Bangladesh should immediately formulate a five-year national plan to develop its digital platform economy as the transformation towards online platform-based economic activities has already begun here, said experts at a webinar organised by the Centre for Policy Dialogue (CPD) on Monday.
The think tank, in partnership with Friedrich-Ebert-Stiftung (FES) Bangladesh Office, arranged the online seminar to discuss its recently published report "Digital Platform Economy in Bangladesh: Opportunities and Challenges" with economists and digital entrepreneurs of the country.
Speakers said digital platforms are like matchmakers between buyers and sellers online, eliminating middlemen to reduce entry barrier for small firms, making purchase of products and services more convenient and affordable, and also increasing the efficiency of business activities through the utilisation of technology.
Platform companies have already revolutionised many sectors including transportation, accommodation, travel, shopping, international trade, and even the labour market across the globe to shape the future of work and Bangladesh is also being a part of it.
Platform companies who are neither the ultimate buyers nor the sellers and just work as online marketplaces facilitated $126 billion spending in 2018 globally that enabled seven crore people to work for them, said Syed Yusuf Saadat, Senior Research Associate of the CPD.
Bangladesh as a quick learning nation is rapidly adopting online-based economic activities and it is reflected in the data regarding Bangladeshis' participation in the global market of online work, emergence of ride sharing, e-commerce and digital payments.
Bangladesh now is the second largest supplier of online workers to the global market and is considered to grow more in future, thanks to the low-cost of labour here, Syed Yusuf Saadat said during his keynote speech. Bangladesh's market share in the global business process outsourcing has increased to 16%, he added.
The workers and their employers meet each other on digital platforms having no permanent contract but offering a decent earning.
App-based ride sharing in Dhaka city alone had created an annual market of around Tk2,200 crore before the sector began to suffer disruptions due to the pandemic last year, said the CPD researcher.
Several hundred thousands of drivers and motorcycle riders availed independent earning sources there.
E-commerce that has jumped manifolds during the pandemic now engages around one lakh people as there already have emerged around 2,000 web-based platforms and more than 50,000 Facebook-based small and medium entrepreneurs, according to estimates by the E-commerce Association of Bangladesh. The association predicts that 5 lakh jobs will be created in the sector in the next one year.
The new generation is rapidly adopting the new way of life and work and the boost in digital payment in the country too reflects that.
Citing Bangladesh Bank's data, Syed Yusuf Saadat said digital payment grew 24 times over the four years up to 2020.
However, the digital divide reflected through a very low per-capita use of computer, access to speedy internet connection, use of debit and credit cards are still a bane for the growth of digital economy while smartphones and mobile financial services saved the nations' back through inclusion of rural and low income people into the game to some extent.
The webinar chaired and moderated by CPD Distinguished Fellow Professor Mustafizur Rahman got some top digital entrepreneurs of the country in a panel discussion.
Hossain M Elius, CEO of local ride-sharing to food delivery giant Pathao, said digital platforms need scaling up for impacts and sustainability and a lack of skilled manpower is a big challenge there.
"Educated youth learn the theories at classes but significantly lack practical skills," he said.
To scale up, platform companies need funding, other panel discussants mentioned, adding most of the local firms are facing difficulties due to a lack of sufficient funding. They suggested taking measures to attract foreign investment to the sector.
The absence of a sufficiently accommodative and supportive ecosystem was also pointed out as a major challenge for the digital platform companies who are reducing the social and economic gaps.
CPD researchers recommended that a five-year digital platform economy development plan be formulated immediately to address too many unresolved issues that include skill gaps, transparency, data privacy, consumer rights, taxation matters, and also the digital awareness.
Technology evolves faster than policies and regulations, said Professor Mustafizur Rahman, adding Bangladesh's policy formulators need to catch up sooner.
Farhana A Rahman, senior vice president of Bangladesh Association of Software and Information Services; Fahim Uddin Shuvo, founder & CEO of Garbageman; FahadIfaz, co-founder and CEO of iFarmer; and Mohammad Abdul MatinEmon, CEO of Doctorola Limited, participated in the panel discussion, while CPD Executive Director Dr Fahmida Khatun and FES Resident Representative Felix Kolbitz delivered the introductory remarks at the dialogue.