PROGRESS AND PROSPECT OF FREELANCING BUSINESS IN BANGLADESH

ACKNOWLEDGEMENTS

We are grateful to Mr. Foysal Ahmed , trainer in DIIT; my friend Ashish,IT expert of freelancing companyAlgonyx; Koushik Ahmed, Blogger Bangladesh; Tomal Anower, blogger of BlogKori for all the help and guidance given for this report. We would also like to thank some blogger and admin of some Facebook pages.

TABLE OF CONTENTS

Acknowledgement

Table of contents

Abstract

1.Introduction

1.1 Purpose

1.2 History

1.3 Scope

1.4 Methodology

2.  Progress of freelancing business in Bangladesh

2.3 Present scenario

2.2 Emerging business area

2.1 Freelancing fields

3. Prospect of freelancing business in Bangladesh

3.1 Dhaka ranks third in global freelance outsourcing work

3.2 Expert’s estimation

3.3 Comparison to neighbouring countries

3.4 Fast growth rate prospects high

4. Hindrances of freelancing business in Bangladesh

4.3 Money transaction problem

4.2 Low internet speed

4.1 Power crisis

5. Conclusion

6. Recommendation

Glossary

Appendixes

References

ABSTRACT

Spread out of internet network changes the way of work throughout the world. Now employers search for low cost employee in internet to do the job done. For  the whole process, a market place is needed for hiring employee, posting job, biding, paying and complete the whole process without any hassles. This need of a common market place give birth a business sector named freelancing business  where freelancers work according to their skill, efficiency and will. Searching for low cost employee makes Bangladesh an emerging participant in the sector.  The sector is not well established yet in Bangladesh but has enough potentiality and a rocket like growth graph. Hindrances are not also in less number. Power scarcity, low speed of internet, unavailable skilled people are some of difficulties on the way of a successful freelancing business. Solving the problems and pay heed to it by authority may result a new arena of business to start with low invest and huge potentiality that led to effect national economy dynamically.

1. Introduction

With the rapid progress of internet , freelancing business is becoming popular worldwide day by day. Boost up of freelancing business is occurred for a rapid increase of freelancer [1.1]  and the number of freelancer is increasing for an intention of finding low cost employee to do the job done. Consequently market place is must where employers can hire employee and all others work can be completed.

1.1 Purpose

Thus, with a huge potentiality, the matter of freelancing business comes in business arena and the name of Bangladesh emerges for mainly low cost. This report will briefly show the present and future of this arena.

1.2 History

History of freelancing  business in Bangladesh is not very old.  It has become popular for three to four  years. But the concept of freelancing  business in the world is not new at all. With the world gripped by a global downturn small businesses are clamoring to cut costs and increase profitability to stay afloat. Enter, the freelance marketplace. Freelance Marketplaces are not a new concept, the first marketplace was launched in 1998 and dozens have come and gone since [3.1] . Freelance workers are often represented by a company or an agency that resells their labor and that of others to its clients with or without project management and labor contributed by its regular employees. Others are completely independent. “independent contractor” would be the term used in a higher register of English [3.2] . ‘GURU’ the first online freelancing or outsourcing marketplace was established in 1998 as SOFTmoonlighter.com [3.10] . GURU was followed by Elance, RentAcoder.com, Odesk, GetAFreelancer.com, Freelancer.com, Limeexchange.com, People Per Hour etc. rapidly. Some agencies like varsityadmission.com, hostinghelp24.com, opensourcenetwork  organize seminar and workshop to make freelancing popular. Before that freelancing work and business were in a limited format [3.3].

1.3 Scope

Many statistics, media analysis, experts’ logic shows a strong potentiality in Bangladesh freelancing arena. Hindrances are not very few to achieve the goal. Proper steps are suggested by the experts to boost the business. The site could bring huge foreign currency to the agencies as well as to remote jobless youth through investing a small sum of money for buying a computer with internet connection.

1.4 Methodology

The report encompasses the present situation, progress, prospect, hindrances of freelancing business in Bangladesh. The report is illustrated with data, pictures, charts, interviews, newspaper article etc.

2. Progress of Freelancing Business in Bangladesh

The internet has opened up many freelance opportunities, expanded available markets, and has contributed to service sector growth in many countries like Bangladesh. Offshore freelancing [1.2], online freelancing [1.3]  and crowdsourcing [1.4]  are heavily reliant on the Internet to provide economical access to remote workers, and frequently leverage technology to manage workflow to and from the employer. Much of the computer freelance work is being outsourced to poorer countries outside the United States and Europe. This has spurred conflict because American and European workers are not receiving the benefits. The compromise has led to student freelancers who now provide a steady source of cheap labor while keeping jobs American and European [3.2].

2.1 Freelancing fields

Fields where freelancing is common include; music, journalism, publishing, screenwriting, filmmaking, acting, photojournalism, cosmetics, editing, event planning, event management, copy editing, proofreading , indexing, copywriting, computer programming, web designing , graphic designing, web development, consulting, tour guiding, video editing, video production and translating. The global off-shore outsourcing landscape is being steadily reshaped as new alternative sourcing options are emerging. Bangladesh is one of these emerging new centres. In 2010, Gartner Inc. has included Bangladesh at the list of top 30 offshore destinations [3.4]. After this report, the tycoon of this sector began to come in Bangladesh to flourish the sector and young innovators of the country started with a fresh attention.

2.2 Emerging business area

Dawn.com/business,8th June 2010, published a report regarding freelancing growth in Bangladesh. The report developed with a story of a teenage boy named Al Zahid. Like many teenagers, Abdullah Al Zahid spends most of his time holed up in his bedroom in his family’s modest Dhaka apartment glued to his computer.But Zahid, 16, is not checking Facebook or chatting to friends – he’s working as a freelance web developer, part of a new wave of young, tech-savvy Bangladeshis who are transforming their country’s nascent outsourcing sector.“There is so much demand for outsourcing, I am struggling to cope. I have to turn down many, many job offers,” said Zahid, who earns around $1,000 a month from several outsourcing contracts and is his family’s main breadwinner.“Many of my friends are interested in this work. I hope to set up my own office one day and hire other people like me to do more outsourcing,” said Zahid, who is still at school and wants to go on to university [3.5].

The Bangladesh Association of Software and Information Services (BASIS) estimates there are some 15,000 freelancers like Zahid in Bangladesh doing freelance  work for technology companies from across the globe. The country also has some 500 registered IT outsourcing companies which collectively employ an additional 20,000 workers [3.6]. Freelancers in Bangladesh today are earning thousands of dollars from the comfort of their own homes. Faisal Farrukh, a Dhaka-based freelancer looked to freelancing simply to explore and develop his own creativity. Today, he is providing back-end support, virtual assistance-ship and content development to numerous foreign companies, and now, it is more than just a hobby for him. With the amount money he makes, why would he need a nine-to-five job? “There are numerous companies out there in need of labour at low cost and less time”, he says, “These companies or ‘contractors’ , who, maybe, are short of time to look for a real assistant, may prefer to employ a virtual assistant who can manage their workload for them within the stipulated time. This is where freelancers come in. Still others may need freelance writers (or content developers) to write up a press-release for them. The possibilities are unlimited”[3.7].

2.3 Present scenario

At present, the sector is also focused by media as some enthusiastic matters are happening by young people even living in remote areas. The Daily Prothom Alo published such a report on 4th February,2012 [2.2] . In it, story of Russel’s success is described. Currently about 10,000 freelance software developers in the country are earning roughly $40 million annually.  Growth rate of the industry has been around 40% for last few years [3.8].

For most cases, the earning of the companies is dependant largely on foreign work. Freelancers or group of freelancers also work in foreign companies. Maximum firms are originated in Bangladesh, their major source of revenue for most of the firms (65%) is abroad. The reason is that Bangladeshi web developer firms are actively involved in getting offshore projects. Once a firm gets going, it does not have to depend on local market anymore.

Only 20% firms generate majority of their revenue from local sales indicate the immature web industry and culture here in Bangladesh. Otherwise, there is no reason why firms cannot succeed in the local market whereas they are highly successful dealing globally. However, the demand of web technology is increasing rapidly in the country.
Earning from website ads are possible only when there are large number of users to follow. It is the most difficult among the three revenue-generating ways and 15% of the firms here depends on advertisement-driven returns.  However, it points out that Bangladeshi firms have also started to join the global trend of website-generated income that is, earning from showing ads in websites.

Source: http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

What factors influence international clients while outsourcing projects from Bangladeshi firms. 15 firms report that it is the previous work experience and references that influence most. Maintaining constant communication with the buyer is rated to be a factor by 9 firms. However, Bangladesh Government’s policy is not taken into count by the buyers .

Source : http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

None of the firms have said that they are in loss.
Significantly, there are no dominating segments in the pie chart; that shows that the profit margin of firms are varying widely ranging from profit under TK 15,000 to profit over TK 100,000. Anyway, 20% firms say that their profit has been very inconsistent .

Source : http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

3. Prospect of Freelancing Business in Bangladesh

The global market condition, Bangladesh’s potentiality, large number of educated youth, low value of Taka, lower labour cost brings a hope for Bangladeshi freelancer and freelancing business companies[2.1]. The global market for Outsourcing and Offshoring has recorded an increasing trend in the use of these models.

3.1 Dhaka ranks third in global freelance outsourcing work

Dhaka has become one of the top destinations for freelance online work, outshining Indian cities such as Bangalore, as the Bangladeshi capital fast emerging as a major centre for data entry work that employs tens of thousands of people.According to a new report by oDesk Corp, a United States-based leading marketplace for companies and online workers, Dhaka is now ranked third among global cities where online jobs are outsourced from the West[3.14]. The Amsterdam-based KPMG in a survey report placed Bangladesh with Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam, along with India on the list of emerging Asian IT services suppliers[total report in appendix 2.3].

3.2 Expert’s estimation

Experts have calculated that the Offshoring-business will grow from the current annual rate of 80 Million US-Dollars to a level of over 500 Million US-Dollars in 2020, representing a six-fold increase in 12 years. Particularly in Online Offshoring, experts have predicted a great amount of growth in the future. The Duke University has judged that in 2008 over 50 percent of US companies were involved in Offshoring. This represents a doubling of the amount in 2005. The prognosis therefore is, that the importance and revenue of small and medium-sized businesses will surely grow. According to a study from SpiceNetworks, eight percent of small and medium-sized businesses globally will increase their involvement with external IT-Service Providers.

Source : http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

Since the 1980s, India has emerged as one of the main providers of Online Services Offshoring. But in India, the wage and housing costs are rising rapidly. Therefore, experts expect the diversification of Online Offshoring countries in the future. In essence, any country that possesses the necessary infrastructure and skilled workforce can expect a growth in Online Offshoring into this country.

3.3 Comparison to neighbouring countries

Compared to neighbouring India, which accounts for around 55 per cent of the $3.4 trillion global market and employs 2.54 million people directly in the sector, Bangladesh is an outsourcing minnow.But as outsourcing costs rise in other countries like India, China and the Philippines, impoverished Bangladesh, currently better known for cheap garment exports for top Western brands, may be able to cash in .

Source: http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

“New companies are approaching with new orders now and that’s what we need to boost the industry as global IT spending is expected to rise over the next few years,” BASIS president Mahboob Zaman told AFP.

“We are just getting entry into the global industry but we have real potential,” he said, adding that Bangladesh’s low cost labour pool was a key competitive advantage.

The average wage of an outsourced IT sector employee is around $8 per hour in Bangladesh compared to $20 per hour in India and $10 to $15 an hour in the Philippines.”Moreover, Bangladesh has one of the largest and youngest populations in Asia, with 150 million people of whom some 65 per cent are under 25”, Zaman said.

3.4 Fast growth rate prospects high

Bangladesh began developing an outsourcing sector in 2004 and it is now worth around $120 million. The country exported some $36 million worth of IT services last year, according to BASIS figures.The government has declared developing the IT outsourcing industry to be a key priority, which fits with their ongoing campaign to create a ‘Digital Bangladesh’ by 2020. For BASIS president Zaman, Bangladesh should aim for its outsourcing service industry to export $500 million worth of services by 2014, a goal he said was within reach.“Two decades ago, many people could not imagine Bangladesh’s garment industry would become the country’s highest export earner – but it did. I believe the outsourcing industry has the same potential,” Zaman said.

Bangladesh’s garment industry accounts for 80 per cent of the country’s $16-billion-plus of export earnings and employs over three million workers, mostly women.The country’s biggest advantage in terms of outsourcing, Zaman said, is its people – particularly the younger tech-savvy generation who are already helping the sector to take off without any government support.“Young men like Zahid (the freelance web developer) adapt to new technologies quickly and it is going to be them who will drive the outsourcing industry forward,” he said.

For many, the idea seems far-fetched. The idea of something so simple and easy is sometimes difficult to digest. Many believe that one has to be super-qualified for this. However, there are a multitude of projects, which do not always require a Computer Science graduate. Shahriar Jahan, who was awarded as a freelancer at the recently concluded BASIS SoftExpo, began freelancing doing data entry jobs, but is now expanding his horizon by taking up other projects like web research, marketing and search engine optimization. He urges beginners to not use these projects for testing. “Unless you are sure you are up for it and have the time for it, you should not promise your services. Since, these are real companies, with real needs. Doing so can cause them a lot of hassle”.

4. Hindrances of Freelancing Business in Bangladesh

But there are major challenges which must be addressed before the industry can flourish: Gartner gave Bangladesh a “poor” rating in three vital areas – infrastructure, language skills and data, and intellectual property security.

Poor infrastructure, including frequent power crises and slow and unreliable Internet connections are the most immediate problems for Ahmadul Hoq, president of the Bangladesh Association of Call Centre and Outsourcing (BACCO).“We have told the government that we need an uninterrupted power supply and a second connection with high bandwidth,” Hoq told AFP, adding that progress on these issues was slow.

 

4.1 Power crisis

Bangladesh’s businesses have long suffered from an acute power crisis, as plants generate only around 5,000 megawatts of electricity a day, but demand is over 6,000 megawatts and growing at a rate of 500 megawatts a year.

 

4.2 Low internet speed

The country has only one submarine Internet cable and desperately needs a second line to prevent frequent disruptions, Hoq said.“We are connected to submarine cable network SEA-ME-WE-4, which provides an Internet bandwidth of 24 gigabytes, but more speed needed and an alternative connection is essential to woo overseas clients,” Hoq said. 40% of the businesses are significantly affected by slow internet speed here in Bangladesh. Web developer and software developer firms encounter this problem more often than the others.
However, companies seem to cope up with the situation and 60% companies have reported that they somehow manage it, although the working speed gets sluggish .

Source : http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

4.3 Money transaction problem

Bangladesh Government does not allow online transaction yet. Without any confusion what-so-ever, Bangladeshi web-based businesses have indicated it as the biggest problem they face. Almost all the respondents are affected by this obstacle while dealing internationally.

Source: http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

The biggest obstacle to run the freelancing business, again majority of the firms have indicated international money transaction difficulty as the most upsetting one.

Source:  http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/outsourcing-companies/index.html

5. Conclusion

Though Bangladesh is new in the freelancing business area  but has huge potentiality. Becoming popular for four  to five years, this sector is enough strong now to draw the attention of tycoons of this sector throughout the world. But still this sector has some hindrances to overcome. If the government and the authority pay their concern to this sector, experts say, it will be an another potential business sector like readymade garments within six to ten years.

6. Recommendation

  • Second submarine cable line should be set up as early as possible to increase the speed of internet along with a disturb free line .
  • The government should also set up IT software parks in the capital Dhaka and at universities across the country to attract more graduates to the sector and ensure the right skills training is available.
  • Proper initiatives should be taken for starting the service of Pay Pall.
  • Loadsheding should be eradicate for a smooth growth of the sector.
  • Internet network must be made available in remote areas.

Glossary

1.1       A freelancer, freelance worker, or freelance is somebody who is self-employed and is not committed to a particular employer long term.

1.2     Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured.

1.3       Online outsourcing is the business process of contracting third-party providers (often overseas) to supply products or services which are delivered and paid for via the internet.

1.4      Crowdsourcing starts with decentralization, by sourcing tasks traditionally performed by specific individuals to a group of people or community (crowd) through an open call. In this way it is different from sites such as Stack Overflow, Twitter or Facebook, which do not have open call for contributions.

Appendixes

2.1     Interview of a young freelancer:

Ashish Ghosh is a Android application developer at Algonyx, a new freelancing software developing company . He completed his graduation from Shahjalal University of Science and Technology(SUST) in Computer Science and Engineering. He spoke about lots of aspects of freelancing business in a discussion. He can be reached at +880-1673087092. The main parts of that discussion  is given below:

Question         :   Have you been working here in Algonyx for a long time?

Ashish Ghosh :   No, I’m working here for three months only. But I am  connected with this                            kind  of job from student life.

Question         :    What is the present condition of this sector ?        

Ashish Ghosh :    At present, this sector is blooming in Bangladesh. The growth rate is very      high. Many people are coming in freelancing business sector.

Question         :      How bright the future of freelancing business sector you find  in Bangladesh?

Image : Ashish Ghosh

Ashish Ghosh :    The global market condition, Bangladesh’s potentiality, large number of educated youth, low value of Taka, lower labour cost brings a hope for Bangladeshi freelancer and freelancing business companies.We have the potentiality but some problems are hindrances our progress.

Question         :     What are they?

Ashish Ghosh :     The main problems are shortage of power, money transfer problem,  low internet speed etc.

Question         :      Thanks a lot for the interview.

Ashish Ghosh :     Thank you also.

The interview is taken on 13 February,2012.

2.2     www.eprothomalo.com, February 4,2012; 17

2.3  http://www.newagebd.com/2010/feb/15/busi.html#3

Bangladesh emerging IT outsourcing destination: survey

Posted on February 15, 2010

A leading global auditing and business advisory group has listed Bangladesh as one of the emerging Asian destinations for sourcing software, information technology-enabled services and business process outsourcing.

The Amsterdam-based KPMG in a survey report placed Bangladesh with Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam, along with India on the list of emerging Asian IT services suppliers.

The survey report, Asia-Oceania Vision 2020: Enabling IT leadership through collaboration, was released on Friday.

The KPMG, which prepared the report in association with the Tokyo-based Asian-Oceanian Computing Industry Organisation, included Cambodia, Laos, Mongolia, Myanmar and Nepal in the list of potential suppliers.

The report said the Asia-Oceania would become the largest supplier of IT and business process outsourcing services to the world by 2020. The Asia-Oceania is set to account for 74.5 per cent of global IT services demand by 2020.

The report showed a comparison of age of people among 15 Asian countries to link prospect of IT services business.

It found that only 5.6 per cent of Bangladeshis are aged 65 and above. Such aging percentage is 5.6 in the Philippines, 6.5 in India, 13.8 in Thailand and 29.5 in Japan.

The report analysed that countries like Bangladesh which have a good pool of young people, should stay in the list of Asia IT leaders.

The report said huge IT enthusiastic young people and rapid acceptance of IT services in Bangladesh were advantages for the country to be an IT service exporting country.

‘Our report looks at the current growth and future prospects for the IT industry in surveyed countries over the years and current trends influencing the industry have been examined,’ the KPMG said.

The report, however, warned that climate change, poverty and inequality, infrastructure deficits were bottlenecks to Bangladesh’s growth and these impediments should be tackled to become one the leading IT services sources.

The Denmark ambassador to Bangladesh, Einer H Jensen, observed Bangladesh’s IT industry had a ‘good start’ on the global outsourcing market in recent times. Some Danish companies are working with around 20 Bangladeshi companies to develop and outsource software and IT-enabled services.

‘It [Bangladesh] could be a preferred destination for outsourcing in the near future,’ he told New Age.

Citing a recent World Bank report, he said more then 8,000 Bangladeshi young software developers had found jobs in the industry in the past two years and nearly 1,000 of them were working in Denmark-Bangladesh IT joint ventures.

Industry sources said Bangladeshi IT industry had also developed business relation with clients in Japan and other parts in the world along.

Safquat Haider, a director of the Bangladesh Association of Software and Information Services, said the IT potentials of Bangladesh had increasingly been pointed out by industry monitors globally.

‘The IT industry is warming up for a breakthrough, as global clients are calling local companies increasingly and a significant local market is also being readied,’ said Haider, whose IT company, CIPROCO develops telecommunication, geographic information system and Enterprise resource planning solutions for clients at home and abroad.

References

3.1    A brief history of freelance marketplaces;  25 May ,2010.

http://www.whichlance.com/outsource-resource/item/a-brief-history-of-freelance-marketplaces

3.2    http://en.wikipedia.org/wiki/Freelancer

3.3   eBiz, March 2011, 54

3.4     http://www.gartner.com/technology/home.jsp

3.5     Dawn.com, Bangladesh teenagers drive outsourcing growth, 8th June 2011. http://www.dawn.com/2011/06/08/bangladesh-teenagers-drive-outsourcing-growth.html

3.6      http://www.bolaka.com/directory/outsourcing-company

3.7    Local freelancers flourish onlineFebruary 26, 2011

http://www.blogs.com.bd/2011/02/local-freelancers-flourish-online/

3.8     Bangladesh Outsourcing Conference, Dec 19, 2011

http://outsourcing2011.com.bd/

3.9   http://www.wikipedia.org

3.10    www.guru.com

3.11    http://www.bangladeshtrades.com/bangladesh-business/Computers-                 Internet/outsourcing-companies/index.html

3.12     www.gartner.com

3.13      https://www.odesk.com/blog/

3.14      http://www.thefinancialexpress-bd.com/more.php?news_id=94272

 

Advertisements

2 thoughts on “PROGRESS AND PROSPECT OF FREELANCING BUSINESS IN BANGLADESH

  1. Hi! I’ve been following your website for
    a long time now and finally got the bravery to go ahead and give you a shout out from Porter Texas!
    Just wanted to say keep up the fantastic job!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s