Impact of COVID-19 on IT Industry of Bangladesh

By Rocketech IT at 09:40 PM, 19/05/2020

As the global economy is facing the ‘Great lockdown’ recession caused by the COVID-19 pandemic, the economy of Bangladesh too has been hit hard. With only 15% of the country’s population making more than USD 6 per day, Bangladesh stands in a vulnerable position to tackle the economic impact of COVID-19. One of the sectors that have taken the impact both positively and negatively is the IT Industry (Information Technology Industry).

Overview of Bangladesh’s ICT Industry

Bangladesh has been working steadily to set up "Computerized Bangladesh", an indispensable piece of the administration's Vision 2021. IT organizations in Bangladesh began sending out programming around two decades prior, joining the business procedure redistributing (BPO) fleeting trend. Bangladesh Association of Software and Information Services (BASIS), which began its excursion with 17 organizations in 1997, presently remains at 1200+ organizations engaged with programming improvement and giving IT administrations. ICT sent out by 250+ organizations, in 60+ nations around the globe, represented USD 800 Million in which was 2.2 percent of the all-out fare esteem. According to USAID, North America is the nation's primary fare goal.

Bangladeshi IT and ITES firms produce practically 35% of its fare income from US purchasers, 15% from the UK, trailed by various EU nations, for example, Denmark and the Netherlands. Various neighborhood endeavors likewise trade IT-ITES administrations to UAE, Saudi Arabia, South Africa, Malaysia, and Singapore. This is the difficult work of the 1 Million individuals who are working legitimately in the ICT business. The administration had set a fare focus of all-out USD 5 Billion by 2021.

The Information and Communications Technology (ICT) exports by 250 plus companies, to 60 plus countries around the world, accounted for $800 million in 2017, which was 2.2 percent of the country's total export value. According to USAID, North America is Bangladesh's main export destination.

E-Commerce & E-Service

Likewise, during the late '90s, the online business industry began its excursion in Bangladesh, be that as it may, didn't observe any development up until the most recent decade. The improvement of banking offices coordinations correspondence and electronic installment strategies has made open doors for the internet business division of Bangladesh to develop. Over the previous years, the nation's shopping conduct has moved drastically with the adjustment in the expectation for everyday comforts of the populace. The developing populace is presently progressively familiar with making exchanges of items and administrations on the web.

Starting in 2019, as per an exploration firm, distributed in Bangladesh every day], the web-based business market of Bangladesh is expressed to be USD 1.6 billion and is relied upon to twofold to USD 3 billion constantly by 2023. Bangladesh's administration forced a 7.5 percent VAT on this part may unfavorably influence the progressing digitization plan of the legislature and hamper the work rate in this division as indicated by industry insiders. As far as income from web-based business, Bangladesh positioned 46th position internationally. Developing cell phone entrance and notoriety of 4G arrays alongside the expanding buying intensity of buyers are driving the internet business industry over the world including this south Asian nation, Bangladesh. With the approach of COVID-19, the online business industry is seeing an unnatural upsurge all-inclusive and with the world heading into an inescapable worldwide downturn, the development of the business will undoubtedly back off.

Covid-19 on IT Industry

Covid-19 possesses a unique challenge for the IT industry of Bangladesh as it is only in the growth stage now. Industry insiders expect the overall revenue for the 2020 year to fall by 20-25 percent due to the pandemic. Companies that deal with the BPO of medical and legislative data for North American companies – such as Therapy, Augmedix – are somewhat stable in their business now, given the heightened respiration of the medical industry.


The COVID-19 effect has a special test for the IT business as it is just in its development stage in Bangladesh. Industry insiders expect the general income for the multi-year to diminish by 20-25 percent because of the pandemic. Organizations that manage BPO of clinical and administrative information for North American organizations, for example, Therapy, Augmedix are to some degree stable as far as their business is given the increased breadth of the clinical business. Nonetheless, the industry players that principally center around redistributing or programming improvement, are off guard. India serves 16 percent of the worldwide market and they're as of now foreseeing a lower development rate than the recently evaluated 7.5 percent during the current year (Nasscom).

Despite the fact that the business actually has the ability to work remotely by its temperament, the effect of the pandemic is as yet felt due to faltering business orders from end customers. Since Bangladesh ICT send out is essentially reliant on business from North American and European organizations, there has been a general fall in re-appropriating given the spread of the infection in these locales. As most worldwide tech organizations are presently covered with representatives telecommuting, the effect of business development has deteriorated and the wave has been felt in the neighborhood redistributing industry. Other than a couple of huge tech organizations in Bangladesh, most organizations don't work on a retainer premise and are subject to extending the premise business age. Because of the abrogation or delaying of activities in such a surprising occasion, business congruence is in a difficult situation, bringing about neighborhood organizations confronting money crunches. This is material in any event for those that don't have a power majeure arrangement in their agreements than works in support of them.

However, the industry players that mainly focus on outsourcing of software development are at a disadvantage. India, for example, serves 16 percent of the global market and is already predicting a lower growth rate than the previously estimated 7.5 percent for this year, says the Indian IT industry body Nasscom. Although the industry can operate remotely by its nature, the impact of the pandemic is still felt due to stuttering business orders from the end clients. Since Bangladesh's ICT export is mainly dependent on businesses of North American and European companies, there has been a general fall in outsourcing given the spread of Covid-19 in these regions.

Maintaining Cash Flow

Software organizations that serve the neighborhood advertise generally are confronting more difficulties contrasted with those that are centered more around re-appropriating. Because of the monetary end, neighborhood customers are slowing down installment prompting income challenges for these organizations. Organizations in North American and Europe are sourcing locally for the present, particularly on security observing, catastrophe recuperation and so on as conveyance of work from seaward administrations, particularly China has gone to a dramatic end. Kabir, Co-Founder, and CEO of BrainStation-23 say that there's likewise potential here for development – if organizations are spry and are eager to turn quick. As indicated by him, video spilling, AI, and web-based learning are solid business vertices to investigate now. They have seen a solid upsurge popular for Moodle, an open-source Learning Platform or course the board framework (CMS), from customers in the instruction segment because of the abrupt increment in online study halls. Government contracts where outside governments are looking for programming arrangements comparable to the pandemic emergency are likewise a potential objective development zone for the business.

WFH for IT Company Employees

Cutbacks are yet to occur in the business yet littler organizations with constrained incomes may need to depend on pay slices to endure if the pandemic perseveres long haul. On a smaller scale level, since tech organizations work on a dexterous procedure of conveying work in a foreordained deliverable calendar, responsibility because of remote work has disturbed the conveyance cycles. Als0, most organizations are having issues with remote work as misfortune and conveyance of information over unprotected web associations is a major test. Enormous organizations work through their own secured servers and frameworks in their office and information sharing and affirmation of insurance of said information on an open framework is a major test for most. In India, a few organizations have started introducing corporate workstations at their representative homes yet this is difficult to continue and execute on an industry-wide scale. Another fundamental test detailed by the business is the absence of web transfer speed while working from home. Because of the abrupt upsurge of interest for home web utilization, the foundation is stressed and its effect is likewise felt in the IT business. The main silver covering in such an inauspicious circumstance is, that re-appropriated administration work areas are supporting immense volumes of end-clients attempting to get to frameworks remotely however it additionally accompanies the test of architects encouraging overpowering interest frequently with innovation stacks with which they have no preparation or commonality.

Positive Impacts by Covid-19 on IT Industry

In a period, for example, this, the web-based business and e-administration industry is likewise confronting comparative difficulties. At first, with the greater part of the urban Dhaka populace put into segregation and following social separation, the number of online buys in the B2C internet business stages (, Pathao,, and so on) confronted an unnatural spike. Notwithstanding, food conveyance administrations have seen a sharp downturn in only the previous week with orders falling by 75 to 80 percent as indicated by an industry agent from Shohoz. Subsequently, 40 to 50 percent of eateries have additionally shut down prompting the fall in business. According to a BRTA mandate, ridesharing by Uber and Pathao has been restricted to confine the spread of COVID-19. The interest in influenza-related items, for example, cleaning operators and solid enhancements are high. Be that as it may, because of the lack of provisions inferable from the pandemic, the constrained items are valued at a higher range. Conveyance of e-administrations has additionally gone to an end because of the usage of the isolate. Chaldal has seen an expansion in online staple conveyance requests and alongside other food conveyance administrations have imitated the contactless conveyance framework. Online supermarkets are encountering twofold digit developments in the number of conveyances with Chaldal's normal 5000 requests for every day bouncing to 10,000 to 15,000 requests for each day on a normal. The computerized e-wellbeing administration industry is confronting an unexpected flood incall meeting with Telenor Health detailing a 30 percent expansion in telephone interview services. Similarly, Praava Health has propelled a minimal effort video counsel administrations to handle the upsurge in social insurance exhortation requests. Since the e-administrations and internet business industry is exceptionally reliant on day-wage/legally

Measures that Should be Taken

With the difficulties now obvious for the IT and advanced segment, the legislature must give critical consideration to its third-motor in a post-coronavirus Bangladesh. On a B2C level, e-administration organizations, for example, food conveyance and ridesharing ones need to make a sheltered and clean condition in their activities by guaranteeing that all the conveyance men, riders and drivers play it safe truly. On a B2B level, tech organizations need to help their staff by giving legitimate work from home activities and making responsibility through better administration and conveyance methods. The organizations likewise need to promise their customers that the work from home won't sway business fundamentally and prudent steps are being taken to guarantee business congruity. The coronavirus stands to clear out 1.1 percent of Bangladesh's total national output, bringing about 894,930 employments being lost according to a projection of the Asian Development Bank. Almost certainly, the IT and computerized industry will fall into this mash alongside the readymade article of the clothing industry. Also, for long haul development affirmation, arrangements ought to be made for the business as of late looking for $1 billion in help from the International Monetary Fund and the World Bank by the legislature. As a matter of fact, it will be difficult to not feel the effect of the pandemic in any industry yet preparatory and steady arrangements will guarantee that the tech and computerized industry won't be injured in a post-COVID-19 economy.