GRIPS

Industrial growth, demand creation and capacity

enhancement in ICT sector: A comparative
analysis of the ICT Policy of Bangladesh
Comparative Analysis on Science, Technology and Innovation Policy

Shamsuzzoha

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Table of Contents
Background................................................................................................................ 3
Rationale behind comparison..................................................................................... 4
Methodology............................................................................................................... 4
Policy framework & organization................................................................................ 5
Policy Outcome........................................................................................................... 6
Growth of the Industry................................................................................................... 6
Domestic Market & Demand Creation................................................................................7
Capacity Building......................................................................................................... 8
Institutional Setting.................................................................................................... 9
Analyzing Policy Contents........................................................................................... 9
Vision........................................................................................................................ 9
Objective.................................................................................................................. 10
Strategy................................................................................................................... 10
Implementation Plan.................................................................................................... 11
Domestic ICT Industry Promotion...................................................................................11
Enhancing Productivity of other industries using ICT...........................................................12
Demand Creation........................................................................................................ 13
Capacity Building....................................................................................................... 13
Policy review process.................................................................................................. 14
Strengths & Weaknesses of the Policy......................................................................14
Recommendations.................................................................................................... 15
Conclusion................................................................................................................ 16
References................................................................................................................ 17
Appendix-1............................................................................................................... 18
Abbreviation............................................................................................................. 18

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Acknowledgement

I would like to express my earnest appreciation to Professor Intarakumnerd Patarapong for his
through guidance in the development of this paper. His suggestions regarding the methodology
and framework of the study were immensely valuable in organizing my research idea in a logical
manner. I am expressing sincere thanks to all my colleagues who participated in the course of
Comparative Analysis on Science, Technology and Innovation Policy and enriched my
understanding through their presentation and comments.

MEP12216

Industrial growth, demand creation and capacity enhancement in

ICT sector: A comparative analysis of the ICT Policy of Bangladesh

Background
Bangladesh is a fast growing market for ICT and Telecom goods and services.
It can be revealed from the increase in Telecom terminal uses and the
increase in pc penetration. From the data of cellular mobile subscriber, it has
been increasing with an average growth rate of 70% from the last 10 years.
In terms of internet usage, though it has taken pace a bit lately, the usage is
growing with an average growth rate of 100% from 2008. The reduction in
terminal equipment price, i.e. low priced mobile sets, cheap personal
computers, increasing availability of the electricity network and the most
important factor, ICT awareness through the educational system are
expanding the scope and market of telecom services in Bangladesh. The last
census implemented in 2011 also reveals the increasing usage of telecom
gadgets in the urban area and a heavy introduction of such in the rural mass.
Also the government has set priority in engaging ICT services more and more
in the daily life of the people and thus putting it as a prime engine in the
countrys economy. This concept paper highlighted several areas of priority
to promote ICT usage and ICT industry in the country. Keeping in view the
vision presented in this concept paper, ICT Policy 2009 has been issued to
materialize the visions of the concept paper. This policy is a totally improved
and innovative one considering its previous version of ICT Policy 2002.
Though a number of new projects have been undertaken to enhance
industrial capacity, developing skill of the personnel, creating demand for
ICT goods and services and to enhance the productivity of the existing
system, the actual benefit and economic return of such huge investment and
time exhaustive policy implementation is not very clear. The government so
far has tried to illustrate only the success in implementing several projects,
but there is no systematic evaluation of the implemented projects. There
evaluation criteria are not effectively included in the provision of the
respective policy and the concept paper itself does not provide any guidance
in this respect. So, this is an issue of huge debate that whether the policy
undertaken has been successful or not. As these is no published paper
evaluating the policy outcomes in a systematic way is present, this study
aims in analyzing the policy outcome through a comparative study. For
comparison, best practices followed in the economies similar to that of
Bangladesh have been used. Also, references are presented form world best
practices implemented in the initial phase of industrial development. While
discussing the effectiveness of the policy, two key aspects of policy are
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required to be analyzed. These are the Policy Process and Policy Content.
Policy Process includes, but not limited to, the organizational phenomenon of
the policy, institutional actors, interrelation between actors, legal &
regulatory framework under which the policy is implemented. Due to the
time constraint and scope of this paper, Policy process would not analyzed in
detail rather only brief reference would be given in different section of this
paper. On the other hand, Policy Content includes, but not limited to, the
scope of the Policy, particular industry addressed by the policy,
implementation plan and their procedures, adaptability and scope of
revision, evaluation mechanism etc. This paper would investigate in detail
the aspects of Policy content. Discussion of each of these aspects would be
presented with their shortfall, success compared with the policy provisions of
India. Specially the impact of the Policy content in promoting ICT industry in
the country, in creating domestic demand and in enhancing international
competitiveness would be the our focal points at which we would compare
the two countries policy. In the end of every discussion, recommendation
would be given to revise the policy to provide better outcome for the
industry and the economy as a whole. Such revision is observed in many
industrially successful countries. Proper evaluation and quick revision of the
policy provide improvement in the policy implementation process by
reducing the latency of policy shift. This also provides opportunity to adjust
with the changed environments and other factors affecting policy outcome.
Rationale behind comparison
The ICT Policy of Bangladesh is compared with that of India in this paper.
India has been chosen because of its number of similarities with that of
Bangladesh. India is the closest neighbor of Bangladesh and shares similar
type of demographic and cultural phenomenon. Also, both countries have
experienced rapid growth in ICT, specially in the expansion of
telecommunication network and services in recent years, as expressed by
ITUs ICT Indicator Database. The wireless cellular service penetration in
India is 70%, while for Bangladesh it is 60%. GDP per capita of India is 1106
USD while for Bangladesh it is 960 USD (2012, World Bank). Both countries
experienced around 7-8% GDP growth throughout the last decade (India a bit
higher). In terms of international connectivity, both countries share similar
network facilities like submarine cable and satellite services. The
development of Pharmaceuticals industry and garments sector in both
country follows success stories, while in Pharmaceuticals India was the
pioneer and in garments, Bangladesh has achieved more success so far.
But the ICT sector in India has observed phenomenal growth while
comparing with Bangladesh and most of the policy initiatives undertaken to
promote ICT sector was followed by positive response from the industry in
terms of creating business and capacity development in particular. It is quite
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surprising to see that the initial development of Indian ICT sector was not
promoted by the so called ICT policy, rather very specific and goal oriented
guidelines and policy. So, the policy contents of the ICT oriented policy and
their success would be compared between Bangladesh and India and also
the policy process and implementation framework would be referred in brief
while discussing the policy contents in detail.
Methodology
For comparing the ICT policy of India and Bangladesh, we will use the Most
Similar System Design (MSSD) methodology. This methodology suggest that
when the dependent variables are of different types and explanatory
variables are mostly similar but with some dissimilar factor, then the
dissimilar factors can be interpreted as the prime responsible for the
difference in outcome, i.e. difference in dependent variables. While
comparing the case of Bangladesh and Indian ICT policies, we see that, there
are a number of similar factors associated with these countries, specially
considering the initial growth of the two sectors. Though their cultural
heritages have different identity, they have common characteristics.
Languages of two countries have been evolved from same root. They have
very similar type wireless network coverage, fixed internet penetration in
both country has been started to take up from last 3-4 years. Education rate
is close to each other with India in a bit leading role. Human capital quality of
both countries has shown similar strength both in the local and international
market. They share the same colonial heritage and thus are evolved under
similar historical transition. Both countries have strong democratic political
structure with India having stronger institutions to safeguard the democratic
process. But there is apparent difference in the outcome of the ICT polices in
India in promoting domestic productivity of ICT industries, in creating new
demand for ICT goods and services and in enhancing the countrys
international competitiveness in general. So, we will look in to some other
aspects and explanatory variables which would possibly explain the
dissimilarity.
Policy framework & organization
To investigate the policy contents of the two neighbors, this paper will first
look into the framework of ICT policies and their way of organization. In
Bangladesh, the ICT Policy 2009 is a single document and addressed all
aspects of the ICT industry promotion and assigned the responsibility of
particular action to particular public and/or private agencies. It includes one
vision, 10 objectives, 56 strategic items and 306 implementation plans.
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Though this policy is issued under the jurisdiction of ICT ministry, other
specific agencies are also responsible to implement their respective action
item.
On the other hand, the ICT policy of India was issued only under the name of
ICT policy in 2012. Surprisingly and uniquely, the ICT promotions by the
public agencies have been done through a number of particular goaloriented guidelines and specific Acts. So, with the intension to analyze the
framework of Indian ICT policy, we must also consider the following
documents as an integrated one with the new issued ICT Policy 2012:
1. Report of Task Force to suggest measures to stimulate the growth of IT,
ITES and Electronics Hardware manufacturing industry in India
2. NeGP Guidelines for Operational Model for implementation of Mission Mod
e Projects by the Line Ministries/State Departments
3. Guidelines for Capacity Building and Institutional Framework for egovernance under NeGP
4. Guidelines for submission of proposals for seeking DIT support for
organizing Conferences, Seminars, Workshops, Symposiums etc. in select
areas of Electronics, Information and Communication Technology (ICT)
5. Guidelines for Implementation of the Common Services Centers (CSC)
Scheme in States
6. Guidelines for implementation of Capacity Building Scheme
7. Guidelines for Strategic Control in Outsourced Projects
8. Guidelines for Setting up of Dedicated Project Teams
Department of Electronics & Information Technology is responsible to
promote the ICT industry in India and in materializing the vision set by the
ICT policy. The policy includes 15 objectives very different in nature from
those of Bangladesh, a total of 52 strategies under 9 headings. The biggest
difference is that, action/implementation plan are not mentioned including
the absence of action agency in Indian policy though this is the core part in
Bangladesh ICT policy. As mentioned earlier, the Indian style is to address
these specific strategies with the combination of more flexible, goal oriented
and dynamic administrative guidelines and Act issuance in required fields.
There comparative effectiveness would be discussed in subsequent sections.
Policy Outcome
The impact of policy content (in detail) and policy process (in brief) in
achieving key and common objective would give a snapshot of the ICT policy
success I both countries. This paper will then investigate into the nature of
outcomes their possible relations with the policy contents and process.

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Growth of the Industry

After the IT sector was recognized by the government of India as a most
promising sector and eligible for special treatment by 1990s, a number of
business promotion and capacity building policy was undertaken. As a result
of these policy initiatives, Indian IT industry is a USD 100 Billion industry
(2011-12) with 80% of the revenues coming from exports. (National IT Policy
2012). Total export revenues earned by this sector have grown from USD 1.8
billion in 1997-98 to USD 46.3 billion in 2008-09. The domestic IT-BPO sector
increased growth from USD 1.4 Billion in 1997-98 to USD 12.4 billion in 200809. Through its unique value proposition, cost effectiveness, and maturing
service delivery steadily increasing its market share to over 50 per cent of
the global sourcing industry. Over the last 10 years, the technology and BPO
industry has been an engine of growth for the Indian economy. Between
1998 and 2008, it quadrupled its share of Indias GDP and exports to 4 per
cent and 16 per cent respectively. In addition, the industry has also had a
strong multiplier effect on national GDP and consumer spending by way of
capital expenditure, operating expenses and expenditure by the individuals
employed in the industry. It has offset close to 65 per cent of Indias
cumulative net oil imports, strengthening Indias foreign reserves. The
industry has enhanced Indias credibility as a business destination by forging
relationships with 75 per cent of Fortune 500 companies, generating
immense savings for customers (in 2008 alone, global sourcing savings for
customers amounted to an estimated USD 20 billion), and promoting a focus
on quality (65 per cent of all CMM Level 5 firms are based in India).
While in case of Bangladesh, the government was slower in realizing the role
of ICT as a special sector and recognized it only at the beginning of 2000s.
The overall size of the IT/ITeS industry in Bangladesh stood at ~250 million
USD in 2010. Global Technology research house, Gartner has included
Bangladesh in its list of top 30 outsourcing destination in its 2010 report.
Currently there are over 800 IT and Non-Voice ITeS companies in Bangladesh,
out of which around 200 work on a global basis for outsourcing and project
based delivery models. With no marketing or corporate backing, over 10,000
freelancers from Bangladesh have billed over USD 7 million over just 1 year.
In terms of manufacturing, the state owned TSIS started producing low cost
laptops in 2009 and some other mobile phone accessories. Another public
venture CSS started producing optical fiber cable and there is a growing
demand of their products. The telecommunication industry also observed a
huge growth in terms of subscriber acquisition and infrastructure
development, but most of these are the result of private sector initiative and
market demand, not under any particular public policy outcome.
If we compare the growth of the industry in the two countries, we see that
Indian firms were smarter and efficient enough to enter the global market
very fast, not just through their outsourcing business, but also attracting
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multinationals to set-up their back offices in India. At the same time, the
local manufacturing industry expanded rapidly in all sectors, from low end
accessories like mobile phones, chargers etc. to high end products like
personal computer, telecom radio equipments, IP servers etc. So, the ICT
policy in India has created more value and promoted the industry more
effectively than what has been observed in Bangladesh so far, even
considering the initial development phase.
Domestic Market & Demand Creation
In India, the domestic IT-BPO segment was estimated to aggregate revenues
of USD 9.5-10.5 Billion in 2010 due to the increased adoption of ICT by local
firms. The Government contributed significantly to this growth with budget
allocation of US$10 billion over 3 years for the National e-governance Plan
(NeGP). The increasing affluence of the Indian consumer and globalization of
Indian corporations will likely lead to increasing sophistication of domestic
demand in product diversity, delivery flexibility and service levels. These
trends will have significant impact in growing the size and scope of the
domestic addressable market. As Indian consumers and corporations rapidly
adopt mobile phones, internet access and broadband connectivity expand,
there is likely to be a significant increase in spend on IT hardware, software
and services. Teledensity increased 12-fold over the last 10 years. Internet
connectivity has also increased with availability of spectrum for 3G and
WiMax, increased use of technology and BPO outsourcing in Indian
companies, emergence of innovative business and service delivery models,
increased investment in technology and BPO by central and state
governments. So, including the expansion and development of ICT
manufacturing and service industry, the government undertaken policies
that created demand in the local market, ensured a certain market for the
manufacturers and also enhanced the capacity of the local public & private
agencies through the usage of ICT. Demand has been increased for both
hardware and also the software in the local market and promoting low cost
integrated service to the local corporates was the most successful strategy
of the government. A huge amount of these locally manufactured products
were consumed by the large government enterprise like telecom ministry
and defense ministry. The public procurement system was really a boost for
the growing ICT sector in India in last 10 years.
The government of Bangladesh also has undertaken measures through the
ICT policy which has resulted into increased demand of goods and services in
the local market. Thousands of lowest administrative units of the
government are provided with sharer access points for ICT services and
connectivity in last 5 years. 03 successful public projects have established egovernment process for delivering public services. Several public platforms
have been digitized in order to increase efficiency of the system. Most of the
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soft service and many hardware used in these projects have been
manufactured and procured locally, enhancing high demand for such product
and services. BASIS survey reveals that the PC and notebook computer sale
has propelled through last five years. But again, the public policy was not
very much effective in creating domestic market demand and business
opportunity for the local industry. The only positive sign is that the culture of
public procurement for as a source of creating domestic demand has just
been started.
So, beside the creation of highly demand elastic export industry, the best
success of Indian ICT policy was to create domestic market and promote the
demand through public procurement, infrastructure development and service
availability. But in Bangladesh, te policy so far failed to create any such
promising domestic demand specially considering economic return and new
business creation.
Capacity Building
In India, IT & ITES sector employs over 2.8 million skilled people (till 2012). It
has helped expand tertiary education significantly; the top seven states that
account for about 90 per cent of ICT industry have founded six to seven
times more colleges than have other states. Between 1994 and 2005, ICT
industry contributed up to 45 per cent of incremental urban jobs - including
direct and indirect employment. The ICT industry has set a precedent for
talent practices in India through diversity, inclusive job environment, global
career growth, and encouraged entrepreneurship. It has created career
opportunities for the youth in the country (70% of workforce is between the
age of 26 to 35 years). In addition, the focus has been on extensive training
and development (entry level training, support for tertiary education,
scholarships, sabbaticals etc.). Direct employment in the IT services and BPO
segment touched nearly 2.2 million by the end of FY2009. This also
translates to the creation of about 8 million indirect job opportunities
attributed to the growth of this sector in diverse fields such as commercial
and residential real estate, retail, hospitality and transportation, etc. The
industry oriented policy has enhanced the scope of the Indian IT institutes,
promoted high level and industry oriented research in these institutes. Not
only that, most of the Indian Institute of technologies are now affiliated with
world leaders in ICT, like IBM, Microsoft, Google etc. It has opened up the
source of dynamic capacity development platform for the ICT sector.
Only partially the success in Indian ICT sector in capacity building has been
followed in Bangladesh. Entrepreneurial promotion project and fellowship for
ICT research have been undertaken in 2013 and there is no concrete
outcome of such initiative yet. Though a number of public and private
universities have been producing quality graduates from last 2 decades, it
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was totally enacted by the education policy, not by the ICT policy. And also,
the ICT policy has not promoted university-industry relation that resulted into
almost negligible industry oriented solution from the educational institute
except BUET. As a result, the increased numbers of ICT graduate have not
been properly utilized in the local ICT industry to enhance industry
productivity.

Institutional Setting
The ICT policy in is implemented under the responsibility of Ministry of
Communication and IT. This ministry has 3 separate branches to look after 03
different sectors and the Department of Electronics and IT is given with the
duty of dealing with core ICT sector. Including all other ICT related tasks from
government point of view, this department specially discharges duties on
initiative on bridging the digital divide, promotion of standardization, testing
and quality in IT and standardization of procedure for IT application,
Electronics Export and Computer Software Promotion Council (ESC), National
Informatics Centre (NIC), initiatives for development of hardware/software
industry including knowledgebased enterprises and measures for promoting
IT exports and competitiveness of the industry. To coordinate the policy
initiatives and to practically guide the policy implementation, review and
adoption process, an ICT Task force is created with high authoritative power.
The task Force set strategies to augment the growth of the IT software and IT
enabled services sector and takes steps needed to accelerate domestic
demand for (i) Electronics Hardware products and (ii) IT & IT enabled
services. The reports from the task force are as strong as policy and their
recommendation is generally implemented through administrative orders or
Act revision.
Interestingly, Bangladesh has developed the similar type of institutional
framework. The Ministry of ICT is responsible for discharging similar type of
responsibilities. It also contains same authority and administrative power to
implement its plans and to recommend policy to government. Similar to
India, there is also an ICT Task Force with very high authority (Ministerial
level) to decide on any ICT related issue. But the key difference is that the
Task Force in India is consists of industry experts and produce reports and
recommendations through market analysis and systematic forecasting. While
the task Force in Bangladesh is more or less a routine one consists of
Ministers and bureaucrats and decides only on the agenda set by ministries.
This has made the task Force ineffective in delivering its supervisory role in
promoting countrys ICT industry unlike the Indian counterpart.
Analyzing Policy Contents
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In this section, the ICT Policy contents of the two countries would be
discussed and their strategy and success in achieving key goals would be
presented so that we can visualize the explanatory factors responsible for
the difference in outcome in our MSSD analysis.
Vision
The vision of Indian ICT Policy states its desire to make India a better ICT hub
for the global market and to enable ICT to contribute more in the national
economy. In case of Bangladesh, the policy vision is more pointed to
particular economic goals with a view to develop Bangladesh as a middleincome country by 2021 and as a developed country by within 30 years. The
Indian policy vision is broader is this case, but more practical based on
Indias present strength and position in global ICT market. For Bangladesh,
developing the country as a middle-income country by 2021 is a good one
considering policy best-practices. But step-in as a developed one in 30 years
is too lengthy and ambiguous statement which was better to be avoided.

Objective
The Bangladesh presented 10 objectives covering the equity, productivity,
integrity, productivity and research, employment generation, export
promotion,
healthcare,
universal
access,
disaster
management,
infrastructure development etc. It covers almost everything. In such sense, it
is a very ambitious objective setting as the country did not have any
previous success in addressing such wide range of area through a single
policy. Though particular action item and responsible agencies have been set
in the later part of the policy, this policy can be considered to be
overburdened with unrelated tasks and objective. For example, though the
objective of providing quality healthcare facility through the innovative usage
of ICT has been set in the policy, there was no particular R&D and any other
project undertaken in last 05 years to materialize this objective. The same
statement is applicable in case of the objective regarding the creation of
social equity through ICT. If we look into the Indian policy, they are also
covering wide range of areas including export industry promotion, capacity
building, human resource development in ICT, universal application of ICT in
social and economic field etc. Though these objectives covers various fields,
they are narrow enough to pin-point their target. For example, one of the
objective mention the target of yearly ICT export increment from 69 billion
USD at present to 200 billion USD by 2020. Another example is to create at
least 01 ICT educated personnel from each family. So, this type of more
targeted policy objective rationalizes the coverage of different fields. These
objectives also have coherence and interrelation in between to be addressed
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under a single policy. But in case of Bangladesh, the objective related to so

much different fields are not much pointed and there is lack of coherence
between them questioning the justification of putting them together in the
same policy.

Strategy
In terms of the strategic options, similarity is found in the organization of
strategies both in Bangladesh and Indian policy. Under each of the objective
headlines, both policy describe the detail scope of the objective and then
mentioned the policy action needed to be adopted in broader sense. The
unique difference is that in Indian ICT policy only the strategic options in
achieving different goals/objective are mentioned. No particular action plan
is mentioned or elaborated in the policy. Under the objective of creating
ecosystem for ICT driven service industry, 5 strategies are mentioned related
to developing new product & services using internet, delivering public
services through internet & mobile network, promoting innovative platform
to develop financial & location based service, using mobile platform for
secure financial transaction and promoting innovation & entrepreneurship in
mobile VAS platform. As mentioned earlier, in this case, the Indian style is to
address and materialize all these objective and strategic options through
flexible and more adjustable administrative guidelines and particular Act
formation. The guideline option provides best chance to change any policy
direction if it is found to be ineffective. As the line ministry need not to get
any high-order approval for such change, this type of measure is mostly
effective in dealing with the dynamics of ICT sector. Together with this, the
bold, financially involved and public resource related measures are
addressed through the formulation of Act from the recommendation of the
line ministry. These Acts presents clear and long term commitment of the
government towards the industrial development.
But in case of Bangladesh, the several elaborated action items are set under
each of the strategic option with specific responsibility to specific
public/private agency. For example, under the objective of increasing
productivity, total 5 strategic items have been mentioned in the policy
regarding ICT application in enhancing SME & agriculture productivity,
innovative usage of ICT in agriculture, encouraging ERP usage in large
enterprises, application of MIS in business operation and management and
promoting e-commerce and e-banking to support efficient business
procedures. The action items under each of these strategic items are the
most detail and core part of the policy nicely presented in tabular form for
easy understanding. That is why we have found the absence of
administrative guidelines related to industry support and demand
enhancement issued by the ICT ministry, except 2-3 guidelines which are
mainly connected to particular regulatory policy (not directly & effectively
supporting the industry).So, in terms of narrowing the focus to particular
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implementation plan, the ICT policy of Bangladesh is quite well-organized

and have almost all the elements of a successful policy. Even comparing with
that of idnia, the strategies are very effectively mentioned and elaborated in
an intellectual way to find the way to the goals. So, the cause of difference in
outcome of the policy actions between Bangladesh and India must be from
some other aspect.

Implementation Plan
The ICT policy of Bangladesh mentions detail implementation plan which are
total 306 in number. The section mentioning the implementation item is the
most attractive part of the Bangladesh ICT policy. The tabular form allows the
measures to be tracked down easily for any particular industrial or business
as aspect and to measure their success. These items are discussed under
standard headings below. All the action items are categorized into short-term
(to be implemented within 18 months), medium-term (18 months-5 years)
and long0-term (5-10 years). All these action items are eligible to get specific
financial allocation in the national budget through their line ministries. Also,
the responsible public agency would get special financial allocation to
operate the ICT tasks as mentioned in this policy. In addition, following the
best practices, the provision of a competitive allocation of funding for ICT
measures has been included in the policy.

Domestic ICT Industry Promotion

The policy suggested the creation of a separate author to promote ICT
industry, to develop a special fund to promote ICT initiatives in private
sector, special low interest loan for start-ups, space allocation for private
sector at low cost to operate ICT business, quota for local ICT industry in
case of public procurement and also private procurement, ICT
entrepreneurship development fund formation, promotion of local brand in
global market, providing working capital for software and ITES sector,
venture-capital fund development etc. as the direct measure to promote
local industry. In addition tax exception of ICT companies, lowering custom
duty for ICT equipment, VAT exception from ICT services, tax exemption for
locally developed software and funding for ICT based resources have been
included as the indirect measure to develop the local market in Bangladesh.
Though it seems that a number of measures have been taken to boost the
industrial productivity, this is the weakest portion of the policy which is also
clear from the policy outcome through the last 4 years. As per the policy
recommendation, special funds have been created to promote ICT business
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and industry and High-tech park authority is also now in place, there is no
apparent new stream of venture or companies emerged from such support.
Due to the benefit provided to the software industry, outsourcing industry
increased it export to a good extent, but as it was not supported by the hardware development, such increment has not created any significant impact in
the economy. But the positive sign is that the culture has been at least
started through the quota for local industrial product in public procurement
and also in case of private procurement. This action has encouraged the
government owned companies to produce laptop, optical fiber cable and
some ICT accessories. But except 2 PC/laptop assembly ventures, there is no
exceptional success in hard-product development though there are a number
of success in soft-product industry. The financial schemes for the industry
have been used just as a routine support from the government and have not
been used to create any new product or to enhance capability.
The example can be placed from the Indian experience. Through the Policy
Resolution for setting up of Information Technology Investment Regions,
excellent infrastructure is developed in suitable regions and local companies
reap the benefits of co-siting, networking and greater efficiency through use
of common infrastructure and support services. Another one is that, the
Government has brought down the total taxation level on electronics
hardware. Electronics and IT Hardware manufacturing has been identified as
a thrust sector for Special Focus initiatives in the Foreign Trade Policy, as a
result of which expeditious clearance of approvals required from DGFT is
ensured, exporters/Associations are entitled to utilize Market Access Initiative
(MAI) & Market Development Assistance (MDA) Schemes is adopted for
promoting Electronics and IT Hardware Manufacturing Industry exports.
These support and successful steps for hard-products have been hugely
supplementing the strong software industry and gradually has put Indian in a
leading role in global market.

Enhancing Productivity of other industries using ICT

Though the policy mention to promote productivity in other sectors though
the innovative usage of ICT, the implementation plans only focus to the
public service delivery, not promoting ICT in other sectors. As a result, the
traditional strong domestic industries like garments, pharmaceuticals, shipbreaking & building etc. have not observed any significant growth from
public ICT promotion measures. The careful analysis of the world best
practices shows that one of the best ways of promoting productivity in ICT
industry is to promote its application in other sector to ensure an integrated
development. In case of India, they have strongly focused on the high-end
usage of ICT in defense and space technologies as well as in their traditional
industries like coal, mining and garment industry.

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In addition to this weakness, very high provision of involving public officials

in industry promotion activities created the opportunity of public fund-misuse
and biased decision making.

Demand Creation
Many of the 306 action items are related to create demand for ICT products
and services in the public and the private sector and this policy so far can be
considered successful in this respect. It addressed the demand issue in
national, sub-national and regional level. Both the public and private sect
demand aspects are covered through different provision of the action items.
The public procurement system, countrywide e-governance project
implementation, countrywide telecommunication network development, tariff
reduction for ICT services, ICT application in public educational institutes and
healthcare facilities, adoption of ICT in public service delivery system etc.
have been designed in detail through almost 100 of implementation item.
But the encouraging fact is that, most of these have been included in the
short-term action items and have already been addressed through proper
budget allocation in the last 4 years. Despite the immature and partial
growth in the supply side, development in the demand side has been very
high showing a partial success of the policy.
If we observe the implementation schedule of this type of policy action,
thousands of lower administrative units have been set-up with shared ICT
service center, development of intra-net between all public offices and
ministries, e-tendering process introduction, digitalization of employee
recruitment process, online based admission process of several universities,
mobile application for transportation services, using mobile platform for
public purchase order, mobile banking & e-commerce introduction etc. all
have been implemented under this particular policy and most of them are so
far successful. Being a disaster prone country, introduction of ICT services
and mobile platform for early warning and evacuation process has been
regarded as a huge success in last couple of years.

Capacity Building
After demand creation, the policy focused mostly on capacity development.
It addressed the capacity issue of the industry personnel, ICT students,
SMEs, technical aspect, business aspect, market promotion and management
aspects etc. The policy has set priority in developing internship project for
ICT graduates,
joint-venture R&D project at universities, professional
development program, technology transfer with the help of non-resident
Bangladeshis, searching for new markets through international exhibitions,
higher public investment in bio-ICT projects, updating ICT related curriculum
in secondary & tertiary educational institutes, making ICT compulsory in
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elementary and secondary schools, low cost internet connectivity to all

schools, ICT teachers recruitment in schools, developing capacity of public
officials in ICT, encouraging industry to conduct R&D in universities etc.
Within all these initiatives, the connecting school projects, ICT teacher
recruitment projects and ICT awareness development for public officials have
been implemented with success. But the worst failure of this policy is in
enhancing industrial capacity to increase productivity and in promoting ICT
industry oriented R&D and innovation platform. Also this policy failed to
address the issue of underperformance of public R&D institutes and has not
created any venture that brings the universities and industry together. Due
to this failure, the success in the lower level educational success has been
shadowed and the industry could not found any benefit from these
initiatives. Another failure is to create any integrated research platform
where the local ICT experts can develop customized solutions for the local
industries. The policy also has not addressed the in-house R&D of the ICT
firms.
Contrary The Indian policy directly promoted startups focused on technology
and innovation and a weighted deduction of 150% of expenditure incurred on
in-house R&D. In addition to the scheme for funding R&D projects, 2 key
schemes: Support International Patent Protection in Electronics & IT (SIP-EIT)
and Multiplier Grants Scheme (MGS) have been adopted to promote and
enhance the ICT industrial competitiveness through extensive and industry
oriented research activities. The promotion of collaboration between Indian
Institutes of technologies (IIT) and ICT world leaders including several
domestic firms is another example for Bangladesh to follow in enhancing
industrial capacity.

Policy review process

The biggest loophole found in the ICT policy of Bangladesh is in its evaluation
process. Section-3 of the said policy mentions that ICT Minister would followup the implementation process of the policy. The actions items would be
reviewed every year and their implementation phase would be determined.
The strategic items would be reviewed every 3 years time and the whole
policy would be reviewed in 06 years. As the ICT ministry is only responsible
for implementing parts of the action items, it is not possible for them to
review the advancement of other public agencies projects in administrative
way. So, in effect, the agency responsible for implementing particular action
item is reviewing its own actions and their evaluation is regarded and
included in the government hierarchy. So, there is no neutral/third party
evaluation of the implemented action items of the policy outcomes. Also, as
evident from best practices, it is not effective to measure the policy
outcomes by the responsible agency for implementing the policy or by the
agency/body with similar/lower authority. Rather a superior administrative
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body should be responsible to analyze the success and effectiveness of the

policy in detail with industry expertise and should be able to change the
course in case of any particular failure. This type of dynamic evaluation is
more appropriate for the sector of ICT. Thats why India has provide the
responsibility of such policy review process to the ICT Task Force which has
all the authority to change the course and way of policy implementation after
measuring its success. But in case of Bangladesh, such responsibility is not
given to the ICT Task Force and even this body does not have enough
expertise to perform such duty efficiently.
Strengths & Weaknesses of the Policy
Through the comparison with Indian ICT policy, the following facts have been
found regarding the ICT Policy 2009 of Bangladesh:
1. The policy created moderate public and private sector demand for ICT
goods and services in last 4 years.
2. Materialization of e-governance projects with view of this policy is
successfully implemented. This is one of the success stories of this policy.
3. Funding mechanisms under this policy have failed to attract any new
venture or to promote innovation and diversification within the existing
firms.
4. Adoption of I CT to deliver public services opened up opportunity for
industry to look into new revenue stream and business
5. Export promotion measures for soft-products have been effective and
helped to expand firms globally with outsourcing service
6. Internal capacity of the ICT firms has not developed much under the
policy initiatives.
7. Government failed to promote promising hard-ware industry through this
policy in spite of the possibility of big market and demand.
8. Proper policy evaluation procedure is absent making the policy
implementation process vulnerable to create long term negative impact.
9. Funding mechanism of the policy is heavily dependent on public finance.
10. Budget allocation for particular action item through national budget is
an effective action to ensure proper implementation of the policy.
11. Additional source of funding or any incentive based criteria is absent to
lure private companies to compete for public fund.
12. Measures to ignite new ventures are weakly and ineffectively organized
in the policy.
13. The policy has not set-up any platform to bring in universities and
industries to promote suitable research and innovation for industrial
capacity enhancement and for human resource development.
14. Plan to help any promising ICT firm directly is totally absent in this
policy.

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15. Though the policy mentions it, but it failed to enhance technology
transfer to the local firms from multinational operating in the country.
16. The evolution or turning points of the policy has not been identified or
set which could make it more implementable, adjustable and effective.
17. Capacity development of the industry has not been addressed
effectively.
18. The policy failed to promote I CT to enhance productivity in other
domestic industries.
19. There is no region oriented development plan. Most of the policy
measures are centered within the capital based industry.
20. Lack of financial and administrative power of the local government
resulted into the failure of the policy objective to bring in more equity in
the society through ICT.
Recommendations
Based on the above study and comparative analysis of the ICT policy of Bangladesh, the
following specific provisions are recommended to make the policy more effective:
1. ICT Task force should be given the responsibility to review the policy implementation
process. The task Force should include expert from the industry.
2. Competition based strong financial package should be awarded to ICT companies to develop
new products and services. Performance based subsidy and nurturing should be attached with
such direct financial support.
3. All the public engineering universities should be set-up with high quality lab facilities and
specific public funding should be disbursed to promote industry oriented research in these
labs. The funding should be awarded on competency basis.
4. Local governments should be empowering with more administrative and financial power to
promote regional ICT firms and regional innovation. At least the 07 Divisions should be able
to undertake ICT industrial initiatives to certain extent. It will better address local needs and
would ensure better supply system
5. Large scale public-private venture should be taken to develop the highly promising ICT
hardware industry in the country. This type of labour intensive industry would utilize the
countrys competitive advantage and would be a supplementary factor to the growth of
software industry. Proper incentive should be placed to ensure the efficient outcome of such
financial support to enterprises, for example, export target fixation etc.
6. University-Industry research initiatives primarily should be integrated and funded through
the public procurement, at least partially. The huge demand for the public sector and their
specific budget allocation are positive input for such action.
7. Technology transfer should be promoted by hiring NBR ICT experts by involving them in
public projects with due remuneration.
8. Expert body under the ICT Task Force should be created to analyze market potential and for
exploring new markets with members from industry.
9. The developed ICT cluster, i.e. High-Tech Park should be given with financial capacity to
promote innovative venture business and for start-ups.
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10. Creation of dynamic capacity of the industry should be promoted through continuing tax
exemptions and more strategic import-duty policy on soft-ware and hard-ware based on the
Expert Body recommendation.
11. In addition to the simultaneous action plans, sequential capacity building should be promoted
through: 1. Promotion of learning by using and by imitating technologies, 2. Assimilating
foreign technology through learning and by designing, and 3. Promotion of Independent
design and diversification of products.

Conclusion
This study analyzed different aspects of the ICT Policy 2009 of Bangladesh.
Though the policy organization shows that it has been developed with the
supervision of experts to address most of the issues, some weakness in
terms of policy content and implementation procedure has been found.
Based on the experience of closest neighbor India and world best practices in
ICT development, some provisions are suggested to be added in the policy
contents to make it more effective. This paper is organized in a way to be a
good input to the decision making system of ICT policy in Bangladesh. The
findings suggests that, if the Bangladesh government reviews the policy
evaluation process, can enhance the industrial capacity to increase
productivity and can promote the development of hard-ware industry, all
other aspects and initiatives would turn this policy to be the best policy
measure in the history of Bangladesh.
References
1. ICT
Policy
2012,
Bangladesh.
Retrieved
from
http://www.moict.gov.bd/ict-policy-acts.html.
2. National
ICT
Policy
2012,
India.
Retrieved
from
http://deity.gov.in/content/acts-policies
3. Several administrative guidelines issued by Ministry of Communication
& IT of India. http://deity.gov.in/content/acts-policies.
4. ICT Task Force Report of India. http://deity.gov.in/content/acts-policies.
5. KPMG report on Bangladesh outsourcing (Bangladesh Beckons - An
emerging destination for IT/ITeS outsourcing). Retrieved from
http://www.basis.org.bd/resource/KPMG-Bangladesh-January-2012.pdf.
6. Several evaluation and annual report of Access To information Program,
Prime
Ministers
Office,
Bangladesh.
Retrieved
from
http://www.a2i.pmo.gov.bd/resource-documents/Reports.

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7. Different journal paper and book chapters used in the Comparative

Analysis on Science, Technology and Innovation Policy including the lecture notes
provided by Professor Intarakumnerd Patarapong, GRIPS.

Appendix-1
Abbreviation
ICT- Information and Communication Technology
IT- Information Technology
ITES- Information Technology Enabled Service
NeGP- Nationwide e-Government Project
VAS- Value Added Service
VAT- value Added Tax
NBR- Non-resident Bangladeshi
WiMAX- Wireless Broadband Internet Technology

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