Bangladesh, the new kid in the world of outsourcing

People work at a call centre in Dhaka. Bangladesh has the potential to flourish in the world of outsourcing.Photo: Amran Hossain

I have just come back from "Digital World2012" and a conference on business process outsourcing (BPO) in Bangladesh. This was the first time that I had visited Bangladesh and it was their second annual ICT-BPO conference. The call centre and outsourcing sector only started in 2008 and is still in it infancy and over 35,000 people visited the events and exhibition.
What I saw was a lot of enthusiasm and general goodwill from all concerned. However, this is not enough in and of itself to create the right environment for Bangladesh to push its way into the global BPO-ICT world and take its place with all the other Asia-Pacific nations.
What helps is that Bangladesh has a very large pool of university-educated workers who are itching to get involved; the enthusiasm is palatable and the government has really got behind the BPO-ICT sector. I have to admit the last time that Bangladesh was in my consciousness with the famous concert for Bangladesh in 1971 which was put together by George Harrison and the late Ravi Shanker.
The other interesting thing that I noticed was the reverse brain drain. There are lots of experienced and internationally experienced Bangladeshis repatriating home and really adding to the intellectual horsepower of the ICT BPO community - after all, who doesn't want to live close to their home and families.
Europeans began to set up trading posts in the area of Bangladesh in the 16th century; eventually the British came to dominate the region and it became part of British India. In 1947, West Pakistan and East Bengal (both primarily Muslim) separated from India (largely Hindu) and jointly became the new country of Pakistan. East Bengal became East Pakistan in 1955. Although more than half of GDP is generated through the service sector, 45 percent of Bangladeshis are employed in the agriculture sector with rice as the single-most-important product. Bangladesh's growth was resilient during the 2008-09 global financial crisis and recession.
Interestingly Bangladesh is the second largest garment manufacturer in the world after China and they proudly use the tag line “We clothe the world”. In just a few years since the start of the BPO sector, it has grown to over 50 plus call centres with over 10,000 employees. The present government has designated ICT-BPO as a preference sector allowing this segment to receive all the support required from the government, for its continued success. Garment exports, totalling $12.3 billion in fiscal year 2009 and remittances from overseas Bangladeshis, totalling $11 billion in fiscal year 2010, accounted for almost 12 percent of GDP.
The ICT industry in Bangladesh is relatively new in comparison to other business sectors. The BPO industry is well aware of what BPO-ICT has done for The Philippines, lifting it from abject poverty to the second fastest growing economy in Asia after China with a growth rate of 7.8 percent. In The Philippines it is generally agreed that for every dollar that the country earns it has a multiplier effect of 3 to 1, in Bangladesh that multiplier effect is 11 to 1.
Bangladesh with a population of 160 million is unlikely ever to better India, The Philippines or the fast rising Mauritius across the entire range of outsourcing offerings, which also include all kinds of information-technology services. However, never say "never": the green shoots are appearing everywhere and they are starting to understand that the future is visual and digital.
The Bangladeshi workforce is traditionally renowned for their quick learning abilities. The workforce, especially, has historically strong abilities in mathematical and logical analysis processes. Bangladeshi students regularly appear as winners in a number of programming and mathematical competitions globally.
I am sure that there are many other things to consider, including business grade English skills. However, in my mind there are three areas that need to be addressed very quickly so that Bangladesh can move forward while its window of opportunity is open. The Bangladeshi workforce has higher competencies in English compared to countries like China and Vietnam. However, the language proficiency is to some extent skewed towards professionals with better schooling.
What Bangladesh needs is a 'brand' in much the same way that when one thinks of Paris one thinks of the Eiffel Tower or when one thinks of Singapore one thinks of 'Singapore girl' is or Malaysia with its tagline of 'Malaysian truly Asian', 'Tulips' for Holland or “Number 1 for Voice” as the tag line of The Philippines.
This is important as it gives the ICT-BPO community something to rally behind and in terms of "corporate vision" it will give the Bangladesh ICT-BPO community a brand that they can identify with and more importantly that the outside world can understand about what Bangladesh has to offer. Looking from the outside in "Brand Bangladesh" is weak and anemic.
As the BPO sector shifts gears to be a knowledge process outsourcing (KPO) sector, they are delighted that they are about to have their day in the sun. There is no doubt that there are micro sourcing digital savvy people in Bangladesh who have taken advantage of platforms like freelancer.com, Odesk, eLancer and Guru.com. Around 250,000 young Bangladeshis have voted with their feet and are actively participating and competing for employment and project opportunities offered by these platforms.
The fact that 30,000 new "micro sourcers" per month are joining their colleagues is a brilliant albeit surprising addition to the mix. Many of these young people will be self-taught and thus there is a need for up skilling and training so that they can pitch for more complex and high-value work whilst at the same time offering quality. This is exactly where the BPO industry is headed and Bangladesh is going to be a serious player with a digital savvy workforce showcasing their visual and digital talents.
Bangladesh is striving to implement relevant education policies to ensure that their students are appropriately qualified to enter this sector enabling it to grow.
In the end, quality is what will make or break this market. The fact that each dollar imported into Bangladesh has a multiplier effect of 11 to 1 should be more than enough incentive to put training programmes in place that are paid for by the government. The entire society will benefit as this income flows through the economy.
There are some structural issues around micro payment processes to support this new sector and some consideration needs to be given to facilitating easy to use micro payment systems that may run parallel to the banking system. Pay Pal does not exist in Bangladesh, so there is an opening for financial players to develop the market.
I believe that the Bangladeshi talents are better suited for visual communications like web design, web development, animation and other digital skills. It's part of the Bangladeshi DNA to trade and be entrepreneurial, why not encourage this inherent characteristic and let the market decide how it wants to use these new information super highway channels as have the micro sourcing group referred to above. In my view Bangladesh would be best served by offering free internet high speed broadband access to its people and allowing people at an individual level to participate in the knowledge economy in any way that they see fit.
Because of the infamous anti Islam video the government has banned YouTube. In my view this is a retrograde step and it will only hurt Bangladesh, it's akin to closing the library because you don't like one book. YouTube is a vital part of the knowledge economy and at a practical level it allows foreign companies to create videos to train human resources inside Bangladesh.
If Bangladesh moves quickly I can see a very bright future in much the same way that The Philippines lifted its country to become the Number 1 in call centre voice work.
However, the challenge for the Bangladesh BPO industry is that it is still small and does not yet have the economies of scale or capital needed to pitch for bigger projects. One of the more obvious things to do is for the local telecom and utility companies to outsource their voice work on a local level so that the industry can grow and develop its skill base. Moreover, there will be plenty of wiling employees at the entry level. However, middle management will be scarce until the sector matures. Established international BPO players might look to partner with local Bangladesh players to develop the local market.
Furthermore, it became apparent to me during my visit that the missing link to be successful in handling voice-related work -- for Australia at least -- is "culture training" which goes beyond simple voice and accent assimilation. Foo Boo has developed a programme that addresses this gap. If you want to know more or have some ideas about what should be involved in such a programme, then drop me a line.
The big question is whether the Bangladesh ICT-BPO industry can now move up the value chain from BPO to KPO. To keep growing rapidly and profitably it needs to capture some of the ever growing more sophisticated higher-value back-office jobs.
So the challenge is there, the question is "Can Bangladesh rise to it?"

Martin Conboy is the president of Australian Business Process Outsourcing Association.