Why Outsourcing Software Development to Bangladesh is a Smart Business Decision

The global outsourcing industry is worth an estimated $85 billion, and Bangladesh is one of the fastest-growing outsourcing and offshoring destinations. Oxford Internet Institute states that Bangladesh is the second largest country offering outsourcing services. These statistics prove that thinking about offshore software development in Bangladesh is a smart business decision after all. 

In this blog post, we'll explore some of the main reasons for the growth of IT outsourcing from Bangladesh, including the country's incentives for the IT outsourcing sector, the tech talent pool, how skilled Bangladeshi developers are, and the low labor costs and costs of living.

1) Incentives to encourage the IT outsourcing sector

Offshore software development in Bangladesh comes with a lot of incentives to stimulate the growth of IT outsourcing in the country. These include tax holidays, duty-free imports of capital equipment, and preferential treatment in government procurement.

The government has also established many special economic zones (SEZs) specifically for developing the IT sector. These SEZs offer a range of benefits including fast-track approvals, infrastructure support, and access to skilled labor.

In addition, the Bangladesh Association of Software and Information Services (BASIS) provides a range of support services for IT companies operating in the country. This includes training and certification, access to market intelligence, and advocacy on policy issues. 

According to a case study by the University of Oxford, software development is the most outsourced service in Bangladesh. Software development engineers in Bangladesh and Bangladeshi developers are well-versed in full-stack web development. These professionals can create an entire website or mobile application from the start, depending on your business needs. This makes going in for offshore software development services in Bangladesh ideal. 

Also, an ever-increasing number of technical graduates and proficient human resources are helping the Bangladeshi IT outsourcing industry expand like never before, making outsourcing custom software development from Bangladesh more result-oriented. Some of the international IT and BPO companies, such as Sony, IBM, and Fujitsu have outsourced software development in the country. 

Together, these factors make IT outsourcing from Bangladesh beneficial and an attractive destination for IT outsourcing companies looking to establish a presence in Asia. 

2) Tech talent pool and young talent

The main reasons for the growth of offshore software development in Bangladesh are the availability of a large tech talent pool and young talent. The country has a large pool of skilled and educated professionals, particularly in the fields of computer science and engineering.

The literacy rate in Bangladesh is improving through the use of technology in the education sector. Government funding and growing NGO participation have also pushed the country’s education system in the right direction. Ultimately, it has increased the skill level and preparedness of the local workforce, which only enhances the global demand for outsourcing custom software development from Bangladesh. 

Bangladesh has one of the largest populations in the world, with over 160 million people. This provides a large pool of potential employees for IT outsourcing from Bangladesh. Besides, the population is relatively young, with over 60% of the population under the age of 30. This means that there is a large supply of young people in the form of Bangladeshi developers who have the necessary skills for working in the IT industry.

The Bangladeshi government has also been supportive of the growth of the IT sector. It has provided tax breaks and other incentives to attract foreign investment and has developed a number of special economic zones (SEZs) specifically for IT companies. As a result, Bangladesh has become an attractive destination for companies looking to outsource their IT needs.

Freelancing has also grown to be the main source of income for Bangladeshi developers and graduates. Currently, more than 65,000 Bangladeshi freelancers are registered on Upwork, a marketplace for freelancers.

3) Low Cost of Labor

The cost of living and labor in Bangladesh is significantly lower than in developed countries, making it an attractive destination for companies looking to outsource their IT needs. When looking at offshore software development companies in Bangladesh, the average monthly salary for a software engineer is just $288, compared to $4,000 in the United States. This wage gap is even more pronounced when considering the cost of living. For example, the average rent for a one-bedroom apartment in Dhaka is just $150, compared to $1,500 in San Francisco.

This wage gap allows companies to save on labor costs when they outsource their IT needs to Bangladesh, making IT outsourcing from Bangladesh a success. Also, the low cost of living makes it an attractive destination for foreign workers. For example, a meal at a restaurant in Dhaka costs just $2, compared to $20 in New York City. This makes it possible for workers to live comfortably on a lower salary.

The low labor costs and cost of living are major factors driving the growth of IT offshoring to Bangladesh. Companies can save on labor costs and provide their employees with a good standard of living. This makes offshore software development companies in Bangladesh an attractive destination for companies looking to outsource their IT needs.

4) Advanced Infrastructure

The development of advanced infrastructure is one of the key factors driving the growth of IT offshore software development in Bangladesh. The roads are well-built and maintained, there is a reliable power supply, and the internet connectivity is excellent. This means that companies can be confident that their outsourced development projects will be carried out smoothly and without any disruptions.

Besides this, the country has seen a rapid expansion of its telecommunications and power sectors in recent years, making it an attractive destination for companies looking to outsource their IT needs. 

The telecommunications sector has seen a major transformation in recent years, with the rollout of high-speed broadband and mobile networks. This has made Bangladesh an attractive destination for companies looking to outsource their IT needs. The power sector has also seen a major expansion, with the government investing heavily in new power plants and transmission lines. This has made Bangladesh and Bangladeshi developers an attractive choice for companies looking to outsource their IT needs.

The Government encourages foreign investment and has set a target to generate export revenues of 5 billion USD from the ICT sector by 2030. To reach this target, the Bangladesh Hi-Tech Park Authority is working to support technology policies, adoption, and employee skill-up facilities all throughout their investment journey. The Government approved a project to build 12 high-tech parks in Dhaka and other districts in 2017. The construction for these started in February 2022 which helps with

• High-tech solutions: The project aims to better strengthen the ‘Digital Bangladesh’ program and the local IT industry with state-of-the-art networking systems, smart building solutions, and fiber optic connections. 
• Supports the training of multiple individuals: These parks stimulate the training of 2,400 budding Bangladeshi developers dealing in robotics, machine learning, artificial intelligence, IoT (Internet of Things), and other advanced technologies.

5) Education that focuses on skill building

The education system in Dhaka/Bangladesh is strongly focused on skill learning and building, which is another reason to offshore software development to Bangladesh. The schools in Dhaka/Bangladesh are well-equipped and staffed with qualified teachers that help students acquire the knowledge and skills needed to thrive in the workforce. This means that companies can be confident that their employees will be able to receive a good education while they are working in this region.

The universities in Dhaka /Bangladesh are also of a high standard, which means that companies can be confident that their employees will be able to receive a good education while they are working in this region. The universities offer a wide range of courses, which means that employees will be able to find one that suits their needs and interests. With skill-based learning, individuals become more self-sufficient and are capable of generating their own income, making offshore software development in Bangladesh a reality.

The government of Dhaka, Bangladesh is committed to improving the education system in the country, which is another reason why it is a wise move to offshore software development services in Bangladesh. The government is investing significant amounts of money into the education system, which means that the quality of education will continue to improve in the future. 

Given these factors, you can rightfully say that Bangladesh is a country with immense potential in IT outsourcing and investments, which is only going to multiply in the coming years, making offshore software development in Bangladesh a smart business decision.

If you need any help unlocking the true potential of your business and taking your software development aspirations to the next level, get in touch with our software experts.