Computer services export crosses $300m BASIS says actual amount is much higher

Computer services export from Bangladesh has crossed the $300-million mark as the coronavirus pandemic turbocharged the global demand for data processing, hosting and consultancy services.

Local IT companies and freelancers have bagged an increased number of orders from clients across the globe since the crisis struck as customers had to rely more on digital tools to adapt to work-from-home practices.

The industry fetched $303.76 million in fiscal 2020-21, up 10 per cent year-on-year, showed data from the Export Promotion Bureau (EPB).

The higher earnings were driven by computer services such as data processing, hosting, consultancy, installation, and maintenance.

The receipts from the sales of IT-enabled services such as data processing and hosting increased around 27 per cent to $217 million.

Computer consultancy services raked in $24.07 million, up from $20.31 million a year ago. And it has continued to maintain the uptick.

In July, the earnings from computer services export grew three times to $78 million from $23 million a year ago.

"At the beginning of the pandemic, computer and IT services export plunged," said Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS).

"But when the economies around the world started to reopen after a few months, foreign companies began to outsource, and our freelancers were taking a huge number of orders."

Companies in Bangladesh have now started to get high-value tasks such as graphics, the internet of things and artificial intelligence, and the hourly rate for the works is higher.

"This can also be attributed to the increase of computer services export," said Kabir. The entrepreneur put the annual export earnings from computer services at more than $1 billion, which is far higher than the EPB figures.

"This is because the government figures don't include the earnings of freelancers properly, and many service providers bring export proceeds through non-banking channels."

For the growing export orders, many IT firms have hired new employees, and many youths have found jobs in the sector.

Computer software export suffered a blow as it dropped 30 per cent year-on-year to $47.44 million in 2020-21. The earnings stood at $73 million in 2019-20.

Kabir blamed the closure of offices in Europe owing to the lockdowns for the decline in software exports.

"Many work orders were cancelled and suspended. Payments were not cleared, so many local companies were hit," he said.

Thanks to the recovery in global demand for e-commerce platforms and fintech, some software exporters were flooded with orders in the second half of the last fiscal year.

More than 225 companies from Bangladesh export software to over 80 countries, according to Rashad Kabir, managing director of Dream71 Bangladesh Ltd.

The software developer won multiple international tenders, and its revenue also shot up during the pandemic.

"The actual export is much higher than the data we have got from the EPB. Apart from the software companies, there are about 6 lakh freelancers whose income has not been reflected in the official figure," said Rashad, also a director of the BASIS.

Ferdous Ahmad Shaon, managing director of Cefalo Bangladesh Ltd, a software exporter focused on the European market, said the first few months of the pandemic had posed a major challenge as many orders were axed since many clients had to temporarily shut business.

"But since the beginning of this year, we have been witnessing some positive growth that we never witnessed," he said.

Cefalo hired more than 50 people in the past six to seven months to cater to the increasing orders.

"Businesses around the world have realised that digitalisation is an important tool to take on the blow of the pandemic. Every entity has increased their investment for the development of IT-related things," said Shaon.

"So, we are enlarging our existing teams. We have acquired seven to eight new customers."

The biggest growth occurred in the financial technology domain, and Cefalo is developing related apps for the European market.

The company is currently working on online food ordering systems for Europe and has received an order to automate hotels.

Export receipts for installation, maintenance and repair of computers and peripheral equipment services plummeted around 50 per cent year-on-year to $5.85 million in FY21.