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The outlook for the 21st century is going to be increasingly defined by the emerging markets in Asia. However, in stark contrast to its neighboring counterparts – India and China, Bangladesh, currently a factor driven economy, is barely hanging onto the lower rungs of the global competitive index. The obstacles lie in grossly inefficient systems, bureaucratic red tape and political turmoil. However, even with the status quo Bangladesh has strived to maintain a commendable GDP rate of ~6%.
The opportunities and the answers lie with the expanding private sector especially the SME/Startup business segment. Given the right business models and global best practice adoption Bangladesh can lubricate its way forward.
An emerging economy like Bangladesh faces a plethora of problems and opportunities alike. Starting from corruption, bureaucracy, red tape, political instability, power games, market inefficiencies and ending in limitations of financing options, absence of good education and uneven business competition fields, and the list goes on.
However for an economy to move forward the role of Startups cannot be denied. A cursory glance at the world superpower (US) or Bangladesh’s two powerful neighbors (India and China) confirms the hypothesis. Bangalore alone has lubricated India’s move to become an IT outsourcing giant (companies like TCS, Infosys, Wipro have gone global big time) and China (no need to elaborate) have only recently come down from its double digit GDP growth. Companies like Alibaba have more sales than Amazon and e-bay combined.
In Bangladesh there is an acute problem with Startups (arguably the most potent engine for growth) in three levels.
First there is absence of infrastructure – not only there isn’t any proper incubation centers, accelerators but there is dearth of mentorships and access to finance (here with 56 banks and 31 NBFIs – the options are mostly debt based which has high interest rate and has to be backed by collaterals). We need to circumvent a Startups capital needs via Angel Investment Networks, Venture Capitals and Private Equity Hedge Funds. And you also need exit strategies for the fund providers by a vibrant equity capital market.
Secondly, the business environment is far from being “fairly” competitive. The inefficiencies is the market are at a monumental level. You need “speed” money everywhere and the exiting players create entry barriers by virtue of “lobbying” and “muscle power”. Moreover, payment terms are equally bad and often young businesses already burdened by high financial cost die down because of cash flow crunch.
Lastly, our society as a whole is yet to embrace the concept of “business out of opportunity”. At large especially the elders has the viewpoint that you only do business if you fail to get a respectable job and in itself business is out of necessity and not a prestige institution.
So, as a way forward we need to start giving Startups the right push, mentorship and providing not only business but funding networks. Building an ecosystem via collaboration with Angel Investment Networks, the government, trade chambers and of course the budding Startups is of utmost priority.
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