development or promotion of the market in Bangladesh. Promoting a market for developing products or services sales is a must and in absence of a continuous promotion process there is a risk of loosing market that Bangladesh always faces.

R & D practice is one of the important techniques of keeping one in a continuous development process. This is the only reason for which most of the under developing countries are staying far behind the developed nations. The necessity of R & D practice is unquestionable and undoubtedly essential for any country to develop and keeping it in a continuous development process. Critically, we can conclude that due to the non-practice of R & D, Bangladesh could not solve and/or implement most of its development works in past.

8. Payment in foreign currency is not allowed

Payment for software or other licensing arrangements are not allowed from Bangladesh. Payment of foreign exchange through credit card is prohibited. Licence fee can not be paid through credit card.

9. No working capital fund

No provision for working capital for the local IT firms. Financial institutions are reluctant to finance in view of the uncertainties.

1. Gap between the Policy Guidelines and Policy Implementation

There is a huge gap in between the Policy Guideline and Policy Implementation, causing delays in attaining the designed goal.

2. Absence of Cyber Law in Bangladesh

We do not have any Cyber Law in the country at present, although we have got an Intellectual Property Acts, which is awaiting implementation. A requirement for ‘Cyber Law’ has been submitted to the government and hopefully this important act will be passed in the parliament.

Although the Intellectual Property Rights Acts has been announced, it may take some time to properly implement. The more delay we do to implement the law the more we loose, as foreign investment will come late.

There are no established and specific rules and regulations for the payment system for E-commerce based financial transactions. And as result the E-commerce business is not getting popularity in Bangladesh.

• Knowledge of the policy makers about IT is limited
• Discovery process is unscientific and inaccurate
• Absence of official patron
• Movement of professionals (Enforcement of GATS) may appear as a constraint.

Private sector is the main player in this field and the government should be encouraged and pursued for providing required assistance to develop this sector. Over the last 3-4 years there has been a series of activities that have taken place to develop the sector towards a prominent service industry targeting the export market. Workshop, seminar, round table discussion, dialogues between public and private sector policy makers, training and other awareness development programs, fair and exhibition, symposium, trade show, etc. have been organized by the private sector. Private sector played the pivotal role and the government and other support organizations responded positively to bring a favorable environment for the overall development of the sector. Specific steps or strategies that have been taken by both private and public sector are summarized below:

a. Increased use of computer and computer software

b. Development of the required human resources

c. Building awareness of the sector's export potential

d. Identifying the opportunity of creating employment

e. Identifying the competitive business advantage for the country

f. Removing the infrastructure constraints

Apart from the above, national level strategic actions have been taken by forming a high level standing committee chaired by the Prime Minister. Other ministries and authorities involve in this committee are Ministry of Commerce, Export Promotion Bureau, T & T Board, Ministry of Education, Ministry of Science and Technology, Bangladesh Computer Council and the trade bodies. Recently, the committee formulated guidelines on different important aspects and assigns several ministries with several important tasks:

For infrastructure development: The Ministry of Science and Technology has been assigned to oversee the development and to take necessary actions for removing infrastructural barriers that hinder the IT industry development. This ministry will ensure development of necessary telecommunication facilities like IT park, IT village, high speed data transmission facilities, etc. and required manpower. For manpower development, the government created special funds that would be provided to 5 (five) universities for precise and full concentration on computer education for producing more and more computer science graduates and developing a pool of highly qualified teachers and trainers.

For export market development and coordination: The Export Promotion Bureau has been assigned to take necessary actions on market development and promotion and the overall coordination with other ministries and authorities involved. Under the marketing and export development, the strategy of the government is to organize the following activities:

• Sending Marketing Mission to the western economies that are the potential importers or countries outsourcing IT services. The proposed marketing mission will visit potential countries like USA, Germany, Denmark, Belgium, UK, Japan, Singapore, etc.. During the visit the mission plans to meet chambers, trade associations, local level management and authority and hold discussion with selected IT firms, seminar and workshops with non resident Bangladeshi living in these countries. The marketing mission will also observe other important aspects of the industry like employer-employee relationship and the personal policy in this industry that would be disseminated to the local industry to ensure rapid development.

• Attending international IT fairs, exhibitions, seminars, conference, etc.: Since 1991-92 the EPB has been participating different international fairs and exhibitions namely, CeBIT, Comdex, Bangalore IT, etc. Local entrepreneurs are being organized by the EPB to attend these fairs. The government provides funds for pavilion rent, stall construction and decoration, sample production and shipment, etc.

• Organizing the non residents Bangladesh living abroad and utilize their efforts for marketing and export development. The government also plans to organize the Non-Resident Bangladeshi (NRB) living abroad to assist the local entrepreneurs in exploring jobs for the local IT firms.

• Matching Grants for Export Market Development: The government also introduced special scheme with the assistance of the World Bank. Under this scheme the government identified software and data entry services are export oriented industrial sectors and providing individual companies and entrepreneurs 50% cost sharing grants for export market development.

Apart from the government initiative and support, a good number of private sector enterprises in IT industry is taking vigorous steps for manpower development and export market promotion. Individual companies are exploring joint venture partners, setting up overseas marketing office, exploring sub-contract jobs, sending marketing team abroad for market exploration, sending company profiles, service offers, developing and hosting individual company web page for internet based marketing at their own cost. Regular liaison with NRBs also a common phenomenon here now a day and some of the local IT firms already received fruitful results after contacting their NRBs connections.

Earlier there was no strategic action to develop the IT sector. Traditional approach was made by the government like it does in case of other industries. In fact, the above strategies have taken place very recently. Although, there has been some actions but no precise and detailed strategy was formulated by the government. The country was lacking necessary infrastructure and adequate manpower to capture a significant market share. Although the a few entrepreneurs started exporting IT services, but no absolute statistics is available with the Export Promotion Bureau. Data collected from various informal sources that are not fully authentic. However, it is true that the country started export of these services in 1992-93, although the volume is insignificant and the variety of services is limited.

• There has been an increasing trend in the development of local manpower and many private training institutes have been launched in collaboration with the foreign organizations.

• Entrepreneurs are very dedicated to bring success in this industry and they are taking all required steps within their limited capacity to bring a positive result and output from this industry.

• Increased number of queries from abroad and a good number of business delegates are coming from western countries like USA, Europe, Australia, Canada, etc.

• No marketing efforts has truly given or absence of any well planned and organized marketing activities in this sector due to constraint of funds and others. Marketing direction is not properly focussed due to lack of individual precise plan and thought.

Strategies should be developed addressing a short term and long term vision. A short -term plan for the next (1) one-year and a (5) five-year plan should be developed. A well thought strategic plan is required from the national level. Particularly the strategic actions may be taken in the following areas:

• The government should engage one expert team or consulting group to assess the strengths and weaknesses of Bangladesh in the global market and develop and formulate appropriate strategy to overcome the weakness. The consultant should be advised to develop a detailed national marketing plan.

• The government should extend all possible support and assistance to develop the industry. The government should increase IT expenditure and monitor to see the IT expenditure and make a comparative analysis on basis of which further suggestive actions can be taken.

• Market exploration support should be strengthened. Adequate financial assistance should be given to accommodate the expenditure required for marketing promotion for Bangladeshi companies in the West.

• Setting up marketing office in several parts of the world and the option for joint use of the marketing office by the local small companies. Match making center can be developed in the various oversea marketing offices. Bangladesh government should take initiative to set liaison office in Silicon Valley like other countries have already. NASCOM has office in Silicon Valley. Like the Jute sector's office in Brussels and Nairobi, we should have similar offices for IT sectors.

• Intensive effort should be given to produce manpower. Computer education should be given utmost emphasis and the maximum funds have to be allocated for computer education. Specialized university should be established in Bangladesh like Malaysia and other countries.

• The donor agencies working in Bangladesh should be encouraged to earmark adequate funds for this sector. Manpower development assistance and subsidy can be provided by the donor agencies.

• Emphasis should be given on development of local IT professionals through introducing innovative programs and activities like expensive programming contest, best IT professional award, Innovative software development contest, etc.

• Cost of Internet based communication should be brought down at a minimum level that brings level playing field for Bangladeshi entrepreneurs.

• Individual IT firm should develop their individual business plan and target a specific market segment and apply and adopt necessary available skills and resources accordingly

• The government should prohibits the unethical practice in the IT industry like piracy of software, etc, though speedy enforcement of Intellectual Property Rights

• The government should encourage local organizations in every sector to apply information technology services so that the local market grows. In this case, the government may extend incentive to the local government, semi-government and autonomous bodies to apply IT at a maximum level, so that the local IT firms get more jobs and they mature themselves from the local market. In fact, for export development, it is better if we have enough sellable experience in the local market.

• Rapid implementation of IT village project to ensure a sizable market place for the foreign companies to outsource jobs from Bangladesh

• Steps should be taken to bring level playing field for Bangladesh in terms of quality of IT professional and the cost of telecommunications services. Dedicate line capability i.e. 60kbps and international online services and VSAT etc. for back office services capability

• Entrepreneurs should be given a grace period not less than 1 and half years which is considered to be minimum gestation period for the development of this sector. Financial sector should be made aware about business of the IT sector.

• Liaison in USA, Europe, Canada, etc. with capable personnel to be able to convince the potential buyers to procure software developed from Bangladesh.

• Marketing office at least in the USA, Europe through effective front desk and demonstration facilities should be initiated by the government.
• Banking sector should be liberalized to adopt a high degree of application of information technology and services.
• Attitude of people towards the international market should be changed
• People should be made aware about the various use and benefits of the information technology and its services
• Required infrastructure is to created immediately to handle a large volume of exportable IT services
• The local entrepreneurs should be made understand the whole stuff of the IT business i.e. every one must have their precise and concrete business plan
• Social security should be ensured and the social barriers should be removed to develop and encourage the qualified IT professionals to work in the country. Brain drain should be stopped immediately.

Challenge has to be faced before electronic commerce realizes its full potential in Bangladesh. Some steps have to be taken if our business community wants to get involved in this type of business. So,

• Our prime strategy needs to be focussed to the winning of consumer confidence regarding the electronic trade.

• To develop a few popular web site of our local products and services on the electronic market. These sites should then create links to the company worldwide and help the browsers turn into potential customers. There should be link between each of the company site, so that the domain of E- commerce increases as a whole in our country.

• The government should take steps to improve the traditional banking system and help to reduce the cost of using the net.

• Initiate marketing of E- commerce of cyber business activity for any firm wishing to export or import IT services. Many governments and international businesses are trying to create a global information society, as globalization gradually forces firms to compete across geographic boundaries and meet the requirements of their clients wherever they are. The motto "thinks globally, act locally" has now become incorporated in the mission statements of many international firms. This philosophy has been greatly strengthened the global access to the Internet.

• The government should provide more funds for market promotional activities.

• Internet based programming skills should be developed

• The government should increase available bandwidth.

• The government should reduce cost of internet access

• Focus our core competency in the delivery of services and solutions

• Security and legal support should be provided for cyber transactions

• Entrepreneurs have to move forward and faster from within the existing set-up and infrastructure. Although, there are some difficulties, but these problems should not be considered as problems or hurdles any more, rather appropriate business approach and aggressive marketing strategy formulation are important at this point of time. Individual company should emphasis on I) Promotion, ii) Funding and financing iii) Timeliness iv) dedication, etc.

• Individual enterprises should come forward with their well-designed business plan supported by adequate financial resources.

• Productization should be initiated to enter the global market.

• The government should deregulate the telecommunication sector as much as possible and private sector should be encouraged to provide support services for the export of IT services.

• Internet support should be developed further with adequate back–up support

• The government should give incentive to all state universities to increase their seats for computer science education and the more and more students should be enrolled in the universities in computer science department immediately.

• There should be continuous policy support for telecommunication and export incentive for the local entrepreneurs

• The government should increase the number of student in the Polytechnic and the each and every district should have at least one such institute.