The promising software industry now teetering | The Daily Star
12:00 AM, April 07, 2020 / LAST MODIFIED: 12:00 AM, April 07, 2020

The promising software industry now teetering

Just a few months ago, Skylark Soft, a software development company for technology used in the garment industry, maintained accounts with 50 top factories.

Today, it does not have any work on hand as apparel manufacturers shuttered their operations amid fears of coronavirus contagion, in a demonstration of the all-encompassing devastation that is being caused by the virus outbreak from Wuhan, China.

"The situation has gone from bad to worse," said BM Sharif, chief executive officer and managing director of Skylark Soft, which has about 35 employees.

Since January, the company did not get even regular maintenance orders, as the apparel manufacturers started taking stock of the impending damages.

If the current situation prevails, the other companies like Skylark Soft will also find it difficult to pay their employees regularly, he added.

The managing director's words ring true though as the continued progress of Bangladesh's software and information services industry has almost completely come to a halt.

The country's software industry has taken a massive hit at both the local and international markets due to the coronavirus fallout, according to the Bangladesh Association of Software and Information Services (BASIS).

The overall toll the virus has had on the industry is no less than 70 per cent of its total value, said BASIS President Syed Almas Kabir.

"Now, the software industry is facing the biggest possible challenge for its survival. Without government support, it will be tough to return to the normal pace," he added.

About 175 software companies are plying in the international market. However, 74 per cent of the foreign buyers stopped placing orders in the last three months.

The two major export destinations for Bangladeshi software are the US and Europe, which are now being overwhelmed by the virus outbreak.

More than 600 companies actively operate in the domestic market. However, even the local demand will crash 60 per cent in the next three months, according to Mushfiqur Rahman, a BASIS vice president.

The government is the main buyer of locally developed software.

"Traditionally, the last three months of a fiscal year is the prime time to purchase ICT services for the public sector. But we are seeing the hit coming already," said Rahman, also a managing partner of Spectrum Software and Consulting, a leading software developer.

Subsequently, BASIS is requesting the government to continue to provide tenders such that the software engineers can work while sitting at home, he added.

"The current situation is ever changing. It is frightening to think that in the next few months, a large number of software companies may shut down," said Rupayan Chowdhury, group CEO and co-founder at Synesis IT, a top listed software company.

The industry's domestic market size is not worth less than Tk 10,000 crore annually, while about two lakh skilled employees are vested in the sector.

Besides, if the government wants to continue its countrywide digitisation plans, the policymakers need to do something for the industry, Chowdhury said.

The government could even go as far as to instruct leading companies to outsource 30 to 40 per cent of large orders to smaller companies to ensure their survival.

For more sophisticated projects, the foreign companies could be told to establish joint ventures with local firms as well, Chowdhury added.

To help the industry overcome the crisis, the BASIS has sought Tk 660 crore in aid from the government for the next six months.

Expenses from April to September are estimated to run up to Tk 1,000 crore for the 1,400 BASIS member companies and the government grant will be used to supplement staff salaries and office rent.

BASIS also sought a Tk 500-crore loan accompanied by concessions at 2 per cent interest as a part of a 'business continuity plan'.

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