An online platform-based economy has huge potential of generating employment in Bangladesh if adequate digital infrastructure is built and proper policy intervention is made, said experts yesterday.
The pandemic has pushed many services onto digital platforms and the associated economy had already been growing for quite some time.
“A big portion of the unemployed can get jobs in the sector if we can create skilled human resources,” said Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD).
“One-third of tertiary education degree holders are unemployed in the country and they have so much opportunity in the digital economy,” he said.
He said digital platforms bore enormous opportunities at both local and foreign markets.
The annual export of digital products and services now stands at $1 billion, which can be taken to $5 billion as neighbouring India exported $145 billion-worth digital products, software and services in 2020, he added.
“The digital platform-based economy will make our economy more competitive, increasing productivity and reducing lead time with automation,” he added.
Rahman said the government should act to protect the rights of workers in the digital platforms as well as consumers’ rights.
He was speaking at a virtual event on “Digital Platform Economy in Bangladesh” organised by the CPD and Friedrich-Ebert-Stiftung (FES) Bangladesh Office.
The onslaught of the fourth industrial revolution is tremendous and it will change the way of life overwhelmingly, Fahmida Khatun, executive director of the CPD.
“Technologies such as artificial intelligence, machine learning, internet of things are changing the way we live, take services and work,” she said.
She said digitalisation had also significantly impacted the labour market, with less tech efficient people losing jobs, and many jobs would turn redundant as technology would enable accomplishing many things in many areas.
“On the other hand, there will be many new areas for jobs and with skilled human resources and regulatory framework, Bangladesh can maximise the benefits from the changing labour market,” she added.
“We have to be prepared to take advantage of the benefits of the Fourth Industrial Revolution. We can benefit from this sector by providing incentives and creating policies. Digital platforms are playing an important role in entrepreneurship and consumer growth as well as job creation,” she said.
The CPD recently concluded an exploratory study on the online platform-based economy in context of Bangladesh. Syed Yusuf Saadat, senior research associate of the think tank, gave a keynote presentation on the study.
He said Bangladesh now accounts for 16 per cent of the world’s online labour market, and was now the world’s second largest online labour supplier.
At present, there are 2,000 web-based entrepreneurs in Bangladesh and about 50,000 Facebook-based entrepreneurs.
“Online-based business opportunities through digital platforms have increased, especially in the context of the ongoing pandemic. The digital platform is expected to create around five lakh jobs in the next one year,” said Saadat.
According to the study, although a lot of mobile applications are coming into the market due to increasing internet coverage and popularity of smartphones, no proper policy has been formulated on those apps yet.
It said although the concept of the digital platform economy was new in Bangladesh, it was gradually gaining confidence and spreading rapidly among the new generation.
To enhance their credibility and acceptability, many digital platforms need improvements in their strategic approach and customer services.
The study recommends ensuring product quality, timely delivery of services, efficient management of inventory, flexible return policy and overall transparency, all of which would result in greater growth of the digital platform economy in Bangladesh.
According to the study, the ridesharing business in Bangladesh has grown significantly, amassing $260 million in the digital platform economy with 6 million rides availed each month.
A study has estimated that the size of the ridesharing market of Dhaka city would be around Tk 2,200 crore a year.
Citing data of the e-Commerce Association of Bangladesh, it said online payments in Bangladesh have increased from Tk 168 crore in 2016 to Tk 1,978 crore in 2019.
Online payment is projected to reach Tk 4,000 crore due to the surge in online transactions during the Covid-19 pandemic, it added.
Due to its low cost labour, Bangladesh has been deemed as the next big IT outsourcing destination in the world, according to the study.
Felix Kolbitz, resident representative of the FES, said the digital platform-based economy was a promising sector.
He said research and discussions involving stakeholders would help create a favourable environment for the expansion of this new sector.
Farhana A Rahman, senior vice president at the Bangladesh Association of Software and Information Services, said adequate policy support was needed to facilitate remittance inflow from this sector, especially in freelancing.
She also emphasised on the need to use domestic platforms to expand the local market.
Hussain M Elius, CEO of Pathao, highlighted a lack of skilled manpower having high quality technical knowledge.
lmul Haque Sajib, co-founder of Sheba.xyz, Fahim Uddin Shuvo, founder & CEO, Garbageman; Fahad Ifaz, co-founder and CEO, iFarmer; and Mohammad Abdul Matin Emon, CEO of Doctorola, also spoke.