Bangladesh Trade Center published research articles on Trade, Investment, Commerce, Business, Economic Development, etc. issues here in its Knowledge Center.
Infrastructure refers to the basic facility required to run the daily life of the citizen of a country or city like roads, bridges, tunnels, water supplies, sewers, electricity, gas, telecommunication system, cellular network, internet connectivity and broadband speed etc. infrastructures are primarily classified into two brad heads namely, hard infrastructures like transportation networks like roads, airports, sea ports or river ports, railroads etc. and soft infrastructures like education system, healthcare system, law and order situation, financial system, form of government, financial service and government responses to the civil emergency etc. of a country. Bangladesh has primarily graduated from the LDC list this year and hopping to be sustainably graduating into developing countries list by 2024. To fulfill that mission, we have to fight few socioeconomic inconveniences like providing employment to the existing unemployed as well as newcomers in this category, improve infrastructure (hard and soft) facilities, transform the economy from agriculturally based into industrialized one.
Transformation of Bangladesh economy from agricultural into industrialized economy has been started naturally during last couple of decades. For example, contribution of Agriculture, Industry and Service Sector to Bangladesh GDP in 1972 (soon after the independence) was 59.60 6.06 percent and 34.32 per cent respectively. In the year 1980 contribution of the same sectors to Bangladesh GDP was 31.55 percent (Agriculture), 20.63 percent (Industry) and 47.81 percent (Service). Current contribution (2016) of Agriculture reduced into 14.77, Industry and Service Sectors increased into 28.76 percent and 56.45 percent respectively. From the above statistics it is clear that, Bangladesh economy is transforming from agricultural economy into industrial economy, but the transformation speed is too slow. Questions may be asked that, why this transformation is necessary. This transformation is necessary because per acre agricultural land the highest threshold of production. After that particular threshold further growth in agriculture is not possible. On the other hand, productivity of the same size of industries is much higher than that of agriculture.
Secondly, there are above 3 million unemployed (workable) populations in Bangladesh, another 2 million newcomers are adding with this number as fresh job seekers. But Bangladesh is experiencing a job less growth during last couple of years. As a result, burden of unemployment in mounting up day by day. Government alone is unable to create employment opportunities for such a huge number of citizens. Therefore, industrialization is the most suitable options for employment generation, increasing GDP growth, enlarging export basket and finally sustainably graduating into a middle-income developing country. To speed up industrialization movement government initiated some initiatives like the honorable Prime Minister herself seat in a forum called National Council for Industrial Development (NCID), Ministry of Industries is providing secretarial support to this council. Among others Bangladesh Small and Cottage Industries Corporation (BSCIC) and SME Foundation are working to facilitate entrepreneurship development and industrialization in the country. But due to lack of industrial infrastructure facilities Bangladeshi industrialization movement is not getting momentum. Now come to the points what is industrial infrastructure? And why these are important to increase industrialization movement of Bangladesh?
Industrial Infrastructure Development in Bangladesh
Industrial Infrastructure is a set of physical facilities essential for healthy operations and further growth of the industrial operations in a country or city. Industrial infrastructure is also known as commercial infrastructure. Industrial Infrastructures of Bangladesh could be described as follows:
Aviation Facilities: There are three international and seven domestic Airports in Bangladesh. These are Hazrat Shahjalal International Airport, Shah Amanat International Airport, Osmani International Airport (International), Cox’s Bazar Airport, Jessore Airport, Shah Makhdum Airport, Barisal Airport, Ishurdi Airport, Saidpur Airport, and Comilla Airport (Domestic). This number of only 10 airports is self-descriptive that most of the districts of Bangladesh are out of air network. Airport facilities, security systems, cargo handling etc. capacity are minimal to offer a full sewing aviation service for tomorrows Bangladesh. About nine airline operators are operating local and international flights in Bangladesh but the national carrier Biman is a losing concern. Bangladesh has a very small network of destinations connected by direct flight and cargo transport facility. This network has to be broadened and air cargo service destinations have to be enlarged to fulfill increasing demand of tomorrow’s industrialization.
Roads and Highways: Bangladesh has 3.33 lac kilometers of road network. Maximum lengths of this network are Upzila, Union and Village level road. Condition of only 19.46% is good, 37.47% is fair and rests are poor and very poor. Among 3.33 lac kilometers of roads national highways are only 3.5 thousand kilometers. But Dhaka Chittagong Highways (215 kilometer) carries above 60% of Bangladesh’s commercial traffic and 27% passengers of the country. Therefore, traffic jam is a regular phenomenon here in this highway. An alternative road between Dhaka and Cittagong is the necessity of time to promote hassle free transportation of export-oriented goods and imported raw materials to and from the busiest port i.e., Chittagong port. Economic importance of Dhaka – Chittagong port is more than all other roads and highways of the country. Government has a plan to make Dhaka-Chittagong Economic Corridor functional. It would help to uplift living standard of the linked cities like N.Gonj, M.Gonj, Comilla, Feni etc. SEZ going to be established besides Dhaka Chittagong Economic Corridor like AMEZ, API Industrial Parks, Mireshwrai SEZ etc. would be a piece of diamond of this economic corridor.
Railway: There are only 2.87 thousand kilometers of railroads in Bangladesh. Most of the cities are out of rail network and its service. It is one of the busiest modes of transport in Bangladesh but losing concern due to some hidden reason. Railway could be a safe and quickest mode of transport for passengers as well as goods in Bangladesh. New railroads have to be constructed and operated in commercial mode. Government can open up this sector for private investment like the cellular phone sector. Private Investment can develop this sector and make it profitable. Mode of private investment in this sector could be BOO (build, operate and own) or BOT (build, operate and transfer) under the PPP modality.
Industrial Infrastructure Development in Bangladesh: Industrial Infrastructure Development in Bangladesh
*Author’s Short Profile:
Md. Joynal Abdin
Mr. Md. Joynal Abdin is a Business Consultant & Digital Marketer based in Dhaka, Bangladesh. He is also Co-Founder & CEO of Bangladesh Trade Center. Previously he served at Dhaka Chamber of Commerce & Industry (DCCI) as Executive Secretary; DCCI Business Institute (DBI) as Executive Director; SME Foundation as Deputy Manager; and the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) as Assistant Secretary.
The list of services Mr. Abdin is offering includes but not limited to Business Research and Documentations like Feasibility Study, Project Proposal Preparation, Writing Business Manual, Standard Operating Procedures etc.; Export Market Selection and Product Positioning at Home and Abroad; Buyers-Sellers Matchmaking; Website Development; Search Engine Optimization (SEO); and Social Media Marketing etc.
Industrial Infrastructure Development in Bangladesh: Industrial Infrastructure Development in Bangladesh
In the realm of modern business, e-commerce has become a cornerstone for profitability and growth. The digital landscape presents numerous opportunities for entrepreneurs to capitalize on, but achieving success in the e-commerce arena requires strategic planning, innovation, and a customer-centric approach. This article explores the ten most profitable e-commerce strategies that businesses can leverage to unlock their full potential and thrive in the competitive online marketplace. Strategies are as follows:
Niche Selection and Product Research: One of the first and most critical steps in e-commerce success is identifying a profitable niche and conducting thorough product research. By tapping into niches with high demand and low competition, businesses can position themselves for success. Conduct market analysis, assess trends, and identify gaps in the market to offer products that resonate with consumers’ needs.
Optimized User Experience (UX): A seamless and intuitive user experience is paramount for e-commerce success. From responsive website design to intuitive navigation, providing a user-friendly interface enhances customer engagement, reduces bounce rates, and encourages repeat purchases. Focus on quick load times, mobile optimization, and easy checkout processes to ensure a positive UX.
Data-Driven Decision Making: Leverage analytics tools to gain insights into customer behavior, preferences, and purchasing patterns. This data-driven approach enables businesses to make informed decisions about inventory management, marketing strategies, and product recommendations, leading to increased sales and customer satisfaction.
Personalization and Customer Segmentation: Tailoring the shopping experience to individual customers’ preferences boosts engagement and conversions. Utilize data to segment customers based on demographics, purchase history, and behavior, enabling personalized recommendations and targeted marketing campaigns that resonate with specific segments.
Effective Digital Marketing: Crafting a robust digital marketing strategy is essential for driving traffic and increasing sales. Employ a combination of SEO, social media marketing, pay-per-click advertising, and influencer collaborations to reach your target audience. Invest in high-quality content that educates, entertains, and engages potential customers.
Conversion Rate Optimization (CRO): CRO focuses on maximizing the percentage of website visitors who convert into customers. Implement A/B testing, optimize product descriptions and images, and fine-tune your checkout process to reduce cart abandonment rates and boost overall conversions.
Customer Relationship Management (CRM): Building strong customer relationships is key to e-commerce success. Implement a CRM system to manage customer interactions, provide exceptional customer support, and foster loyalty through personalized communication, loyalty programs, and post-purchase follow-ups.
Seamless Multi-Channel Selling: Expand your reach by selling across multiple channels, including your website, marketplaces (e.g., Amazon, eBay), and social media platforms. Each channel presents unique opportunities to connect with different customer segments and maximize sales potential.
Influencer Partnerships and User-Generated Content: Collaborate with influencers and encourage user-generated content to create authentic connections with your target audience. Influencers can introduce your products to their followers, while user-generated content builds trust and social proof.
Continuous Innovation and Adaptation: The e-commerce landscape is ever-evolving. Stay ahead of the curve by embracing technological advancements, such as AI-powered chatbots, virtual try-ons, and augmented reality shopping experiences. Continuously monitor industry trends and customer preferences to adapt your strategies accordingly.
Navigating the world of e-commerce requires a holistic approach that encompasses niche selection, user experience optimization, data-driven decision-making, personalized marketing, and innovation. By implementing these ten profitable strategies, businesses can position themselves for success in the competitive e-commerce arena. Embrace the power of data, foster customer relationships, and stay agile to seize opportunities and overcome challenges, ultimately unlocking the full potential of e-commerce profitability.
Ecommerce Strategies
Niche Selection and Product Research: The Cornerstone of E-Commerce Success
In the dynamic world of e-commerce, the path to success begins with a fundamental decision: niche selection. Choosing the right niche and conducting thorough product research is the bedrock upon which profitable e-commerce ventures are built. This comprehensive guide explores the intricacies of niche selection and product research, delving into their significance, strategies, and transformative impact on achieving e-commerce success.
1.1 Why Niche Selection Matters: Niche selection is the process of identifying a specific segment of the market that caters to a distinct set of customer needs, preferences, and problems. Opting for a well-defined niche over a broad market offers several advantages:
Reduced Competition: Focusing on a specific niche minimizes competition from larger, more generalized players. This allows for greater visibility and easier brand differentiation.
Targeted Audience: A well-defined niche enables businesses to tailor their marketing efforts, messaging, and products to a highly targeted audience, increasing the chances of resonating with customers.
Expertise and Authority: Niche-focused businesses can position themselves as experts and authorities in their chosen field, fostering trust and credibility among their audience.
Customer Loyalty: Satisfying niche-specific needs creates a strong bond with customers, leading to enhanced loyalty and repeat business.
1.2 Strategies for Effective Niche Selection:
Passion and Interest: Choose a niche that aligns with your passion and interest. Genuine enthusiasm will fuel your commitment to the business and resonate with customers.
Market Demand: Analyze market trends, search volume, and keyword research to identify niches with consistent and growing demand.
Competition Analysis: Research existing competitors in your chosen niche. Assess their strengths and weaknesses to identify gaps you can exploit.
Profitability: Evaluate the potential profit margins within the niche. Are customers willing to pay a premium for your products?
Longevity: Opt for niches with long-term sustainability, rather than trends that may fizzle out quickly.
1.3 The Role of Product Research: Once you’ve selected a niche, thorough product research is essential to identify products that align with your target audience’s needs and preferences. Product research involves:
Identifying Demand: Utilize tools like Google Trends, Amazon Best Sellers, and social media trends to gauge the popularity and demand for potential products.
Sourcing Opportunities: Determine whether you’ll manufacture, source, or dropship products. Evaluate the feasibility and cost-effectiveness of each option.
Competitor Analysis: Study your competitors’ product offerings, pricing, customer reviews, and unique selling propositions (USPs).
Quality and Reliability: Ensure that the products you’re considering meet high-quality standards and are reliable. Poor-quality products can harm your brand reputation.
Market Fit: Assess whether the products align with your niche’s characteristics and your target audience’s preferences.
1.4 Transformative Impact on E-Commerce Success: Niche selection and product research are not isolated tasks; they lay the foundation for a successful e-commerce venture:
Focused Marketing: A well-chosen niche allows you to tailor your marketing efforts to a specific audience, increasing the likelihood of capturing their attention.
Effective Messaging: Understanding your niche enables you to craft compelling messaging that resonates with customer pain points and aspirations.
Product-Market Fit: In-depth research ensures that your products meet customer needs, leading to higher customer satisfaction and repeat business.
Brand Identity: A well-defined niche helps you establish a strong brand identity that customers can relate to and trust.
Competitive Edge: Niche-focused businesses often face less competition, allowing them to stand out and become a go-to source for specific needs.
The significance of niche selection and product research in the e-commerce journey cannot be overstated. Choosing a well-defined niche and conducting thorough research pave the way for targeted marketing, effective messaging, and customer loyalty. By meticulously analyzing market demand, competition, profitability, and product viability, businesses can position themselves for success in the competitive e-commerce landscape. Ultimately, niche selection and product research serve as the compass that guides businesses toward profitability, customer satisfaction, and long-term growth in the world of online commerce.
User Experience
Optimized User Experience: Elevating E-Commerce Success through Seamless Interaction
In the fast-paced realm of e-commerce, where competition is fierce and customer expectations are high, optimizing user experience (UX) is a pivotal strategy for achieving sustained success. A seamless and intuitive user experience can significantly impact customer engagement, conversion rates, and brand loyalty. This comprehensive exploration delves into the intricacies of optimized user experience in e-commerce, examining its importance, key elements, strategies, and transformative impact on driving business growth.
2.1 Understanding the Significance of Optimized User Experience: User experience encompasses every touchpoint a customer has with a brand’s digital presence, from website navigation to checkout process. A positive user experience is essential for several reasons:
Customer Satisfaction: An intuitive and enjoyable experience keeps customers engaged and satisfied, increasing the likelihood of repeat purchases.
Reduced Abandonment: A smooth user experience minimizes cart abandonment rates, enabling businesses to capitalize on potential sales.
Brand Perception: A user-friendly website enhances the brand’s credibility and fosters trust among customers.
Differentiation: A superior user experience sets a business apart from competitors, allowing it to stand out in a crowded market.
2.2 Key Elements of Optimized User Experience:
Responsive Design: Ensure your website is responsive and adapts seamlessly to various screen sizes, including desktops, tablets, and smartphones.
Intuitive Navigation: Simplify site navigation by categorizing products logically and using clear menus and search functionality.
Fast Load Times: Speed is crucial. Slow-loading pages frustrate users and increase bounce rates.
Clear Call-to-Action (CTA): Use prominent CTAs that guide users toward desired actions, such as “Buy Now” or “Add to Cart.”
User-Friendly Checkout: Streamline the checkout process with minimal steps, guest checkout options, and progress indicators.
High-Quality Imagery: Use high-resolution images that showcase products from different angles, providing users with a clear view.
Mobile Optimization: With mobile shopping on the rise, ensure that your mobile site offers a seamless experience.
Personalization: Tailor product recommendations and content based on user behavior and preferences.
Minimized Distractions: Eliminate unnecessary clutter and distractions that might divert users from their intended actions.
2.3 Strategies for Achieving Optimized User Experience:
User-Centric Design: Develop your website with the user in mind. Conduct user testing to gather feedback and refine the design.
Mobile-First Approach: Prioritize mobile design, given the increasing prevalence of mobile shopping.
A/B Testing: Continuously test different elements, such as button placement, colors, and imagery, to determine what resonates best with users.
Streamlined Checkout: Simplify the checkout process by offering guest checkout, auto-fill forms, and secure payment options.
Loading Speed Optimization: Optimize images, leverage caching, and use content delivery networks (CDNs) to enhance page loading times.
Feedback and Reviews: Include customer reviews and ratings to build trust and offer social proof.
2.4 Transformative Impact on E-Commerce Success: Investing in optimized user experience can yield remarkable results:
Increased Conversions: A seamless experience reduces friction, increasing the likelihood of users completing purchases.
Enhanced Customer Loyalty: A positive experience fosters customer loyalty and encourages repeat business.
Reduced Bounce Rates: An intuitive interface keeps users engaged and reduces bounce rates.
Brand Advocacy: Satisfied customers are more likely to share their positive experiences, contributing to word-of-mouth marketing.
Competitive Edge: Superior user experience differentiates your brand from competitors, attracting and retaining customers.
Optimized user experience is a cornerstone of e-commerce success. It influences customer satisfaction, conversions, and brand loyalty. By prioritizing responsive design, intuitive navigation, fast load times, and streamlined checkout processes, businesses can create a digital environment that resonates with users, encourages engagement, and ultimately drives growth. As customer expectations continue to evolve, businesses that consistently deliver exceptional user experiences will stand out and thrive in the competitive e-commerce landscape.
Data-Driven Decision Making
Data-Driven Decision Making: Illuminating E-Commerce Success through Informed Strategies
In the era of digital transformation, data is an invaluable asset that empowers businesses to make informed decisions, innovate, and drive growth. In the realm of e-commerce, where competition is fierce and customer expectations are ever-evolving, data-driven decision making has emerged as a fundamental strategy for achieving sustained success. This comprehensive exploration delves into the intricacies of data-driven decision making in e-commerce, highlighting its significance, benefits, implementation strategies, and transformative impact on driving business outcomes.
3.1 The Significance of Data-Driven Decision Making: Data-driven decision making involves collecting, analyzing, and interpreting data to guide strategic choices across all facets of an e-commerce business. The significance of this approach cannot be understated:
Informed Strategies: Data empowers businesses to make decisions based on facts rather than assumptions, reducing the risk of errors and aligning strategies with actual market trends.
Customer Insights: Analyzing customer behavior, preferences, and feedback helps businesses tailor their offerings to meet customer needs more effectively.
Performance Evaluation: Regular analysis of key performance indicators (KPIs) provides insights into what’s working and what needs improvement, leading to continuous optimization.
Competitive Advantage: Leveraging data allows businesses to identify market trends and stay ahead of competitors by offering products and experiences that resonate with customers.
3.2 Benefits of Data-Driven Decision Making:
Precision and Accuracy: Data-driven decisions are rooted in accurate and quantifiable information, minimizing guesswork and ensuring greater precision.
Strategic Alignment: Align business strategies with customer demands and market trends, optimizing resource allocation and enhancing outcomes.
Risk Mitigation: Data analysis enables businesses to identify potential risks and challenges, allowing for proactive mitigation strategies.
Personalization: Personalized experiences drive customer engagement and loyalty. Data helps businesses tailor marketing messages, product recommendations, and user interfaces.
Continuous Improvement: Ongoing data analysis facilitates a culture of continuous improvement, helping businesses refine their strategies based on real-time feedback.
3.3 Strategies for Implementing Data-Driven Decision Making:
Data Collection: Identify relevant data sources, such as website analytics, sales data, customer feedback, and social media metrics.
Define KPIs: Establish key performance indicators that align with business goals, such as conversion rates, customer acquisition costs, and average order value.
Data Analysis Tools: Leverage data analysis tools and platforms, such as Google Analytics, to gather insights and trends from the collected data.
Segmentation: Segment data to understand customer behavior, preferences, and demographics, enabling targeted marketing efforts.
A/B Testing: Conduct A/B tests to compare different strategies, such as website layouts, product descriptions, and marketing campaigns, and identify the most effective approach.
Predictive Analytics: Utilize predictive analytics to forecast trends, customer behavior, and demand, enabling proactive decision making.
3.4 Transformative Impact on E-Commerce Success: Implementing data-driven decision making yields transformative outcomes:
Optimized Marketing: Target marketing efforts more effectively by understanding which campaigns and channels yield the highest returns.
Enhanced Customer Experience: Tailor the shopping experience to customer preferences, driving engagement and loyalty.
Inventory Management: Data-driven insights aid in inventory forecasting, preventing stockouts and overstock situations.
Conversion Optimization: Analyze user behavior to optimize website elements and boost conversion rates.
Personalized Recommendations: Leverage data to provide customers with relevant product recommendations, increasing cross-selling and upselling opportunities.
Data-driven decision making is the compass that guides e-commerce success. By collecting, analyzing, and leveraging data, businesses can make informed choices that enhance customer experiences, streamline operations, and optimize strategies. The benefits extend beyond short-term gains, fostering a culture of continuous improvement and innovation. In a digital landscape where data is abundant, harnessing its power is not just a competitive advantage; it’s a prerequisite for businesses looking to thrive and remain relevant in the ever-evolving world of e-commerce.
Customer Segmentation
Personalization and Customer Segmentation: Crafting Tailored E-Commerce Experiences
In the dynamic realm of e-commerce, where customer preferences and expectations are evolving rapidly, personalization and customer segmentation have emerged as essential strategies for businesses to stand out, engage customers, and drive conversions. This comprehensive exploration delves into the intricacies of personalization and customer segmentation in e-commerce, emphasizing their significance, methods, benefits, and transformative impact on building lasting customer relationships and boosting business growth.
4.1 Understanding Personalization and Customer Segmentation: Personalization involves tailoring content, product recommendations, and experiences to individual customer preferences, behavior, and demographics. Customer segmentation, on the other hand, categorizes customers into distinct groups based on shared characteristics such as demographics, purchase history, and preferences.
4.2 The Significance of Personalization and Customer Segmentation:
Enhanced Customer Engagement: Personalized experiences resonate with customers, encouraging them to spend more time on your website, explore products, and interact with your brand.
Boosted Conversions: Relevant product recommendations and personalized offers increase the likelihood of conversions, as customers feel that their needs are understood.
Improved Customer Satisfaction: Personalized experiences cater to customer preferences, leading to higher satisfaction and a stronger emotional connection to the brand.
Higher Customer Retention: Personalization fosters loyalty and encourages repeat purchases, reducing churn rates and increasing customer lifetime value.
4.3 Methods for Implementing Personalization and Customer Segmentation:
Data Collection: Collect customer data through website interactions, purchase history, social media engagement, and surveys.
Demographic Segmentation: Divide customers based on age, gender, location, income, and other relevant demographics.
Behavioral Segmentation: Segment customers based on browsing behavior, purchase history, and interaction with marketing emails.
Psychographic Segmentation: Categorize customers based on lifestyle, values, interests, and personality traits.
Dynamic Content: Use data to display personalized content, such as product recommendations, tailored messages, and relevant promotions.
Email Personalization: Craft personalized email campaigns that address customers by their names and suggest products based on their preferences.
Retargeting: Display ads or send emails with products that customers have previously shown interest in.
4.4 Benefits of Personalization and Customer Segmentation:
Increased Conversions: Personalized product recommendations and content resonate with customers, leading to higher conversion rates.
Customer Loyalty: Personalization creates a sense of connection, fostering loyalty and encouraging repeat business.
Higher Average Order Value: Personalized cross-selling and upselling suggestions lead to larger purchases.
Reduced Abandonment: Relevant content and offers minimize cart abandonment rates by addressing potential objections.
Improved Customer Satisfaction: Meeting individual preferences enhances the overall shopping experience and satisfaction.
4.5 Transformative Impact on E-Commerce Success:
Unique Shopping Journeys: Personalization tailors each customer’s journey, making it more relevant and engaging.
Enhanced Customer Insights: Segmentation provides insights into each customer group’s behaviors, helping businesses make informed decisions.
Targeted Marketing: Personalized marketing campaigns lead to higher engagement and better results.
In the competitive landscape of e-commerce, personalization and customer segmentation are not just trends; they are imperative strategies for success. By leveraging data to deliver tailored experiences, businesses can forge meaningful connections with customers, drive conversions, and enhance loyalty. Implementing these strategies requires a deep understanding of customer needs, preferences, and behaviors, but the rewards are substantial—a more engaged customer base, increased revenue, and a brand that stands out in a crowded market. In the age of digital transformation, personalization and customer segmentation are not just options; they are the key to thriving in the ever-evolving world of e-commerce.
Benefits of Digital Marketing
Effective Digital Marketing: Navigating the Path to E-Commerce Success
In the rapidly evolving landscape of e-commerce, where online competition is fierce and consumer behaviors are constantly changing, effective digital marketing has become a cornerstone for businesses looking to not only survive but thrive. This comprehensive guide delves into the intricacies of effective digital marketing in the realm of e-commerce, exploring its significance, key strategies, channels, and transformative impact on driving brand visibility, customer engagement, and business growth.
5.1 Understanding the Significance of Effective Digital Marketing: Effective digital marketing encompasses a range of strategies aimed at reaching, engaging, and converting potential customers through various online channels. In the e-commerce context, it plays a pivotal role for several reasons:
Wider Reach: Digital marketing provides access to a global audience, enabling businesses to reach potential customers beyond geographical boundaries.
Targeted Approach: Precise targeting options allow businesses to tailor their marketing efforts to specific demographics, interests, and behaviors.
Measurable Results: Digital marketing campaigns offer detailed analytics and insights, enabling businesses to track performance and refine strategies.
Cost-Effectiveness: Compared to traditional marketing, digital marketing channels often provide more cost-effective solutions for reaching a larger audience.
5.2 Key Strategies for Effective Digital Marketing:
Search Engine Optimization (SEO): Enhancing your website’s visibility on search engines through strategic optimization of keywords, meta tags, and content. SEO drives organic traffic, increasing the likelihood of higher conversions.
Content Marketing: Creating valuable, relevant, and engaging content that addresses customer pain points, educates, and builds trust. Content marketing helps establish authority and attracts organic traffic.
Social Media Marketing: Leveraging social media platforms to engage with the audience, share content, and promote products. Tailor your approach to each platform and create compelling visuals and posts.
Pay-Per-Click (PPC) Advertising: Running targeted ads on platforms like Google Ads and social media networks. PPC allows for precise targeting and immediate visibility in search results.
Email Marketing: Building and nurturing a subscriber list for sending personalized emails that promote products, share updates, and offer exclusive deals. Email marketing maintains customer engagement and fosters loyalty.
Influencer Marketing: Partnering with influencers in your industry to promote your products to their engaged followers. Influencer marketing can expand your reach and build trust.
Affiliate Marketing: Collaborating with affiliates who promote your products in exchange for a commission on sales. This can lead to increased brand exposure and sales.
5.3 Selecting Digital Marketing Channels:
Search Engine Marketing (SEM): Using paid search ads (PPC) to display your website at the top of search engine results pages, increasing visibility and driving targeted traffic.
Social Media Platforms: Utilizing platforms like Facebook, Instagram, Twitter, and LinkedIn to connect with your audience, share content, and run targeted ads.
Email Campaigns: Sending well-crafted emails to your subscriber list, sharing promotions, product updates, and valuable content.
Content Platforms: Creating and sharing content on platforms like blogs, YouTube, and podcasts to attract and engage your target audience.
E-commerce Marketplaces: Leveraging platforms like Amazon, eBay, or Etsy to tap into their large user bases and sell your products.
5.4 Transformative Impact on E-Commerce Success:
Enhanced Brand Visibility: Effective digital marketing increases brand visibility across various channels, boosting recognition and recall among your target audience.
Customer Engagement: Engaging content and interactive campaigns foster meaningful connections with customers, encouraging them to interact and purchase.
Increased Conversions: Strategic digital marketing efforts guide customers through the purchasing journey, resulting in higher conversion rates.
Data-Driven Insights: Digital marketing provides detailed insights into customer behavior and campaign performance, enabling data-driven decision making.
Effective digital marketing is not just a strategy; it’s a necessity for e-commerce success. By utilizing SEO, content marketing, social media, email campaigns, and other strategies, businesses can build a strong online presence, connect with their target audience, and drive conversions. The digital landscape provides numerous opportunities to engage customers, build brand loyalty, and increase revenue. As consumer behaviors continue to evolve, businesses that embrace and adapt to effective digital marketing strategies will be best positioned to thrive and succeed in the competitive world of e-commerce.
Search Engine Optimization (SEO)
Conversion Rate Optimization: Elevating E-Commerce Success through Strategic Refinement
In the dynamic realm of e-commerce, where every click and interaction counts, conversion rate optimization (CRO) has emerged as a fundamental strategy for businesses to maximize their return on investment (ROI) and achieve sustainable growth. This comprehensive exploration delves into the intricacies of conversion rate optimization in e-commerce, emphasizing its significance, methodologies, key elements, and transformative impact on driving business success.
6.1 Understanding the Significance of Conversion Rate Optimization: Conversion rate optimization is the systematic process of refining various elements of a website or digital platform to increase the percentage of visitors who take a desired action, such as making a purchase, signing up for a newsletter, or downloading a resource. Its significance lies in its ability to turn existing traffic into valuable conversions, enhancing ROI without the need for additional marketing efforts.
6.2 The Importance of Conversion Rate Optimization:
Maximizing ROI: CRO focuses on making the most of your existing traffic, ensuring that a higher proportion of visitors convert into customers.
Reducing Costs: By improving conversion rates, businesses can reduce the cost per acquisition and allocate resources more efficiently.
Enhancing User Experience: CRO involves optimizing user experience, creating a positive and seamless journey that encourages conversions.
Gaining Competitive Edge: A website that is user-friendly and optimized for conversions sets your business apart from competitors.
6.3 Key Elements of Conversion Rate Optimization:
Data Analysis: Begin by analyzing your website’s current performance using analytics tools to identify bottlenecks and areas for improvement.
Goal Setting: Define specific goals for conversion, whether it’s completing a purchase, signing up for a newsletter, or another action.
User Experience (UX) Optimization: Focus on creating a seamless and intuitive user experience that guides visitors toward the desired action.
A/B Testing: Test variations of key elements such as headlines, call-to-action buttons, images, and layouts to determine which version yields higher conversions.
Landing Page Optimization: Craft landing pages that align with specific campaigns and highlight the value proposition, benefits, and call-to-action.
Clear Call-to-Action (CTA): Ensure that CTAs are prominent, well-worded, and strategically placed to guide users toward conversion.
6.4 Strategies for Effective Conversion Rate Optimization:
Analyze User Behavior: Use analytics tools to understand user behavior, identify drop-off points, and uncover insights into why visitors aren’t converting.
User Surveys and Feedback: Gather feedback from users to understand their pain points, preferences, and objections, then address these issues.
Page Load Speed Optimization: Slow-loading pages lead to higher bounce rates. Optimize images, minimize code, and leverage caching to improve load times.
Mobile Optimization: Ensure your website is fully responsive and optimized for mobile devices, as a growing number of users shop on smartphones and tablets.
Simplify Forms: Streamline checkout and sign-up forms to reduce friction and make the process user-friendly.
Social Proof: Display customer reviews, ratings, and testimonials to build trust and provide social proof of your product’s quality.
6.5 Transformative Impact on E-Commerce Success:
Increased Conversions: Optimizing the conversion funnel leads to a higher percentage of visitors taking the desired action, increasing conversions.
Enhanced User Satisfaction: A smooth and user-friendly experience fosters satisfaction and encourages repeat visits.
Reduced Bounce Rates: Addressing user pain points and optimizing design elements decreases bounce rates and keeps users engaged.
Improved ROI: Higher conversion rates mean that your marketing efforts yield better results without requiring additional traffic.
Conversion rate optimization is a continuous journey that aims to optimize the user experience and maximize the impact of your digital efforts. By leveraging data analysis, A/B testing, and strategic design adjustments, businesses can create a seamless journey that guides users toward the desired action. As user behaviors and expectations continue to evolve, CRO becomes an indispensable strategy for e-commerce success. Ultimately, conversion rate optimization is not just about increasing numbers; it’s about crafting a customer-centric experience that delights users and drives measurable business growth.
Customer Relationship Management
Customer Relationship Management: Nurturing Meaningful Connections for E-Commerce Success
In the ever-evolving landscape of e-commerce, where customer loyalty and engagement are paramount, effective Customer Relationship Management (CRM) has emerged as a cornerstone strategy for businesses aiming to forge lasting connections, drive conversions, and achieve sustainable growth. This comprehensive exploration delves into the intricacies of Customer Relationship Management in e-commerce, emphasizing its significance, key elements, strategies, and transformative impact on building brand loyalty and driving business success.
7.1 Understanding the Significance of Customer Relationship Management: Customer Relationship Management (CRM) is a strategic approach that focuses on managing and nurturing relationships with customers throughout their entire lifecycle – from the first interaction to post-purchase engagement. It involves understanding customer needs, preferences, and behaviors to create personalized experiences that foster loyalty and drive revenue.
7.2 The Importance of Customer Relationship Management:
Enhanced Customer Loyalty: Building strong relationships leads to higher customer retention rates, reducing churn and fostering long-term loyalty.
Improved Customer Satisfaction: By addressing customer needs and concerns promptly, CRM enhances satisfaction and builds positive perceptions of the brand.
Personalized Experiences: CRM allows businesses to offer personalized recommendations, content, and offers tailored to individual preferences.
Repeat Business: Positive customer experiences and personalized interactions encourage repeat purchases and contribute to higher customer lifetime value.
7.3 Key Elements of Effective Customer Relationship Management:
Data Collection and Management: Collect and manage customer data from various touchpoints, including purchases, interactions, and preferences.
360-Degree View of Customers: Centralize customer data to create a comprehensive profile that helps in understanding their behaviors, needs, and preferences.
Customer Segmentation: Categorize customers based on shared characteristics and behaviors to tailor marketing and communication strategies.
Communication and Engagement: Utilize various channels like email, social media, and chat to engage customers with relevant content and offers.
Customer Support and Service: Provide timely and effective customer support through multiple channels to address concerns and queries.
7.4 Strategies for Effective Customer Relationship Management:
Personalized Communication: Use customer data to send tailored messages, offers, and product recommendations that resonate with individual preferences.
Email Marketing Campaigns: Segment your email list and send personalized emails based on customer behavior and preferences.
Loyalty Programs: Implement loyalty programs that reward repeat customers with exclusive discounts, rewards, and special offers.
Social Media Engagement: Interact with customers on social media platforms, respond to comments and messages, and share user-generated content.
Feedback Collection: Seek feedback through surveys, reviews, and social media to understand customer sentiments and areas for improvement.
Omnichannel Experience: Ensure a seamless experience across different touchpoints, enabling customers to switch between platforms without disruption.
7.5 Transformative Impact on E-Commerce Success:
Enhanced Customer Retention: Effective CRM strategies lead to higher customer retention rates, increasing customer lifetime value.
Personalized Experiences: Customized interactions improve customer satisfaction and foster a sense of connection with the brand.
Repeat Purchases: Nurturing relationships encourages repeat business and reduces the need for continuous customer acquisition.
Positive Brand Perception: Exceptional customer service and personalized interactions contribute to a positive brand image.
In the digital age, effective Customer Relationship Management is a non-negotiable strategy for e-commerce success. By understanding and catering to customer needs, preferences, and behaviors, businesses can create personalized experiences that foster loyalty, encourage repeat purchases, and drive revenue growth. Implementing a robust CRM system requires data management, strategic communication, and a customer-centric approach. As competition intensifies and customer expectations evolve, businesses that prioritize customer relationship management will be well-positioned to thrive in the competitive landscape, building meaningful connections that transcend transactions and drive long-term success.
Multi-Channel Selling
Seamless Multi-Channel Selling: Orchestrating E-Commerce Success Across Platforms
In the rapidly evolving landscape of e-commerce, where consumer behaviors span multiple online platforms, seamless multi-channel selling has emerged as a strategic imperative for businesses seeking to expand their reach, engage customers, and drive conversions. This comprehensive exploration delves into the intricacies of seamless multi-channel selling, emphasizing its significance, benefits, challenges, strategies, and transformative impact on building brand visibility and achieving sustained growth.
8.1 Understanding the Significance of Seamless Multi-Channel Selling: Seamless multi-channel selling involves offering products across multiple online platforms, such as your own website, marketplaces, social media, and mobile apps. It aims to provide a consistent shopping experience regardless of the channel customers choose, meeting them where they are and catering to their preferences.
8.2 The Importance of Seamless Multi-Channel Selling:
Expanded Reach: Selling across multiple channels increases your brand’s exposure, reaching a wider audience and tapping into diverse customer segments.
Enhanced Customer Experience: Offering a consistent experience across channels fosters trust and customer loyalty by accommodating different shopping preferences.
Diversified Revenue Streams: Multiple channels diversify your revenue sources, reducing dependency on a single platform and spreading risk.
Improved Conversions: Engaging customers across various touchpoints increases the chances of conversions as they have more opportunities to interact and purchase.
8.3 Key Benefits of Seamless Multi-Channel Selling:
Brand Consistency: Maintain consistent branding, product information, and customer service across all platforms for a unified customer experience.
Enhanced Customer Engagement: Engaging customers on various platforms keeps your brand top-of-mind and encourages repeat visits.
Flexibility for Customers: Allow customers to shop when and where they prefer, whether it’s on a marketplace, social media, or your website.
Competitive Edge: Offering multiple channels sets you apart from competitors who may limit themselves to a single platform.
8.4 Challenges of Seamless Multi-Channel Selling:
Complex Inventory Management: Coordinating inventory across multiple channels requires accurate tracking to prevent overselling or stockouts.
Consistent Pricing: Maintaining consistent pricing across channels can be challenging, especially when accounting for platform fees.
Customer Service: Providing consistent customer support and addressing inquiries across various platforms can be demanding.
Data Integration: Integrating data from different channels into a unified system is crucial for informed decision-making.
8.5 Strategies for Implementing Seamless Multi-Channel Selling:
Platform Selection: Choose platforms that align with your target audience and products. This could include your own website, marketplaces (Amazon, eBay), social media (Instagram, Facebook), and mobile apps.
Unified Branding: Ensure consistent branding, imagery, and messaging across all channels to create a cohesive brand identity.
Centralized Inventory Management: Implement inventory management software that syncs stock levels across all platforms in real-time.
Integrated Analytics: Utilize analytics tools to track performance and customer behavior across all channels, enabling data-driven decision-making.
Cross-Promotion: Promote your channels within each other to encourage customers to explore your brand across various platforms.
8.6 Transformative Impact on E-Commerce Success:
Maximized Reach: Multi-channel selling increases your brand’s visibility, helping you tap into new customer segments.
Customer Convenience: Offering various channels accommodates different shopping preferences, enhancing customer satisfaction.
Increased Conversions: Engaging customers across multiple touchpoints increases the likelihood of conversions.
Diversified Revenue Streams: Relying on multiple channels diversifies your revenue streams, reducing risk associated with platform changes.
Seamless multi-channel selling is no longer a choice but a necessity for e-commerce success. By reaching customers across various online platforms, businesses can expand their reach, enhance customer engagement, and drive conversions. While challenges exist, such as inventory management and consistent pricing, the benefits of a unified customer experience and diversified revenue streams far outweigh the complexities. In a digital landscape where customer behaviors are constantly evolving, businesses that embrace seamless multi-channel selling will be best positioned to thrive, building a stronger brand presence and connecting with customers on their terms.
User-Generated Content
Influencer Partnerships and User-Generated Content: Amplifying E-Commerce Success through Authentic Engagement
In the dynamic world of e-commerce, where trust and authenticity are paramount, influencer partnerships and user-generated content (UGC) have emerged as powerful strategies for businesses to connect with customers on a personal level, build brand credibility, and drive conversions. This comprehensive exploration delves into the intricacies of influencer partnerships and UGC in e-commerce, emphasizing their significance, benefits, strategies, and transformative impact on creating meaningful connections and achieving sustainable growth.
9.1 Understanding the Significance of Influencer Partnerships and User-Generated Content: Influencer partnerships involve collaborating with individuals who have a significant and engaged online following to promote your products or brand. User-generated content, on the other hand, consists of content created by your customers, such as reviews, photos, and testimonials, which showcases authentic experiences with your products.
9.2 The Importance of Influencer Partnerships and User-Generated Content:
Trust and Credibility: Both influencer partnerships and UGC offer authentic perspectives that consumers trust more than traditional advertising.
Engagement and Connection: Influencers and UGC allow businesses to engage with customers on a personal level, creating meaningful connections.
Increased Conversion Rates: Genuine recommendations and real-life experiences from influencers and customers boost conversion rates.
Brand Awareness: Collaborating with influencers and sharing UGC can extend your brand’s reach to new audiences.
9.3 Benefits of Influencer Partnerships:
Targeted Reach: Partnering with influencers in your niche allows you to target a specific audience that aligns with your products.
Credibility and Authority: Influencers are trusted voices in their communities, and their endorsement lends credibility to your brand.
Engagement and Interaction: Influencers can facilitate two-way communication, fostering engagement and conversations around your products.
Content Creation: Influencers generate high-quality content that showcases your products in real-life scenarios.
9.4 Benefits of User-Generated Content:
Authenticity: UGC provides authentic reviews, testimonials, and images that showcase genuine customer experiences.
Community Building: UGC fosters a sense of community among customers, encouraging them to share their experiences.
Cost-Effective Marketing: UGC acts as free marketing material generated by your customers, reducing content creation costs.
Diverse Perspectives: UGC offers a diverse range of perspectives and use cases for your products.
9.5 Strategies for Effective Implementation:
Influencer Partnerships:
Relevance Matters: Choose influencers whose audience aligns with your target demographic and brand values.
Authentic Collaboration: Work with influencers who genuinely resonate with your products and can provide authentic endorsements.
Clear Guidelines: Establish clear expectations, guidelines, and objectives for the influencer partnership to ensure consistent messaging.
Long-Term Relationships: Nurture long-term relationships with influencers for consistent and authentic brand representation.
User-Generated Content:
Encourage Sharing: Encourage customers to share their experiences through reviews, photos, and social media posts.
Engage and Acknowledge: Interact with customers who create UGC, showing appreciation and building a sense of community.
Create Contests and Challenges: Organize contests or challenges that encourage customers to create and share UGC for a chance to win prizes.
Showcase UGC: Share customer-generated content on your social media, website, and marketing materials to celebrate and showcase authentic experiences.
9.6 Transformative Impact on E-Commerce Success:
Authentic Engagement: Influencer partnerships and UGC foster authentic engagement, building trust and strong customer relationships.
Increased Conversions: Recommendations from influencers and UGC act as social proof, boosting confidence and conversion rates.
Brand Advocacy: Customers who create UGC become brand advocates, promoting your products to their networks.
Community Building: Both strategies contribute to building a loyal community of customers who are emotionally invested in your brand.
Influencer partnerships and user-generated content are not just marketing strategies; they are bridges that connect businesses with customers in an authentic and meaningful way. By leveraging the credibility of influencers and harnessing the power of customer-generated content, businesses can create a stronger brand presence, foster engagement, and drive conversions. These strategies amplify customer voices, build trust, and contribute to a sense of community. As consumer behaviors continue to evolve, influencer partnerships and UGC will remain integral components of the e-commerce landscape, enabling businesses to create lasting connections and thrive in the ever-changing digital marketplace.
continuous innovation
Continuous Innovation and Adaptation: Thriving in the Evolving Landscape of E-Commerce
In the rapidly changing world of e-commerce, where consumer preferences, technology, and market dynamics are in constant flux, the concepts of continuous innovation and adaptation have become pivotal for businesses aiming to not only survive but excel. This comprehensive exploration delves into the intricacies of continuous innovation and adaptation in e-commerce, emphasizing their significance, strategies, benefits, and transformative impact on achieving sustainable growth and staying ahead of the competition.
10.1 Understanding the Significance of Continuous Innovation and Adaptation: Continuous innovation involves the ongoing development of new ideas, products, and strategies to meet evolving market demands and customer expectations. Adaptation, on the other hand, entails the ability to adjust and reorient business operations in response to changing circumstances and emerging trends. Both concepts are intertwined and essential for thriving in the e-commerce landscape.
10.2 The Importance of Continuous Innovation and Adaptation:
Competitive Advantage: Continuous innovation and adaptation give businesses an edge by enabling them to offer unique solutions and stay ahead of competitors.
Customer-Centricity: Adapting to changing customer preferences and behaviors ensures that businesses remain relevant and aligned with their target audience.
Resilience: An ability to adapt quickly to unexpected challenges, such as economic shifts or disruptions, enhances a business’s resilience.
Future-Proofing: Continuous innovation ensures that businesses are prepared to meet future market demands and capitalize on emerging opportunities.
10.3 Strategies for Continuous Innovation:
Market Research: Regularly conduct thorough market research to identify emerging trends, customer preferences, and unmet needs.
Creative Culture: Foster a culture that encourages employees to propose and explore new ideas, promoting innovation from within.
Product Development: Invest in R&D to create new products or enhance existing ones to cater to changing customer demands.
Collaboration: Collaborate with industry partners, startups, and tech companies to leverage new technologies and ideas.
Feedback Loop: Gather feedback from customers and analyze their suggestions to identify areas for improvement and innovation.
10.4 Strategies for Adaptation:
Agile Operations: Implement agile methodologies to quickly adjust to changing circumstances and make data-driven decisions.
Technology Integration: Embrace emerging technologies that enhance efficiency, streamline operations, and improve customer experiences.
Flexibility in Offerings: Be prepared to pivot or diversify your product offerings based on market demand and customer feedback.
Customer-Centric Approach: Continuously listen to customers, understand their evolving needs, and tailor your strategies accordingly.
10.5 Benefits of Continuous Innovation and Adaptation:
Relevance: Innovating and adapting keep your business aligned with current market trends and customer preferences.
Growth Opportunities: Continuously evolving offerings and strategies open doors to new revenue streams and market segments.
Resilience: The ability to adapt enables businesses to navigate unexpected challenges, maintaining stability and continuity.
Customer Loyalty: Providing innovative solutions and adapting to customer needs fosters loyalty and long-term relationships.
10.6 Transformative Impact on E-Commerce Success:
Sustained Growth: Continuous innovation and adaptation drive ongoing growth, ensuring your business remains competitive.
Future Preparedness: Innovating and adapting position your business to seize emerging opportunities and navigate future challenges.
Customer-Centricity: Evolving with customer preferences enhances satisfaction, loyalty, and positive brand perception.
Industry Leadership: Consistently innovating and adapting establish your brand as an industry leader and trendsetter.
Continuous innovation and adaptation are not just strategies; they are a mindset that positions businesses to thrive in the ever-changing e-commerce landscape. By embracing new ideas, technologies, and market dynamics, businesses can remain relevant, competitive, and customer-centric. These concepts empower businesses to create solutions that resonate with customers, adapt to shifting landscapes, and foster a culture of growth. As the e-commerce environment continues to evolve, continuous innovation and adaptation will remain fundamental drivers of success, enabling businesses to navigate uncertainties and capitalize on opportunities in the pursuit of sustainable growth.
Business Consultant
Closing remarks:
In the dynamic and competitive realm of e-commerce, the pursuit of success requires a strategic approach that leverages the power of innovation and consumer-centric practices. The exploration of the ten most profitable e-commerce strategies underscores the intricate tapestry of tactics that contribute to sustained growth and prosperity.
From embracing seamless multi-channel selling to harnessing the potential of influencer partnerships and user-generated content, these strategies create a holistic framework for businesses to thrive. The significance of a customer-centric foundation, driven by personalized experiences and data-driven insights, cannot be overstated. The ability to adapt and innovate in response to ever-evolving consumer behaviors and technological advancements becomes the bedrock upon which e-commerce excellence is built.
Balancing innovation with a deep understanding of the consumer journey and market trends, these strategies empower businesses to rise above the noise and stand out in the digital landscape. Niche selection, robust product research, and the optimization of user experience collectively elevate brand visibility and conversion rates, while effective digital marketing ensures the right message reaches the right audience.
Seizing the opportunities presented by data-driven decision-making and customer segmentation fuels engagement and loyalty, creating bonds that extend beyond transactions. Through continuous innovation and adaptation, businesses can future-proof their endeavors, ready to capitalize on emerging trends and navigate challenges.
The world of e-commerce is dynamic, ever-evolving, and rife with opportunities for those who dare to innovate and execute with excellence. The best 10 e-commerce strategies, when woven together strategically, form a comprehensive tapestry of success, illustrating that in a realm driven by consumer needs, ingenuity, and adaptability, there is no limit to what can be achieved. As the digital landscape continues to shift, these strategies stand as guideposts for businesses to chart their course towards profitability, growth, and a lasting impact.
Best 10 Most Profitable E-Commerce Strategies: Best 10 Most Profitable E-Commerce Strategies
*Author’s Short Profile:
Md. Joynal Abdin
Mr. Md. Joynal Abdin is a Business Consultant & Digital Marketer based in Dhaka, Bangladesh. He is also Co-Founder & CEO of Bangladesh Trade Center. Previously he served at Dhaka Chamber of Commerce & Industry (DCCI) as Executive Secretary; DCCI Business Institute (DBI) as Executive Director; SME Foundation as Deputy Manager; and the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) as Assistant Secretary.
The list of services Mr. Abdin is offering includes but not limited to Business Research and Documentations like Feasibility Study, Project Proposal Preparation, Writing Business Manual, Standard Operating Procedures etc.; Export Market Selection and Product Positioning at Home and Abroad; Buyers-Sellers Matchmaking; Website Development; Search Engine Optimization (SEO); and Social Media Marketing etc.
Best 10 Most Profitable E-Commerce Strategies: Best 10 Most Profitable E-Commerce Strategies
In the ever-evolving landscape of business and commerce, one thing remains constant: the crucial role of digital marketing in driving online success. As we navigate the dynamic year of 2023, mastering the intricacies of digital marketing has become more essential than ever before. The rapid advancements in technology, shifts in consumer behavior, and the ever-expanding online marketplace have ushered in a new era of challenges and opportunities for businesses striving to make their mark.
Gone are the days when traditional marketing strategies alone could guarantee a company’s growth and outreach. Today, the digital realm is where brands must establish their presence, engage their target audience, and convert leads into loyal customers. This journey, however, is far from straightforward. It demands a nuanced understanding of the digital landscape, a deep comprehension of consumer behavior, and an agile approach to staying ahead of the curve.
The purpose of this blog is to serve as your compass in this intricate digital ecosystem. We will delve into the strategies, trends, and best practices that can empower businesses to not only survive but thrive in 2023 and beyond. Whether you’re a seasoned marketing professional looking to refine your skills or an entrepreneur taking your first steps into the digital realm, this guide aims to provide insights that are both informative and actionable. You can adopt and implement following strategies for online success:
The Digital Landscape: Navigating the Complex Terrain
As we step into 2023, the digital landscape has become more diverse and intricate than ever. From social media platforms to search engines, emails marketing to influencer collaborations, the avenues through which businesses can engage with their audience have multiplied. Understanding where to invest your resources and efforts is a fundamental aspect of digital marketing mastery.
Search engine algorithms continue to evolve, shaping the way content is discovered online. Content marketing, once a supportive tactic, now takes center stage in driving organic traffic and establishing a brand’s authority. Additionally, the rise of voice search and mobile optimization has transformed the way consumers interact with digital content, emphasizing the need for adaptability in your strategies.
Data-Driven Decision Making: Harnessing Insights for Success
In the digital age, information is power, and the vast amount of data available can be harnessed to make informed decisions. Analyzing user behavior, engagement metrics, and conversion rates provides valuable insights into the effectiveness of your campaigns. This data-driven approach is pivotal in optimizing your strategies and ensuring you’re allocating resources where they yield the highest return on investment.
The use of artificial intelligence and machine learning further amplifies the potential of data analysis. These technologies enable predictive analytics, helping you anticipate market trends and consumer preferences, enabling you to tailor your marketing efforts accordingly. From personalized recommendations to chatbots that enhance customer support, AI is reshaping the way businesses interact with their audience.
Content Resonance: Crafting Compelling Digital Narratives
In an era saturated with information, the battle for attention is fiercer than ever. Crafting compelling and resonant content is the cornerstone of successful digital marketing. Whether it’s a blog post, a social media update, or a video, your content must not only capture attention but also engage, educate, and inspire your audience.
Storytelling remains a powerful tool in creating emotional connections with your audience. Through narratives that resonate with your brand’s values and the aspirations of your audience, you can foster a sense of loyalty and community. Additionally, interactive content such as quizzes, polls, and user-generated campaigns enhance engagement and create memorable experiences.
Omni-Channel Synergy: Orchestrating a Cohesive Brand Experience
The modern consumer is no longer confined to a single platform or device. They seamlessly transition between various touchpoints, expecting a consistent and cohesive brand experience. Mastering digital marketing in 2023 involves orchestrating an omni-channel strategy that seamlessly integrates your brand message across all platforms.
Social media, email, website, and physical touchpoints should all align with your brand’s identity, voice, and values. This not only enhances recognition but also fosters trust and loyalty. An omni-channel approach ensures that your audience receives a unified experience regardless of where they engage with your brand.
Embracing Change: Agility in the Face of Evolution
The only constant in the digital realm is change. Strategies that yield success today might become obsolete tomorrow. This underscores the importance of agility and adaptability in your digital marketing approach. Staying informed about emerging trends, experimenting with new tools, and being willing to pivot when necessary is key to maintaining a competitive edge.
In short, the digital marketing landscape of 2023 is a dynamic and exciting arena. Mastering it requires a multi-faceted approach that encompasses understanding the digital terrain, harnessing the power of data, crafting resonant content, orchestrating an omni-channel strategy, and embracing change. This blog will be your guide on this journey, offering insights, strategies, and real-world examples to empower you to navigate the challenges and harness the opportunities that lie ahead. So, let’s embark on this expedition to master digital marketing and achieve online success in the vibrant year of 2023 and beyond.
Mastering Digital Marketing
The Digital Landscape: Navigating the Complex Terrain
In the contemporary world, the digital landscape has undergone a monumental transformation, fundamentally altering the way individuals and businesses interact, communicate, and conduct commerce. As we find ourselves in the year 2023, a deeper exploration of the digital landscape becomes imperative to grasp the dynamics that shape online interactions, commerce, and communication. This section delves into the multifaceted dimensions of the digital landscape, shedding light on its various elements and their implications for digital marketing strategies.
1.1 Multiplicity of Platforms: The digital landscape is marked by an expansive assortment of platforms, each catering to specific types of interactions and content consumption. Social media networks have proliferated, each with its unique characteristics and audience demographics. From the image-focused allure of Instagram to the professional networking prowess of LinkedIn, these platforms present businesses with an array of avenues to connect with their target audience.
Search engines continue to play a pivotal role in the digital landscape. Search engine optimization (SEO) remains essential for ensuring that businesses’ online content is discoverable and accessible. The intricacies of search algorithms continue to evolve, influencing how content is ranked and displayed to users. Thus, understanding and adapting to these algorithmic shifts are integral to maintaining online visibility.
1.2 Content Reigns Supreme: In this digital era, content is unequivocally the king. Content marketing has become more than just a supplementary strategy; it is now the bedrock of online engagement and brand establishment. The production of high-quality, relevant, and valuable content serves multiple purposes: it informs, educates, entertains, and engages audiences. Blog posts, videos, infographics, podcasts, and interactive content have emerged as tools for building and sustaining meaningful connections with consumers.
User-generated content also deserves a notable mention in the digital landscape. Customers’ reviews, testimonials, and social media posts hold immense sway over the purchasing decisions of prospective buyers. This democratization of content creation empowers consumers and underscores the significance of providing exceptional products and services that naturally generate positive sentiments.
1.3 The Mobile Revolution: The ubiquity of smartphones has irrevocably shifted the digital landscape. Mobile devices are now the primary means through which users access online content. Consequently, mobile optimization has ceased to be optional; it’s a necessity. Websites and applications must be designed with mobile responsiveness in mind to ensure seamless navigation and an optimal user experience across various devices.
Moreover, the rise of mobile applications has introduced a new dimension to consumer engagement. Brands that leverage well-designed and user-friendly apps can foster deeper connections with their customers, delivering tailored experiences and providing immediate access to their products and services.
1.4 Video Dominance: The dominance of video content stands as a defining feature of the digital landscape. The popularity of platforms like YouTube and the integration of video features on social media networks underscore the power of visual storytelling. Videos have the ability to convey complex ideas, evoke emotions, and establish a genuine connection with the audience.
Live streaming, in particular, has gained traction as a means of real-time engagement. Brands can use live videos to host Q&A sessions, product launches, behind-the-scenes glimpses, and interactive events. This form of content not only offers immediacy but also generates a sense of authenticity and unfiltered connection.
1.5 The E-Commerce Ecosystem: The e-commerce landscape has evolved into a bustling marketplace, replete with opportunities and challenges. Online shopping has become a norm, accelerated further by global events that have driven the adoption of digital transactions. This shift necessitates a strategic focus on creating a seamless online shopping experience, from intuitive website navigation to secure payment gateways.
Personalization and recommendation engines are at the forefront of enhancing the e-commerce experience. By analyzing user behavior and purchase history, brands can tailor product recommendations, increasing the likelihood of conversions and fostering customer loyalty.
The digital landscape of 2023 is a dynamic tapestry interwoven with numerous threads, each representing a facet of online interactions and engagement. From the proliferation of platforms to the significance of content, mobile dominance, video’s ascendancy, and the thriving e-commerce ecosystem, every aspect contributes to the complexity and vibrancy of this landscape.
In the realm of digital marketing, understanding and harnessing the various elements of this landscape are vital for devising effective strategies. Adapting to evolving algorithms, producing engaging content, optimizing for mobile devices, incorporating video, and navigating the intricacies of e-commerce are all integral to achieving online success.
As the digital landscape continues to evolve, businesses must remain agile, observant, and innovative. By embracing the ever-changing dynamics of this landscape, marketers can position themselves to not only survive but thrive in the intricate and exciting digital terrain of 2023 and beyond.
Landscape of Bangladesh
Data-Driven Decision Making: Harnessing Insights for Optimal Outcomes
In the vast and intricate landscape of the digital age, information has become a currency of paramount importance. The ability to collect, analyze, and extract insights from data has revolutionized how businesses operate, make strategic decisions, and achieve their objectives. In the year 2023, data-driven decision-making stands as a cornerstone of success, enabling organizations to navigate complexity and uncertainty with precision and agility. This section delves into the intricacies of data-driven decision making, highlighting its significance, methodologies, and the transformative impact it has on businesses across industries.
2.1 The Power of Data: Data is not merely a collection of numbers and statistics; it is a treasure trove of insights that reveal patterns, trends, and correlations that would otherwise remain hidden. The proliferation of digital interactions has generated an unprecedented volume of data, encompassing customer behavior, engagement metrics, purchasing patterns, and much more. This data serves as a roadmap to understanding consumer preferences, market dynamics, and the effectiveness of various business strategies.
The utilization of data is not confined to reactive decision making; it extends to proactive planning and strategy formulation. Organizations that harness the power of data can predict market trends, anticipate shifts in consumer preferences, and optimize their operations to align with emerging opportunities.
2.2 Data Collection and Analysis: The journey of data-driven decision making commences with the systematic collection and aggregation of relevant data points. This data can originate from various sources, including website analytics, social media interactions, customer surveys, and sales records. The advent of advanced tools and technologies facilitates real-time data capture, enabling organizations to monitor and respond to changes promptly.
Once data is collected, the analysis phase takes center stage. Data analysis involves sorting, organizing, and interpreting data to extract meaningful insights. This process often employs statistical techniques, machine learning algorithms, and data visualization tools to transform raw data into actionable intelligence. From identifying customer segments to uncovering correlations between variables, data analysis forms the bedrock of informed decision making.
2.3 Personalization and Customer Insights: Data-driven decision making allows businesses to personalize their interactions with customers, tailoring their offerings and communication to individual preferences. By analyzing historical purchasing behavior and engagement patterns, organizations can recommend products, services, and content that resonate with each customer. Personalization not only enhances customer satisfaction but also boosts the likelihood of conversion and brand loyalty.
Customer insights derived from data also aid in refining products and services. By understanding customer pain points, preferences, and feedback, businesses can iterate and innovate, ensuring that their offerings remain relevant and competitive in a rapidly evolving marketplace.
2.4 Performance Evaluation and Optimization: Data-driven decision making is synonymous with continuous improvement. Organizations can assess the performance of various initiatives and strategies by analyzing relevant metrics. From website traffic and conversion rates to email open rates and social media engagement, each metric provides valuable insights into the effectiveness of specific actions.
This approach enables businesses to optimize their strategies in real-time. If a marketing campaign is underperforming, for instance, data can reveal the specific pain points, allowing marketers to make necessary adjustments promptly. This agility ensures that resources are allocated to activities that yield the highest returns, enhancing overall efficiency and effectiveness.
2.5 Predictive Analytics and Future Insights: One of the most remarkable aspects of data-driven decision making is its capacity for predictive analytics. By analyzing historical data and identifying patterns, businesses can make informed predictions about future trends and outcomes. For example, retailers can anticipate peak shopping seasons, enabling them to stock up on popular products and adjust their marketing efforts accordingly.
Furthermore, predictive analytics aids in risk assessment and strategic planning. Businesses can identify potential challenges and opportunities on the horizon, enabling them to formulate proactive strategies that mitigate risks and capitalize on emerging trends.
2.6 Ethical Considerations and Data Privacy: While data-driven decision making offers incredible benefits, it also raises important ethical considerations, particularly concerning data privacy and security. As businesses collect and analyze customer data, they must prioritize transparency, consent, and safeguarding sensitive information. Striking a balance between deriving insights from data and respecting individuals’ privacy rights is essential to maintaining trust and legitimacy.
In the digital landscape of 2023, data-driven decision making isn’t a mere option; it’s a strategic imperative. The ability to harness the power of data enables businesses to make informed choices, optimize operations, personalize experiences, and predict future trends. As organizations navigate an increasingly complex and fast-paced environment, data-driven insights serve as beacons, guiding them toward optimal outcomes and sustainable success.
By collecting, analyzing, and acting upon data, businesses can anticipate shifts in consumer behavior, adapt to market dynamics, and innovate with precision. As technology continues to evolve, the role of data in decision making will only become more prominent, reshaping industries and propelling organizations toward new heights of competitiveness and innovation. In an era where data reigns supreme, those who master the art of data-driven decision-making stand poised to excel in the dynamic landscape of 2023 and beyond.
Data-Driven Decision Making
Content Resonance: Crafting Meaningful Connections in the Digital Age
In the expansive realm of the digital landscape, where information flows ceaselessly and attention spans are fleeting, the concept of content resonance emerges as a beacon of strategic significance. Content resonance transcends the mere creation of text, images, and videos—it encompasses the art of crafting messages that not only capture attention but also resonate deeply with audiences, fostering meaningful connections and driving engagement. In the year 2023, as content inundates every digital platform, understanding and harnessing the power of content resonance is paramount for individuals and businesses alike. This section delves into the intricacies of content resonance, exploring its core elements, strategies, and the profound impact it has on digital marketing and communication.
3.1 The Essence of Content Resonance: Content resonance extends beyond superficial engagement metrics; it delves into the realm of emotions, values, and relevance. When content resonates with an audience, it evokes emotions, taps into shared experiences, and aligns with their aspirations and beliefs. This resonance generates a sense of connection, prompting audiences to not only consume content but also to share, comment, and engage with it on a deeper level.
At the heart of content resonance lies authenticity. Authentic content speaks to the genuine nature of a brand or individual, fostering a sense of trust and credibility. In an era where consumers seek authenticity and transparency, resonant content becomes a powerful tool for establishing and nurturing relationships.
3.2 Understanding the Audience: Creating resonant content begins with a deep understanding of the target audience. Businesses and content creators must invest time in researching their audience’s demographics, psychographics, pain points, aspirations, and preferred communication styles. This knowledge forms the foundation upon which resonant content is built.
Empathy plays a pivotal role in this process. By putting themselves in the shoes of their audience, content creators can better anticipate their needs and desires, tailoring content that speaks directly to their concerns and interests. Empathetic content is relatable, demonstrating that the creator understands and cares about their audience’s experiences.
3.3 Storytelling as a Resonance Tool: Storytelling is an age-old practice that continues to hold immense power in the digital age. Stories have the capacity to captivate, inspire, and create emotional connections. Through narratives, brands and individuals can convey their values, share relatable experiences, and highlight their unique journeys.
Effective storytelling for content resonance involves identifying common human experiences that align with a brand’s mission or message. Whether it’s a personal anecdote, a customer success story, or a brand’s origin narrative, storytelling can imbue content with authenticity and emotional resonance, leaving a lasting impact on the audience.
3.4 Relevance and Value: Resonant content is not only emotionally engaging but also inherently valuable to the audience. It addresses their needs, answers their questions, and provides solutions to their problems. Content creators should focus on delivering actionable insights, practical tips, and thought-provoking perspectives that enrich the audience’s knowledge or experience.
Moreover, timeliness and relevance are key factors in content resonance. Crafting content that aligns with current events, trends, or seasonal interests demonstrates a keen awareness of the audience’s context and positions the content as a valuable resource in the moment.
3.5 Interactive and User-Generated Content: Content resonance is often amplified when audiences are actively involved. Interactive content, such as quizzes, polls, surveys, and contests, not only engages audiences but also provides a platform for them to participate and share their opinions. This interactivity fosters a sense of ownership and belonging, enhancing the resonance of the content.
User-generated content is another avenue for deepening content resonance. When customers or followers contribute their own content—reviews, testimonials, photos, etc.—they become part of the brand narrative. This not only builds trust but also strengthens the emotional connection between the audience and the brand.
3.6 Measuring and Adapting: Resonance isn’t always quantifiable through traditional metrics alone. While engagement metrics like likes, shares, and comments offer insights, the true impact of content resonance goes beyond numerical values. Instead, it’s measured in the sentiment it generates, the conversations it sparks, and the lasting impression it leaves.
Monitoring audience feedback, sentiment analysis, and qualitative interactions can provide a more holistic understanding of content resonance. And based on this feedback, content creators can refine their strategies and adapt their messaging to better align with audience preferences and values.
In the dynamic digital landscape of 2023, content resonance stands as a foundational principle that differentiates between mere content creation and strategic engagement. Crafted with empathy, authenticity, and a profound understanding of the audience, resonant content transcends the ephemeral noise of the digital realm, forging genuine connections and eliciting emotional responses.
By recognizing the power of storytelling, delivering relevance and value, encouraging interactivity, and fostering user-generated content, content creators and businesses can create a symphony of resonance that resonates deeply with their audience. As we navigate the ever-evolving digital landscape, mastering the art of content resonance is not only a means to capture attention but a pathway to cultivating lasting relationships, driving engagement, and leaving an indelible mark on the hearts and minds of those who engage with the content.
Content Resonance
Omni-Channel Synergy: Creating a Unified Brand Experience in the Digital Era
In the interconnected world of the digital age, where consumers traverse a multitude of platforms and devices, the concept of omni-channel synergy has emerged as a strategic imperative for businesses aiming to create a cohesive and impactful brand presence. In the year 2023, as digital interactions continue to shape consumer behavior, mastering omni-channel synergy is not just a choice; it’s a necessity for businesses seeking to establish and maintain meaningful connections with their audience. This section delves into the nuances of omni-channel synergy, exploring its significance, strategies, and the transformative impact it has on shaping seamless and memorable brand experiences.
4.1 Defining Omni-Channel Synergy: Omni-channel synergy goes beyond mere multi-channel presence. While multi-channel refers to having a presence on various platforms, omni-channel synergy involves seamlessly integrating these platforms to provide customers with a consistent and unified brand experience. Whether a customer interacts with a brand through a physical store, a website, social media, a mobile app, or any other touchpoint, the experience should be cohesive, synchronized, and tailored to their preferences.
The goal of omni-channel synergy is to ensure that customers perceive and interact with a brand as a single entity, regardless of the platform or device they choose. This not only enhances brand recognition but also fosters trust, loyalty, and a sense of connection.
4.2 Mapping the Customer Journey: Central to achieving omni-channel synergy is a comprehensive understanding of the customer journey. Businesses must map out the various touchpoints and interactions that customers have with their brand—from initial discovery to purchase and post-purchase support. By identifying these touchpoints, businesses can strategically design an integrated experience that seamlessly transitions customers from one platform to another.
A holistic view of the customer journey also allows businesses to identify potential pain points or gaps in the experience. These insights can then be used to streamline processes, optimize interactions, and enhance the overall customer experience.
4.3 Consistency in Brand Messaging: A key element of omni-channel synergy is maintaining consistency in brand messaging across all platforms. The brand’s voice, tone, values, and visual identity should remain uniform, ensuring that customers recognize the brand regardless of where they encounter it. Inconsistencies in messaging can lead to confusion and dilution of brand identity.
Additionally, businesses should adapt their messaging to suit the nuances of each platform while maintaining the core brand essence. For example, while the messaging on a social media platform might be more informal, the messaging on an official website could be more professional. The key is to strike a balance between adaptation and maintaining the core brand identity.
4.4 Seamlessness in Transition: One of the challenges in achieving omni-channel synergy is ensuring a seamless transition for customers as they move between platforms. Customers should be able to start an interaction on one platform and seamlessly continue it on another without losing context. For instance, if a customer adds items to their cart on a mobile app, those items should still be in the cart when they log in to their account on the website.
Technological solutions such as single sign-on (SSO), cross-platform data synchronization, and real-time updates are crucial in ensuring a frictionless transition for customers. Businesses must invest in robust technology infrastructure to enable this level of seamless integration.
4.5 Personalization and Contextualization: Omni-channel synergy thrives when it is accompanied by personalization and contextualization. Businesses should leverage data insights to tailor the customer experience based on individual preferences, purchase history, and behavior. This personal touch not only enhances customer satisfaction but also deepens the emotional connection with the brand.
For instance, sending personalized recommendations, targeted offers, and relevant content based on the customer’s preferences can significantly enhance the omni-channel experience. Contextualization involves delivering the right content at the right time in the customer journey, ensuring that interactions are relevant and valuable.
4.6 Feedback and Continuous Improvement: The pursuit of omni-channel synergy is an ongoing endeavor. Businesses should actively seek feedback from customers regarding their experiences across various platforms. This feedback can provide invaluable insights into areas that require improvement, identify new opportunities, and ensure that the omni-channel strategy remains aligned with evolving customer expectations.
Continuous improvement involves analyzing data, monitoring engagement metrics, and iterating on strategies to enhance the omni-channel experience. A culture of adaptability and responsiveness is key to maintaining a successful omni-channel synergy strategy.
In the dynamic digital landscape of 2023, omni-channel synergy stands as a testament to a brand’s commitment to delivering exceptional customer experiences. By seamlessly integrating platforms, maintaining consistency in messaging, ensuring smooth transitions, personalizing interactions, and embracing continuous improvement, businesses can create a unified brand presence that resonates deeply with customers.
Omni-channel synergy isn’t just about technology; it’s about strategy, empathy, and the art of understanding and meeting customers’ needs across various contexts. As consumers seamlessly move between platforms and devices, those businesses that master the art of omni-channel synergy are poised to thrive in an environment where memorable brand experiences and cohesive interactions are the hallmarks of success.
Omni-Channel Synergy
Embracing Change: Navigating Evolution in the Digital Landscape
In the rapidly evolving landscape of the digital era, the concept of embracing change has emerged as a fundamental prerequisite for success. The year 2023 brings with it a relentless stream of technological innovations, shifts in consumer behavior, and dynamic market dynamics. In this environment, individuals and businesses that are agile, adaptable, and open to change stand poised to not only survive but thrive. This section delves into the multifaceted dimensions of embracing change, exploring its significance, strategies, and the profound impact it has on navigating transformation in the digital landscape.
5.1 The Imperative of Adaptability: Change is an inherent aspect of the digital landscape. The rapid pace of technological advancement, emerging market trends, and evolving consumer preferences all contribute to an environment that is in constant flux. Embracing change is not merely a choice; it’s an imperative for individuals and businesses seeking to remain relevant and competitive.
The ability to adapt is what differentiates between those who flourish and those who falter. Whether it’s staying ahead of algorithm updates, incorporating new communication tools, or pivoting in response to unforeseen events, adaptability is the compass that guides businesses through uncertainty.
5.2 Continuous Learning and Skill Development: Embracing change requires a commitment to continuous learning and skill development. In the digital landscape, where the shelf life of knowledge is shrinking, individuals and businesses must invest in staying updated with the latest trends, tools, and best practices. This involves regularly seeking out educational resources, attending workshops, and engaging in online courses.
The willingness to learn extends beyond technical skills; it also encompasses an openness to acquiring new perspectives and insights. Industries are evolving, and those who are willing to embrace diverse viewpoints are better positioned to anticipate shifts and make informed decisions.
5.3 Agile Strategy Formulation: Static business plans and rigid strategies are ill-suited for the digital landscape. Embracing change entails an agile approach to strategy formulation. Businesses must be prepared to adjust their plans based on new data, emerging trends, and customer feedback. An agile strategy allows for quick iterations and course corrections, ensuring that actions remain aligned with objectives.
This flexibility enables businesses to capitalize on emerging opportunities and pivot away from initiatives that are no longer effective. The ability to pivot swiftly can be the difference between being left behind and leading the way.
5.4 Innovating with Purpose: Embracing change is not merely about following the latest trends; it’s about innovative thinking with purpose. Innovation should be driven by a deep understanding of customer needs and a commitment to providing value. Businesses should actively seek out opportunities to improve processes, enhance products or services, and create new avenues for engagement.
Strategic innovation involves balancing experimentation with calculated risk-taking. It requires a willingness to step out of comfort zones and explore new territories, all while keeping the end user’s experience at the forefront.
5.5 Data-Driven Decision Making: Change often brings uncertainty, and data-driven decision making becomes a guiding light in such situations. Data provides insights that can illuminate the path forward, helping businesses understand shifts in consumer behavior, market trends, and the effectiveness of various strategies. By analyzing data, businesses can make informed decisions that are grounded in evidence rather than assumptions.
Data-driven decision making also involves the willingness to acknowledge when something isn’t working and having the courage to pivot. This requires humility and a commitment to growth over ego.
5.6 Cultural Shifts and Change Leadership: Embracing change is not solely a matter of adopting new tools or strategies; it’s also about cultivating a cultural shift within an organization. Change leadership involves fostering an environment where experimentation is encouraged, failure is seen as a learning opportunity, and adaptability is celebrated.
Leaders play a pivotal role in setting the tone for change. They must lead by example, demonstrating a willingness to evolve, learn, and embrace new approaches. By creating a culture of continuous improvement and openness to change, organizations can navigate transformation more effectively.
In the dynamic digital landscape of 2023, embracing change is a non-negotiable attribute for individuals and businesses alike. The ability to adapt, learn, innovate, and make data-driven decisions is what separates those who thrive from those who struggle. As technology continues to redefine industries and consumer expectations evolve, the capacity to embrace change becomes the cornerstone of sustained success.
In the face of uncertainty and complexity, those who view change as an opportunity rather than a challenge are better equipped to navigate the digital landscape with resilience and purpose. By embracing change, individuals and businesses can position themselves to harness the transformative potential of the digital era and emerge as leaders in a world defined by perpetual evolution.
Embracing Change
Closing remarks:
As we conclude our exploration of “Mastering Digital Marketing: Strategies for Online Success in 2023,” we find ourselves at the intersection of innovation, strategy, and opportunity. The dynamic landscape of the digital era demands an unwavering commitment to understanding, adapting, and thriving in an ever-evolving ecosystem.
In this journey, we’ve delved into the intricacies of digital marketing, unraveling the significance of content resonance, data-driven decision making, omni-channel synergy, embracing change, and much more. We’ve discovered that success in the digital realm isn’t just about tactics; it’s about creating meaningful connections, harnessing insights, crafting cohesive experiences, and navigating transformation with agility.
As you embark on your digital marketing endeavors, remember that each strategy discussed here is a piece of a comprehensive puzzle. Success doesn’t hinge on a single element but on the harmonious integration of these strategies into a unified approach that resonates with your audience, reflects your values, and adapts to the ever-changing landscape.
In the vibrant year of 2023 and beyond, the opportunities within the digital landscape are boundless. By mastering the art of digital marketing, you’re equipping yourself with the tools to not only survive but to thrive. Whether you’re a seasoned marketer refining your skills or a newcomer stepping onto the digital stage, the insights shared here serve as a compass, guiding you toward online success.
The digital realm awaits your creative endeavors, your strategic insights, and your willingness to embrace change. The possibilities are limitless, and as you navigate this digital journey, remember that continuous learning, adaptability, and a deep understanding of your audience will be your North Star.
Thank you for embarking on this exploration with us. May your digital marketing efforts in 2023 be marked by resonance, innovation, synergy, adaptability, and, above all, remarkable success.
Mastering Digital Marketing: Strategies for Online Success in 2023: Mastering Digital Marketing: Strategies for Online Success in 2023
*Author’s Short Profile:
Md. Joynal Abdin
Mr. Md. Joynal Abdin is a Business Consultant & Digital Marketer based in Dhaka, Bangladesh. He is also Co-Founder & CEO of Bangladesh Trade Center. Previously he served at Dhaka Chamber of Commerce & Industry (DCCI) as Executive Secretary; DCCI Business Institute (DBI) as Executive Director; SME Foundation as Deputy Manager; and the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) as Assistant Secretary.
The list of services Mr. Abdin is offering includes but not limited to Business Research and Documentations like Feasibility Study, Project Proposal Preparation, Writing Business Manual, Standard Operating Procedures etc.; Export Market Selection and Product Positioning at Home and Abroad; Buyers-Sellers Matchmaking; Website Development; Search Engine Optimization (SEO); and Social Media Marketing etc.
Mastering Digital Marketing: Strategies for Online Success in 2023: Mastering Digital Marketing: Strategies for Online Success in 2023
Like many other developing countries, Light Engineering sectors(LEIs) is an important manufacturing sector of Bangladesh that occupy strong and vital position in the economy of the country. It prudently acts as feeder or support industries to all other industries to all other industries and plays a vital role in the socio-economic development of the country. These industries have potentials to make significant contribution towards technological and economic development along with wide opportunities for employment generation. Small industries are engaged in manufacturing various import-substitute products and thus saving valuable foreign currency. Manufacturing and processing activities in small and micro engineering enterprises contribute to the livelihood of huge number of poorest citizen.
There are certain socio-economic advantages that the LEIs enjoy over the large-scale industrial units. The advantages are: lower capital investment, lower job-creation cost, low risk factor, shorter start-up period, lower capital output ratio., less management problem, lower energy cost, moderate infrastructure requirement, promotion of entrepreneurial talents, more environment friendly production process, and promotion of agro-industrial linkages.
In Bangladesh, there are hundreds of roadside light engineering workshop scattered all over the country, starting from small towns to metropolitan cities like Dhaka, Chittagong, Rajshahi and Khulna. Some are equipped with only an electric small size welding machine, various types of horizontal, vertical and turret lathe machines, gas, electric and ac welding sets, various type of drilling machines and grinders, etc. These small workshops make substantial contribution to gross domestic products (GDP) and create employment opportunities. But unfortunately these industries could not prosper and develop as it should have been. Due to many reasons large numbers of small industries and enterprises in the country had to curtail or stop their activities.
Light Engineering Sectors in Bangladesh
Perspective of LEIs in Bangladesh
The SMEs sector-as a whole provides over 87 per cent of industrial value added goods (1) There are lack of information about total number and types of small firms existing presently in Bangladesh. However, according to survey on small industries done by Bangladesh Small & Cottage Industries Corporation (BSCIC), it was revealed that there were total 197 types of small industries with total 38294 industries in the country (BSCIC Survey report, 1994). (2) An estimate shows that presently there are about 60,000 small industries in the country. Among them, Light Engineering Industries are deemed to be approximately 25% i.e., LEI are about 15000. In addition, evidence suggests that there are over 347,000 cottage industrial units and a large number of handloom and power loom enterprises. But as per report of BEIOA (Bangladesh Engineering Industries Owner Association), there are total about 40,000 LEIs in the country generating 50,000 employment per year.
Definition of Light Engineering Industries(LEIs)
LEIs corresponds to those engineering industries that posses smaller capital investment and falls in the gamut from cottage industries to small industries (cottage and small industries have been defined in Industrial Policy –2005 .In Industrial Policy 2005 the Light engineering sectors has been included in the list of thrust sectors category. LEIs includes- all kinds of ferrous and non-ferrous metal mechanical products, machinery (electrical and non-electrical), spare parts, equipment, instrument, parts of mechanical system, electrical and electro-mechanical products, electronic products, machine parts or parts of manufacturing process that is made of ceramics, rubber, plastic, wood, glass etc. Repair, maintenance, erection, installation, fabrication, support service, consultancy etc. are service variety in the light engineering sector. In Export Policy 2003-2006 LEIs is considered as one of the highest priority sector.
Problems of Light Engineering Industries in Bangladesh
Raw materials:
High price of raw materials
Required raw materials are not Unavailability of the required raw materials
Scarcity of quality raw materials in the local market
Finance:
Lengthy and cumbersome procedure to receive bank loan
Difficulties to get required amount of bank loan
Non-availability of sufficient working capital
Low tariff rate of imported goods that are competing with the local ones
Difficult to get financial help for technological innovation, development and for big investment
Non-availability of venture capital
High rate of interest on bank loan
Innovation promotion and management:
Non-availability of metal testing facility. Difficult to identify the metal and its quality
Non-availability of efficient and skilled manpower in many cases
Sometimes, space is not available or sufficient for extension of the workshop
Lack of specified policies for price determination of a product
Difficulty to get Govt, contracts.
inadequate electricity supply
Non-availability of heat treatment facility
Durability of the products become low due to lack of tempering facility
Lack of skilled manpower required for product diversification
Due to limited purchasing capacity of market it is not possible to produce quality products with full production capacity
Lack of designing capability
Manual in Bangla on production and technology is not normally available in the market
Lack of standard & quality of product
Lack of knowledge how and where to patent the product
Light Engineering Sectors in Bangladesh
Marketing
The price of local goods is high in comparison with foreign goods due to high production cost of local goods. Thus local goods cannot compete with the foreign goods
Lack of facility or capability of the owner to disseminate information about the workshop and its products.
Priority sub sectors of LEIs may be promoted:
The following sub sectors of LEIs to be upgraded so that these can produce export quality products:
Automobile Sector: Automobile spare parts has got great export market potential around the world. This sub sector includes Cylinder kit, radiator, engine filters etc.
Marine engine spare parts: Marine engine spare parts includes gear, pinion, crankshaft, axle, engine head etc.
Railway spare parts. This sub sector includes railway radiator, railway rolling stock and other 600 parts are being produced by LEIs presently.
Agro-based and Agro—supportive sector: This sub-sector includes plough head, irrigation pump, trashing machine etc.
Machinery, equipment and spare parts of various sector: This sub sector includes spare parts of various industries, capital machineries, accessories etc.
Electrical Machineries: Electrical machinery such as AC, fan, electrical appliances, cooking unit, spare parts, and machine for production of electrical bulb etc.
Household machinery products: Household machinery products such as wheel chair, mechanized bed, mechanized / hydraulic chair etc.
Priority areas for capacity development:
Capacity may be developed in the following areas on priority basis:
Modern foundry development
Heat treatment facility
Sheet metal products manufacturing facility
Alloy steel production
Alloy, CI & DI (Ductile Iron) foundry establishment
Introduction to CAD, CAM, CIM, CNC etc.
Mold and Die making
Use of EDM, Pantograph, Copy milling machine, CNC machine, Wire cut, Machining center
Surface treatment such as galvanizing, nickel coating, Powder coating Chrome coating
Die casting products
Recommendations:
Following recommendations may be considered to promote the light engineering sector of the country:
A definite policy for Light Engineering Industries (LEIs) should be prepared.
Business / technical information is to be readily available to the enterprises to improve their performance. Networking among the concerned trade Associations and R & D Institutions should be established in order to collect, compile and disseminate the information for ready reference for the entrepreneurs. Data Bank for the LE sector may be created.
Necessary measures are to be introduced to upgrade the institutional structure of the LE enterprises.
Appropriate raw materials required to produce quality products should be identified and made locally available.
Government’s decision to allow duty free import of standby Generators should be continued in future until such time it is possible to ensure reliable power supply.
Product/ production technology should be upgraded from conventional to modern level as per market demand. Technical support services should be provided to the local machinery manufacturers to enhance their capability for machine designing.
Material testing facility and R & D facility should be ensured.
Light Engineering Sectors in Bangladesh
Awareness campaign on standardization and quality of the products should be made.
LEIs require exposure to modern machines and technology. Support should be given to LEIs in this regard. A technological support cell should be established under Ministry of Industries to ensure the feed back. Workshops, Seminar, exhibitions and discussions with foreign suppliers may also be arranged.
Entrepreneurial culture should be established so that their capability can be upgraded from the average level to excellent level.
Technicians working in LEIs are quite innovative. But as most of them do not have formal technical education, they do not understand engineering drawing and are not familiar with scientific methods of measurements, limit, fit, tolerance etc. Formal technical education should be ensured for the personnel of the sector.
Technical training should be provided to the personnel of LEIs to improve the quality of their work. Training manual written in a simplified way in Bangla should be given to the trainees so that they can use these effectively.
Necessary provision should be made to make the LEIs familiar with VAT, Tax and other documentation. Knowledge on safety measures, hygiene, environment pollution etc. should also be ensured.
The management of the industries should be given enough tools and knowledge for reaching foreign markets, preparing price quotations, selecting foreign distributors/ agents, documentation, Letter of Credit, shipping and all other tasks related to export.
There is a need to consider friendly financing policy for the LE sector. Extensive financial support should be made to the sector. LE sector should get the facility of EPF.
There should be arrangements for periodic/ permanent exhibition of locally produced engineering products in the country. Permanent Display Center may be established for LE products.
Periodic professional training courses should be organized for capacity building of the LE sector.
Continuous searching for export in global markets should be made. Frequent visit to developed countries and participation in int. trade fairs may be helpful to get experience on using modern technology and get export orders.
Light Engineering Sectors in Bangladesh: Light Engineering Sectors in Bangladesh: Light Engineering Sectors in Bangladesh
The private sector of Bangladesh has been promoting various activities for the promotion of exports from Bangladesh. The private sector is providing institutional support & advocacy; maintains liaison with local & foreign trade related bodies; arranging meetings, seminars & conferences for creating awareness among entrepreneurs; disseminating trade related information and conducting training courses & workshops for developing skills of the businesspeople for increasing exports day by day.
There are 79 local & bi-national Chambers of Commerce & Industry and 256 trade & product related Associations. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) is the apex trade organization of the entire private sector. The national level Trade Associations, like- Bangladesh Garment Manufacturers & Exporters Association (BGMEA), Bangladesh Frozen Foods Exporters Association (BFFEA), etc. are promoting specific products and trade. The Chambers and the Trade Associations are performing various functions for the development of its member entrepreneurs including export promotion such as:
Exploration of Export Market
FBCCI and other leading Chambers and export related Associations are searching overseas export markets continuously. They are sending trade & investment delegations in different countries for enhancing country’s export and seeking foreign direct investment to establish export-oriented industries in the country. They also receive foreign delegations for introducing export products of the country and to sign export contracts with foreign importers.
The Chambers/Associations also take part in international trade fairs and exhibitions in different countries and also encourage the exporting firms to participate in those fairs/exhibitions.
Issuance of Certificate of Origin
For ensuring the origin of production of the export products the leading Chambers/Associations are issuing Certificate of Origin and authenticate documents for promotion of exports.
Export Performance of Bangladesh and Contribution of Trade Organizations:
Our major export sectors – woven garments, knitwear, frozen food, leather, jute goods, pharmaceuticals, chemical products, raw jute and tea are dominated by the private sector entrepreneurs with a successful marketing performance to the USA, Germany, UK, France, Belgium, Italy, the Netherlands, Canada, Spain, Sweden, Japan, Hong Kong, India, Denmark, Ireland, China, Pakistan, Turkey, Singapore, Iran and other countries. Out of the total foreign exchange earnings of US $ 10.53 billion in 2005-06, private enterprises represented more than 95% of the total export earning which has risen from 74.27% in 1990-91. In-spite of adverse global trade and economic scenario, Bangladesh export over the last few years has registered commendable growth thus enabling the country to meet her import bills more and more out of the export earnings. As a result of the considerable efforts the export earnings for the FY 2005-06, meeting 71.38% of our import bills, were the ever highest.
Functions of Trade Bodies
Activities of FBCCI and other trade bodies for the development of our export market:
Exchanging Dialogue with the Government on Different Policies:
The private sector trade bodies have been providing support in the formulation and implementation of Government Policies in respect of import, export, industry, investment, banking, insurance, fiscal measures, annual budget, etc. and provide inputs for the conferences relating to WTO, UNCTAD, SAFTA, BIMST-EC, ASEAN, RTA/FTA, BTA, TIFA, Kunming Initiative, BIBN, SASEC, etc.
Product and Management Development:
For ensuring quality export products the export related trade associations, like- BGMEA, BKMEA, Bangladesh Frozen Foods Exporters Association, Bangladesh Jute Mills Association, Bangladesh Leather & Leather Goods Manufactures and Exporters Associations, Bangladesh Aushad Shilpa Samity and other trade bodies including leading Chambers have been organizing training courses, seminars and workshops for awareness and developing knowledge & skill of the entrepreneurs & officials of exporting firms for the development of export products, quality requirements as well as their management system.
ISO management system and other recognized standards certifications are increasingly becoming a requirement for doing business in international market. For that purpose, FBCCI has formed a Quality Forum named “FBCCI Quality Forum”. This Quality Forum will provide assistance to business organizations in implementing ISO 9001 Quality Management System (QMS), ISO 14001 Environmental Management System (EMS), Hazard Analysis Critical Control Point (HACCP), Food Safety Program, etc.
Dissemination of Export Information:
The private sector trade bodies are regularly disseminating export/import business information to their members by Electronic Communication, Fortnightly /Monthly Trade Bulletins, Monthly Reviews, Newsletters, Circulars, Notifications, Statistical data, etc. They also assist to develop export business through Internet/Webpages of their own.
Implementation of Development Projects:
The trade bodies have been preparing, implementing and evaluating different projects for entrepreneurship development and other export related matters with the technical & financial assistance of donor agencies, like- World Bank, ITC, UNDP, GTZ and ZDH of Germany and other local & foreign organizations.
Functions as a Business Forum for Exchanging Views Globally:
The private trade organizations are acting as the forums for exchanging views on trade and economy as well as export development among different Chamber/Association members, Government agencies and local/foreign and international organizations. They are conducting meetings, conferences, seminars/workshops/symposia, etc. for the promotion of country’s export as well as trade, commerce and investment. They also conduct research on burning policy issues including export promotion.
Trade Agreements with overseas Chambers of Commerce and Industry:
The FBCCI and other leading Chambers/Associations have signed Memorandum of Understanding (MOU) with many overseas Chambers of Commerce and Industry, Regional & International Chambers and other business organizations for promotion of bilateral trade and investment.
Functions of Trade Bodies
Some important issues for Bangladeshi Exporters:
In spite of government support a number of impediments remain to the growth of the private sector contribution to export. The major ones are the lack of long-term capital availability through banking channels; lack of long-term capital in the capital market / bond market; dumping of products largely by smuggling; inadequate support of infrastructure like utilities, specifically power, port services, including land ports, high transportation costs and inefficient telecommunications system, high-interest rates in the banking sector; lack of credible statistics; lack of an appropriate education system to support an industrial economy; slow process of deregulation and privatisation; lack of industry friendly social and political environment; lack of local technology and lack of research and development.
The private sector and trade organizations need assistance and facilities to overcome the impediments in order to play its role smoothly in the development of the country. The government should take steps to ensure the creation of an enabling environment through legal and administrative measures and infrastructure support so that the private sector can function and contribute according to its potential. The Government is aware of the constraints hindering the growth of the private sector and would implement effective measures to remove the hurdles through effective and coordinated policies and actions.
Functions of Trade Bodies: Functions of Trade Bodies: Functions of Trade Bodies
SMEs (Small & Medium Enterprises) occupy a unique position in the economy of Bangladesh. They play an important role in Bangladesh socially as well as economically. Lasting private sector development depends on them. In the present era, SMEs have emerged as the cornerstone of economic development in Bangladesh providing the platform for job creation and economic growth. They provide over 87% of the total industrial employment and is also responsible for creation of over 33% of industrial value-added goods. There are the following sub-groupings among the small sectors, namely Cottage Industries, Handloom Industries, Small Enterprise, and Medium Enterprise.
If only the number of Small Industries is compared with that of the large and medium firms, it is found that over 94 per cent units fall into the category of the SMEs sector. Even in the employment size of 10 or more, most recent information indicates that over 78 per cent of the total industrial units are from 10 to 49 employment band, and about 56 per cent fall in the 10-19 employment bracket in the manufacturing sector of Bangladesh (GOB, 1993f:xi). The SMEs sector – as a whole – provides over 87 per cent of the total industrial employment in Bangladesh (GOB, 2001). This sector is also responsible for creation of over 33 per cent of industrial value added (GOB, 2001).
Definition of Different Types of On industries
There is no universally accepted definition of small and medium industries. They are defined to suit the particular purpose that the authorities or the analysts have in mind. The industrial policy 1999 provides the following size classification scheme of the industries:
Large Industry: Large Industries with 100 and more workers of having capital of over Taka 300 million.
Medium Industry: Medium Industries with employees between 50-99 with a fixed capital investment between Taka 100-300 million.
Small Industry: Small Industries employing fewer than 50 workers with a fixed capital investment of less than Taka 100 million and cottage industry covering household based units operated mainly with family labour.
Present Industrial Scene of Bangladesh:
In the present industrial scene of Bangladesh, barring a small number of large fertilizer factories, composite textile mills, some modern basic chemicals and pharmaceutical factories or specialized paper mills, no grave mistake would be made if we notionally consider the bulk of our industries to be of either ‘medium’ or ‘small’ category in global scale. This is also indicated by the fact that our industrial goods, according to economic end-use classification, have maximum weight age for consumer goods as may be seen below:
Finished consumer goods 62.098%
Intermediate consumer goods 28.899%
Finished capital goods 2.248%
Intermediate capital goods 6.755%
100.00%
(source: c.m.i, statistical year book 1999,bbs).
Start-Ups and SMEs
Similar picture emerges also from the weightages of our general industrial production statistics seen as follows at the 3-digit level of codes:
Table 1
Code
Industry
Weightage
311-314
Food & beverages
23.295%
321-325
Textiles including leather
37.419%
331-332
Wood products & furniture
0.221%
341-342
Paper & paper products
4.562%
351-357
Drugs, chemicals etc
23.567%
361-369
Glass & non-metallic products
2.719%
371
Basic metal products
2.028%
381-385
Mfg of metal products
6.189%
100.00%
(source: cmi, statistical year book 1999,bbs).
The “thrust sectors” identified by the industrial policy, 1999 include at present 16(sixteen) industries namely,
Agro-based industries
Artificial flower making
Computer software and information technology
Electronics
Frozen food
Floriculture
Gift items
Infrastructure
Jute goods
Jewelry and diamond cutting & polishing
Leather
Oil and gas
Sericulture and silk industry
Staffed toys
Textiles
Tourism
Except oil and gas, a few composite textiles, some large infrastructure, all other activities in the thrust sectors can be classified as SMEs at the present state of our industrial development.
Industrial Development in Perspective
The development of the industrial sector was overlooked or biased towards the colonial powers during the British colonial regime. Consequently, no significant progress was made during the colonial period in this sector. During the Pakistani rule, 1947-71 when Bangladesh was a part of Pakistan as East Pakistan, whatever industrialisation took place was in and around the Karachi region because it was the capital city of Pakistan. Moreover, political and administrative factors were a major consideration for developing industries there. As a result, West Pakistan was industrialised substantially within a short period of time, while East Pakistan remained far behind. This is vividly clear from Table 2. Despite owning about three-quarters of the total industrial units, the Bangladeshi entrepreneurs had control over less than a fifth of total assets of this sector before independence. This picture reveals not only the weak position of the Bangladeshi entrepreneurs but also the West Pakistan oriented industrialisation of the Pakistani government.
After independence in 1972, all major industries were nationalised including banks and insurance companies and were brought under the control and ownership of the government. Only small industries up to a total investment value of Tk. 2.5 million were allowed to function under private ownership. Although the government owned only 13 per cent of the industrial units, it was in control of nearly 92 per cent of the total fixed assets. Very soon after independence, the country’s inherited structural weaknesses were aggravated by mismanagement, inefficiency, corruption and labour trouble in the industrial sector. As such, the industrial scenario until 1975 was in a chaotic situation reflecting a blocked and stagnant economy. In fact, during the first few years after liberation, the country’s industrialisation meant re-organisation of the existing production capacity and resuming activities in the industries stopped during the liberation war.
Table 2
Basic Indicators of Industrial Statistics in Bangladesh: 1985-93
Characteristics
1985-86a
1988-89b
1991-92
1995-96
Total Establishments (No.)
Ownership: Government
Private
Joint-Venture
Fixed Assets (Million Tk.)
Total Employment (Person in ‘000)
Gross Value Added (Million Tk)
4 519
174
4 274
25
30 293
497.6
31 954
23 752
NA
83 279
1 175.3
60 663
26 446
NA
102 414
1327.2
222868
28920
167
28708
46
206831
2023.8
182222
a Includes manufacturing units having 10 or more workers registered with Chief Inspector of
Factories;
b Includes manufacturing units employing 10 or more workers registered or not with Chief
When the country’s national accounts are used as a benchmark for comparison, the share of manufacturing industrial value added in GDP is found to be only around 10.5 per cent, as shown in Table 3, with a situation of stagnation or declining trend during 1972-98.
Table 3
Sectoral Share of GDP in Bangladesh: 1999-2003 (% of GDP)
Economic Sectors
1999-00
2000-01
2001-02
2002-03
Agriculture
Industry
(Manufacturing:
-Large scale
-Small scale)
Others
Total =
25.58
15.40
(11.01)
(4.39)
59.20
100.0
25.03
15.59
(11.13)
(4.46)
59.38
100.0
23.98
15.76
(11.16)
(4.60)
60.26
100.0
23.46
15.91
(11.20)
(4.71)
60.63
100.0
a Shows provision figure; b Figures in percentage.
Source: Bangladesh Economic Review 2003
However, the industry sector is the second largest contributor to GDP in the economy of Bangladesh.
Industrial Contribution to Employment
In terms of employment, the share of manufacturing industrial enterprises was estimated at about 13.9 per cent in 1989, as shown in Table 5. This sector historically contributed not more than 6 per cent of total employment before 1984. However, it is presently the second largest provider of employment after agriculture. While the employment share of the agriculture sector gradually fell from 84.61 per cent in 1961 to 64.94 per cent in 1989, the share of the manufacturing sector showed a consistently increasing trend during the last three decades. There has been a noticeable increase in manufacturing employment from 4.80 per cent in 1974 to 13.91 per cent in 1989, and 11.10 percent in 1995-96.
Table 4
Employment by Major Economic Sectors in Bangladesh
Sectors
LFS-1990-91
LFS-1995-96
LFS-1999-2000
Agriculture
Industry
(Manufacturing, Gas,Electricity)
Others
Total =
66.40
11.81
21.79
100.00
63.20
7.40
29.4
100.00
62.30
7.60
30.10
100.00
a Figure in percentage
Source: Calculated from GOB (1993 & 1998)
Table 5
Growth of Small Enterprise in Bangladesh: 1961-2001
Year
Number of Units
Employment
(in ‘000 persons)
Value added
(in million Tk. at constant 1980-81 price)
Small
Cottage
Hand-loom
Small
Cottage
Hand-loom
Small
Cott-age
Hand-loom
1961
1978
1981
1990
1991
2001 (June)
16331
24005
24590
38104
38294
55280
234934
280000
321000
403237
NA
511621
137304
197280
205874
NA
NA
143.8
322.1
NA
NA
523.0
808.9
653.1
NA
855.2
1331.0
NA
1664.7
521.2
847.6
897.4
NA
NA
2513
2772 NA
NA
NA
1401.8 NA
3146.1 NA
NA
NA
NA
NA
NA
NA
Growth1 (%)
5.96
2.94
2.49
11.56
3.87
3.60
0.57
4.12
–
Growth (average annual) rates are calculated based on the available figures of the first and last
years; NA Not available
Source: Ahmed (1987:16), Table 1.2, GOB (1993d:1 & 2001)
Relative Importance of Various Sizes of SME
The relative numerical significance of the SMEs sector in the industrial structure of Bangladesh can be understood in terms of the number of units, of employment and value added as depicted in Table 6. Clearly, there is a superabundance of SMEs in numerical terms in the total industrial structure.
For instance, if only the number of Small Industries is compared with that of the large and medium firms, it is found that over 94 per cent units fall into the category of the SME sector. Even in the employment size of 10 or more, most recent information indicates that over 78 per cent of the total industrial units are from 10 to 49 employment band, and about 56 per cent fall in the 10-19 employment bracket in the manufacturing sector of Bangladesh (GOB, 1993f:xi). The SME sector – as a whole – provides over 87 per cent of the total industrial employment in Bangladesh (GOB, 2001). This sector is also responsible for creation of over 33 per cent of industrial value added (GOB, 2001). According to World Bank (1992), it was estimated that the real contribution of MVA would be much higher, from 30 to 50 per cent higher than the Census of Manufacturing Industries (CMI) and 10 to 20 per cent higher than Bangladesh Bureau of Statistics (BBS), if underestimation in the official statistics is accounted for. One study recently reported that the contribution of SMEs appeared to be over 52 per cent of the total MVA in the year 1989-90 (Microenterprise News, 1993:2).
Table 6
Sectoral Distribution of SMEs in Bangladesh:1978-1993
Industry Sectors
Small Industry
Survey-19781
No. %
Directory of
Man.Ind.-19932
No. %
Small Industry Survey-19933
No. %
SMEs listed with BSCIC4
No. %
Food & allied
Textile & apparels
Forest & Furniture
Paper, printing etc.
Chemical, Rubber etc.
Glass, ceramics etc.
Basic metal/engineering
Fabricated metal/electrical.
Others
Total =
17 358 72
1 391 5
886 4
1 092 5
527 2
218 1
1 743 7
646 3
144 1
24 005 100
7 623 31
5 714 23
1 804 7
1 078 4
1 903 8
2 359 9
483 2
3 455 14
526 2
24 945 100
21 080 55
3 196 8
1 745 5
2 385 6
2 864 7
1 113 3
3 078 8
1 880 5
953 3
38 294 100
8 152 46
741 4
1 794 10
590 3
1 026 6
124 1
2 987 7
1 989 11
245 2
17 648 100
Source: Compiled from 1 GOB (1981); 2 GOB (1993f); 3 GOB (1993d) and 4 GOB (1993e).
Agro Processing Sector of Bangladesh
The Birth and Death Scenario of SME
There is no data covering the entire SME sector concerning the birth or death of enterprises. From information shown in Table 9, however, a partial picture can be formed about SMEs between 20 and 49 employment size. Using the entrants and exciters from the CMI during the period 1974-75 to 1983-84, it was found that about 59 per cent of the net addition in the number of new enterprises were from the SME sector.
Table 7
Birth and Death of Manufacturing Enterprises in Bangladesh:
Employment Size
Entrants
No. %
Exiters
No. %
Net Addition
No. %
20 – 49
50 & above
Total =
674 60.2
446 39.8
1120 100.0
186 64.4
103 35.6
289 100.0
488 58.6
343 41.4
831 100.0
Source: Calculated from Reza et al. (1990:81), Table 1.6.
It was also estimated that there was one death per four new births in the economy during the period under consideration. Expectedly, birth rate was found relatively high in the 20-49 employment size, while death rates vary even more markedly, the 20-49 and 50-99 employment size classes, having even more disproportionately high percentages of deaths compared with the large size class (Reza et al., 1990:81).
Market Coverage and Backward and Forward Linkages
One of the very important functions of SME is to serve the needs of local consumers by supplying a wide range of products. In Bangladesh, over 90 per cent of SME serve the local needs of the people (Rahman et al., 1979:83), and thus, work every day in every economic sphere of the Bangladeshi society. Moreover, it is revealed that there are strong backward and forward linkages between the SME and other sectors – such as agriculture – of the economy in Bangladesh.
The foregoing discussion clearly indicates the numerical significance, one dimension of the role of small firms in the economy of Bangladesh. The other dimension, what Kohlo (1991:34) called the ‘subjective dimension‘, is that SME also provide productive outlets for individuals with independent and enterprising minds. This sector, thus, provides opportunities for developing the ‘seedbed’ of indigenous entrepreneurship. In Bangladesh, small enterprises are also regarded as ‘engines’ of technological innovation, leading to industrial transformation and modernisation in the economy.
It is, therefore, evident that small enterprise is a vital element in the economic legacy of Bangladesh, and that there is much development potentiality in this sector (Sarder, 1990:191-202). However, every year numerous small firms are developed, while unfortunately many of them disappear, abandoning the potential role they could have played in economic development (Reza et al., 1991:81). To combat this undesirable failure, and to accelerate rapid growth, it is necessary to clearly understand the growth prospects as well as the problems faced by the SME sector, to take appropriate remedial measures This is the content of the following section.
The Growth Prospects of SME
The growth prospect of the sample enterprises was assessed by exploring the perception of the entrepreneurs about future growth potential of their enterprises. As expected, most respondents gave multiple answers, which are summarized in Figure -1. These appear to be, as replied by the respondents, prospect of bright, 28.9 percent, export oriented,23.7 percent, large market, 23.7 percent, employment potential, 13.2 percent, positive,7.9 percent and environmentally conscious projects, 2.6 percent. As such, the study findings suggest a growth prospect of the C sector in Bangladesh.
Leather Goods Business Idea
Problems of SME
Most SME in Bangladesh face a number of interrelated problems/difficulties in their business. The most acute of them include server shortage of short and long-term finance, marketing problems, lack of technology and lack of research and development facilities (Rahman et al., 1979; Ahmed, 1999; Sarder, 2001). As revealed in a recent study depicted in Figure 2, those problems appear to be lack of modern technology, 13.2 percent, low investment, 13.2 percent, irregular/inadequate supply of power (electricity), 13.2 percent, high interest, 13.2 percent, lack of government. subsidy, 10.5 percent, unavailability of raw materials, 10.5 percent, no clear government policy,10.5 percent, high competition, 7.9 percent, lack of skilled workers, 5.3 percent and lack of research and development, 2.6 percent.
Need of SME for Assistance
Against of problems faced by small entrepreneurs, possible need of assistance that could help solve those problems faced was also explored. As expected, the small entrepreneurs in Bangladesh express their need (multiple) for various type of assistance. Based on the findings of a recent study, those needs are displayed in figure 3.3. As shown in the figure, expectedly most responds, 35.8 percent expressed their need for financial help. The second cited pressing need appears to be technological assistance,25.6 percent, followed by low interest rate, 10.3 percent, help for improving quality of their products/services, 10.3 percent research and development facilities , 7.7 percent , political stability, 5.1 percent and others(environmental consciousness, and solution of port problems), 5.6 percent. As such the findings suggest the pressing need of financial as well as technological assistance.
To recap, it is clearly evident that most entrepreneurs face a member of interrelated problems. These include, among others, insurmountable hindrance to access to finance, lack of modern technology, irregular supply of electricity, low investment facilities. To overcome those problems, as expected, the express their need for several types of assistance, both financial and non-financial. These include mainly adequate supply and easy access to financial assistance, technological help, support to improve quality of products, formulation of small firm friendly policy, measures to prevent illegal imports, and providing research and development facilities. The SME sector appears to have a very good growth prospects. This is clearly evident from multiple answers of the respondents: ‘prospect is bright’, ‘export oriented’, ‘large market’, ‘employment potential’, ‘profitable’ and so on. As such, the study findings suggest a bright growth prospect of the SME sector in Bangladesh.
Recommendations for Development of SMEs
1 Definite Policy for SMEs: Fortunately, most SMEs in our country develop and survive even in an environment having no policy. Since this sector comprises of a diverse variety of species having myriad characteristics in Bangladesh, we should have a separate policy for this sector. Treating ‘unequal’ – the SMES, on equal footing with the large industries, will accelerate the existing policy induced constraint to the development of small firms.
Development of Networks: The SME sector in Bangladesh needs to develop networks. They should also participate in and influence the contents of Government policies and programmes developed in their interest.
Government Policy: Policies geared toward boosting small firm development should not be confined to the SME sector per se. The government commitment to sustained economic progress must ensure that all aspects of economic system are conducive to and supportive of increased levels of SME activity. This includes mainly minimizing taxation, ensuring access to labour, lowering interest rate, reducing the regulatory burden, neutralizing policy induced constraints, preventing unfair competition form illegal imports, formulating small firm friendly policy, and developing a real private-public sector partnership.
Seed Money, Leasing, Venture Capital and Investment Funding: There is a great need for improving different aspects of financial services of SMEs, such as seed money, leasing, venture capital and investment funding. There is a lack of long term loans, interest rates are high, Guarantee/Security issues, exchange risks etc. All these limit the development of SMEs. Finance, both short and long term, should be provided at market cost of capital.
Extensive Financial Support to SMEs: Various banks, financing institutions, NGOs may further increase its technical and financial support to SMEs through its various financing facilities and windows, which may significantly contribute to the creation and development of SMEs.
Alleviating Poverty through SMEs Development: There is great scope of alleviating poverty through SMEs development. So poverty alleviation strategies and policies for SMEs should be developed, in order to provide job opportunities and enhance living standards for large segment of this poverty ridden country.
Priority Sectors or Thrust Sectors: Since some sectors like Metal Engineering, Cottage Enterprises, IT sectors, Agro-based & Agro-supportive businesses got special suitability for development, special attention should be given to promote such sub-sectors by providing necessary support.
Penetration of SMEs into New Markets: Special attention should be paid to the penetration of SMEs into new markets through E-commerce, as well as the possibilities of accessing foreign markets. Greater trading co-operation with other countries should be developed. Perhaps, such cooperation is most urgently needed now in the changed global political environment of the world.
Training on Different Aspects of SMEs Activities For Entrepreneurs: Training on different aspects of SMEs activities for entrepreneurs is crucial to the development of an entrepreneurial spirit in Bangladesh. Entrepreneurial education could be given for grater long-term impact.
Information Network & Central Data Bank: Information technology can be very effective tool for swift collection of different markets demand pattern, price trends and changing policies structures in various trading partners. For this purpose, it is important to create an information network for SMEs in Bangladesh, creating a Central Data Bank in collaboration with the IDB, ICCI and business associations of the Islamic countries.
Comprehensive Package of Assistance: A comprehensive package of assistance will have much desired long-term impact on the development of this sector. It should be comprised of both financial and non-financial components and should be tailor-made to the needs of SMEs.
Technology Assessment, Diffusion and Dissemination: Technology assessment, diffusion and dissemination around country should be given top priority. Thus, technology R&D Center (Research, Training and Development) should be developed. Transfer of technology and know-how from advanced market economies could be important part of developing R&D capacity in Bangladesh.
Expansion and Diversificationof SMEs: Bangladesh’s industrial sector needs expansion and diversification. For this purpose, growth of SMEs is essential. However, SMEs have to equip themselves with modern technologies and effectively use them to raise their production efficiency.
Seeking International Financing: Various international donor agency/bank extends financing to SMEs through National Development Financing Institutions (NDFIs). It is found that they are not explored properly. The procedure of those donor agencies/banks for loan facilities to SMEs through NDFIs may be reviewed and term and conditions may be examined in order to make international financing more accessible to SMEs in the country.
Inter-Firm Linkages: In order to develop sub-contracting among large and small enterprises around the country and between Bangladesh and other SAARC or OIC countries, Sub-contracting Exchange Schemes can be launched. Professional associations and National Chambers can set-up such establishment. They may collect information about engineering industries components, and what vendor industries can provide such components. In this way, inter-firm linkages could be expanded at home and abroad. The activities of these organizations for inter-linkages among SMEs and assistance to SMEs should be properly identified. Thereafter, programme of maximum utilization of their services may be formulated. This will lay a strong foundation for promoting effective cooperation among small and medium enterprises at home and abroad.
Jute Products
Establishment ofSeparate Micro Bank: The country should start with ‘something effective’ for industrial development in general and the SME sector in particular. Such a step, for example, could be the establishment of a separate Micro Bank. To make the proposed initiative effective in achieving its goals, experts and resources should be gathered around the Islamic countries.
Mitigation of Problems of SMEs: SMEs are of diverse categories facing myriad problems in the country. However, there also do exist specific problems of SMEs in individual sector. Such specific problems require special support in some cases. As such, specific problems should be dealt with the context of that sector.
Uniform Definition of SMEs: There should be a consensus on developing a uniform definition of SMEs around the country. It should be given standard industrial code (SIC).
Trade Fairs, Exhibitions, Symposiums, Seminars and Workshops: Trade fairs, exhibitions, symposiums, seminars, workshops etc. on SMEs should be organized on a regular basis. Publications of all these events should made available for all SME establishments. Chambers around the country can arrange exhibitions for SMEs products, so that larger number of consumers may gain awareness about the diversity and quality of SMEs products.
Interlinkages among SMEs: The activities for interlinkages among SMEs and assistance of SMEs should be properly identified. Thereafter programme of maximum utilization of their services may be formulated. This will lay a strong foundation for promoting effective cooperation among small and medium enterprises around the country
21 Service to Define Problems and Devise a Package of Measures: SMEs often cannot identify and define their own needs clearly enough to seek the best remedies. Thus, a service that can reach out, help SMEs to define their problems and devise a package of measures that deals with the above identified problems has the best chance of success.
Proactive Policyto Promote SMEs: Proactive policy is needed to promote SMEs competitiveness. The first step in this regard is to make firms fully aware of the competitive challenges they have to face. The next step is to help SMEs prepare to meet the challenge, by understanding their strengths and weaknesses and providing the inputs they need to help them upgrade. The main inputs are finance, market information, training, management tools, technology, skills and links with support institutions.
Business Environment Should Be Conducive: The business environment should be conducive to SMEs development, with minimal transaction costs, clear and transparent rules and a stable macroeconomic environment.
Public and Private Sectors Cooperation: For strengthening SMEs in the country the public and private sectors will have to cooperate effectively. In this connection various suggestions are provided herein. They need full consideration for cooperation among various organizations of the country.
Production Structure ofSMEs: SMEs’ production structure should be flexible and dynamic. Due to relatively smaller size they can change their machinery or add new plant at relatively less cost. Similarly, they can retrain their workforce in new technologies. Hence SMEs can adopt modern technologies more quickly compared to large enterprises. Their productivity is relatively high, hence they can be more competitive in domestic and foreign markets.
Internet facilities and Web Site of SMEs: There should be greater access to information through internet of SMEs. In this connection, FBCCI can take initiative to create web site of SMEs. Computers, scanners and diskettes can be used for providing necessary information to SMEs as well as member chamber. Information through this device can be provided on identification around the country as well as other countries such as SAARC and intra-OIC countries. Trading opportunities and assistance to SMEs can be diversified through these opportunities. Analysis of trade data in various regions within and outside the country can be undertaken to identify products which have the greatest potential for Trade. This data can be disseminated through internet or other tools for transfer of electronic information. This is urgently needed for various reasons, developing a network with on-line connection with international website, if we really mean business and want to survive in the new millennium of information super high way.
E-Commerce: Electronic Commerce has also great potential for development around the country and abroad. Through this device, matching of buyers orders to sellers can be done in such products in which SMEs are dealing. Such exchange of information about sellers and purchasers shall be most useful for Agro products, leather products, textiles and clothing, IT and metal products as well as raw materials and intermediate goods.
Periodical Professional Training Courses for SMEs: Periodical professional training courses should be arranged for technical staff of SMEs. Moreover training in management of small enterprises and efficient marketing can also provided. Islamic Chamber regularly organizes training workshops on management, marketing, procurement of technologies, quality control system and financing of SMEs, for the benefit of representatives of private enterprises and staff of member chambers in different regions of the Islamic World. Training programme/workshop should be organized for the development of SMEs capabilities to acquire enhanced knowledge and skills about how to choose, use and improve technology.
Community Development Programmes through SMEs: There is a great scope for human and social development. A large section of our community is below poverty line, who are underprivileged . They have no income for educating their children and have not even access to such employment which can generate sufficient income for their living. Those families are compelled to put their children on odd jobs in informal sector or in SMEs. Here community developed programmes can be organized, in which members of the distressed communities can be employed on reasonable wages. In such programmes of community development, Islamic Chamber can be approached to affiliate such programmes with Islamic Development Bank (IDB) and the Islamic Corporation for Development of private Sector (ICD).
Assistance for SMEs fromBoard of Investments and Export Development Centres: Public sector agencies like Board of Investments and Export Development Centres can also provide useful information to SMEs. They can provide necessary information about trade fairs in member countries as well as training in organization of exhibitions. They can identify foreign buyers and assist local SMEs in establishing contacts with them. Information on changing demand conditions in various international markets can be provided and advisory services on exploring trade opportunities can be provided to prospective exporters.
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Credit Guarantee Scheme & Financing to SMEs: Financing to SMEs can be successful, if two arrangements can be undertaken: (1) Separate institutions dealing with SMEs loans should be established around the country. They can provide adequate volume of finance, on less strict terms and can supervise the loan repayment process as well. (ii) Credit guarantee schemes. Credit guarantee schemes for SMEs can be an effective means of supporting small enterprises development, especially in our country where access to credit is constrained for small borrowers.
BSCIC to be Reorganized: BSCIC to be reorganized so that SMEs can grow in the country in a better manner. Alternatively, a separate organization such as Small and Medium Enterprise Development Authority (SMEDA) may be established to act as a one-stop consultancy Agency to: (a) act as a body for facilitating policy making for SMEs, (b) provide and facilitate support services for SMEs, (c) act as a resource base for the SMEs, and (d) represent SMEs on domestic and international forums. The authority may be state supported, private or jointly supported organization.
33. Sub-Contracting Exchange Schemes among large and small enterprises: In order to develop sub-contracting among large and small enterprises among member countries, Sub-Contracting Exchange Schemes can be launched. Professional Associations and Chambers can set-up such an establishment. They may collect information about engineering industries components, and what vendor industries can provide such components. this way inter-firm linkages can be expanded around the country.
Implementation and Monitoring of Policy Measures for SMEs. Only policy prescription is not the end, if it is not implemented through different measures timely and properly. How far policy measures are implemented, along with, what effect – desired or not – such policy measures has had on the development of SMEs should also be monitored from time to time. This monitoring will provide feed back for taking corrective actions, if necessary, to ensure desired effect of the policy adopted. Of course, an independent body should do the monitoring of implementation of the policy measures, and possible impact.
Rationalization of Exiting Policy Induced Constraints: Rationalization of Exiting Policy Induced Constraints to the development of SME. There has been evidence on constraints, created by existing policies, to the development of SME in Bangladesh. A thorough review of the existing policies should be made, along with empirical study, to clearly identify such policy induced constraints so that appropriate measures could be implemented for correcting such constraints.
Conducive Policies for Boosting Enterprise and Entrepreneurship: Policies geared toward boosting enterprise and entrepreneurship should not be confined to the entrepreneurship sector per se. Since the process of enterprise development is being influenced by a myriad variety of variables, policies relating to other sectors and having influence on enterprise development should be carefully designed.
Developing Institutional Network through Public-Private Partnership: The design of most government agencies appears to be overly bureaucratic and unsuitable for effectively supporting SMEs in Bangladesh. As such, re-organization of the design of these agencies has for long been overdue. Public-private sector partnership, by redesigning the existing public agencies, could be developed, developing appropriate institutional network. The objective behind this would be to utilize the strengths of public and private agencies, while neutralizing the limitations, if any, inherent in their existing organizational design.
Development of Entrepreneurs: The perceived social legitimacy of entrepreneurs should be encouraged. Entrepreneurs are the architects of the modern socio-economic development. Therefore, the society should recognise the contribution of entrepreneurs and value their activities so that they feel encouraged, if anyone fails anywhere, for taking further initiatives for future success. This is very important because only few – not everybody – could be successful in entrepreneurial endeavors.
Conducive Infrastructure Facility: Water, gas, telephone and electricity connection to be given on priority basis. Stable power supply facility to be ensured. Cost of various capacities of generators to be reduced by reducing duty and other taxes on generators.
Separate Financing Institution for SMES: Finance is the main obstacle to the SMEs sector, with no sign of immediate improvement of the situation in Bangladesh. Therefore, a separate financing institution could be developed, with joint ownership of the public and private sector. No concessional but the principle of market rate of cost of capital should be applied in lending procedure. Another source of finance could be raising fund from share market by flotation of IPO by SME under ‘Group IPO Scheme (GIPS)’. In the case of GIPS, a group of SME would utilize their assets for issuance of public shares to be managed by an independent agency. Finally, fund should be made available through encouragement for setting up ‘Venture Capital’ organisation in Bangladesh. The concept of venture capital (VC) has successfully operating in the USA, EU countries, and Canada.
Establishment of R&D Institute for Enterprise and Entrepreneurship Development, Training and Research Institute: In a country like Bangladesh, where entrepreneurial initiative is rare and shy, a separate institute for enterprise and entrepreneurship development, training and research should be developed. Presently, there exists no such institution except a project of the BSCIC called ‘SCITI’ (Small and Cottage Industries Training Institute). Presently, the SCITI has ended its contact period, and has been struggling for survival. Once again public-private partnership should be developed. To make it a ‘centre of excellence’ in SMEs development, it should be designed, involving educational institutions, business associations, relevant government bodies, private research agencies, and individual consultants having experience in SMEs development.
Tchnology Transfer: Technology transfer is of vital importance for development of SMEs. Technology transfer through various means and Reverse Engineering to be arranged through Government and private levels.
ISO Standards: Quality Assurance & Environmental Friendliness: Compliance to quality assurance & environmental friendliness to be ensured through Standards such as ISO9000 & ISO14000. Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy implied or stated needs (ANSI/ASQC Standard A3-1987). Conformance of the product or service to these specifications is measurable and provides a quantifiable and operational definition of quality.
44. Women Entrepreneurship: Women entrepreneurship should be encouraged. In our economy, we have nearly 50 percent women population, while an insignificant proportion of women is entrepreneur. No country can be developed without proper participation of such a big community in the entrepreneurial activity. As such, policy should be designed to encourage more and more women to be involved in entrepreneurial endeavors.
SME DEVELOPMENT & CHALLENGES IN BANGLADESH: SME DEVELOPMENT & CHALLENGES IN BANGLADESH: SME DEVELOPMENT & CHALLENGES IN BANGLADESH
The prevailing industrial management scene is replete with pictures of sick units of production. They have become sick due to inefficient management and ultimate loss of market share for their products. Those in management have apparently failed to keep the industrial installations operational and that largely due to their failure to adopt any production schedule and supply inputs including raw materials. Some of the installations could not ensure disposal of their products both for lower quality and for higher price. Some local products also face competition from producers abroad. Foreign producers managed to gain a share in the market opened in pursuance of the policy of liberalization. But local production units have not taken into consideration the upcoming needs and realities.
That some abandoned units of industries were nationalized by the government immediately after the liberation of the country has to be appreciated by all. These units were set up in fifties and sixties and after necessary analysis of the investment climate. Some industries were set up for processing farm sector products like jute and sugarcane, natural gas and the like. Other industries were set up by entrepreneurs, like textile mill owners, who wanted to produce textile products for meeting local demand. These installations had machinery imported from abroad. Some local entrepreneurs invested in production units that produce intermediate products including spare parts of machinery needed in the country. Pharmaceutical units of production, set up both in private and public sector, have either become profitable or losing concerns and that also due to ineffective management.
Bangladesh experienced rapid growth in the public sector immediately after its liberation, between 1971 and 1975 to be precise. The regime in power had firm commitment towards a dominant public sector. Moreover, it had to take over possession of businesses abandoned by the Pakistani owners. Although subsequent regimes demonstrated less inclination towards the public sector, still the country has about 200 public enterprises (grouped under 38 cooperation) in operation. They are incurring a loss of about Tk. 25 billion per year. State-owned Enterprises (SOEs) relating to industries and public utilities are the worst loss makers.
Losing concerns in public sector have already drawn support from the treasury. Every year, the government has transferred part of revenue earnings to financially non-viable and sick industries. Such transfer has not only diverted money that could be used for more productive purposes, it has also made sick industries dependent on subsidy or grants from the treasury. Sick units in private sector are normally closed by entrepreneurs, who look for alternative use of their investable capital. For sick industries in the public sector, the government created the Privatization Board for ultimate transfer of such industries to private sector buyers. The response from private sector remains inadequate and official authorities have not succeeded in transferring public sector industries to private buyers.
Privatization in Bangladesh
Apparently, the exercise on privatization has not been all that objective. The value of asset side of listed industries has been quoted on the basis of current price of land, machinery and spares as well as raw materials and finished products. The liability side has also been calculated on the basis of depleted value of machinery, on the one hand, and the inflated value of loans and interests thereon, on the other. The quoted value of selected public sector industry looks very high and buyers from private sector and foreign investors are not found showing interest in entering into any deal for transfer. As a result, the pace of transfer remains largely slow.
The private sector entrepreneurs in this country, have done their bit in setting some profitable industries in different sub-sectors including garments, leather goods, pharmaceuticals and the like. They are not all that interested in buying sick industries, even though price thereof may be cheap. Some of them have since bought disinvested units, only to recover the money spent by immediate sale of machinery, land and allied assets. The ultimate goal of the public authorities to keep the transferred units’ operational looks largely defeated. That being so, more positive measures may have to be taken by official agencies to go for privatization.
The government has come up with the passage of the Privatization Act duly approved by the Parliament. It was, nevertheless, an onerous task on the part of government to implement the privatization programme and indeed, the Act is destined to hasten the process. The government thinks the guidelines of the Act have been formulated in conformity with the needs of the present-day requirements.
According to the Act, Privatization Commission has been set up replacing Privatization Board to expedite the denationalization process of the State-owned Enterprises (SOEs) as the existing rules failed to make any headway in offloading those.
The Commission has been empowered to adopt any alternative means to sell out State-owned Enterprises (SOEs) if tender and re-tender fail to get successful bidder. If necessary, it can take steps for commercialization of an enterprise. There are also provisions that the Commission can take over any of the denationalized enterprises if the conditions of agreement are not followed.
As, privatization in Bangladesh has generally been associated with sale of loss-making state-owned industrial enterprises. However global experience shows that meaningful and rapid economic development is possible when infrastructural sectors, such as, power generation, electricity and gas distribution, telecommunications, airlines, tollways are privatized. The infrastructural sectors have the potential of attracting massive foreign direct investment which in turn would spur a chain of economic activities in the country. In a country like Bangladesh where one of the biggest hindrances to rapid economic growth is weakness in our infrastructure, we should proactively look at privatization of these sectors, as has been done successfully in many other countries. The authorities need to shake off fear of pressure groups and take bold, urgent and effective steps towards a meaningful privatization of both state-owned industrial enterprises and equally important infrastructural sectors.
The SOEs in infrastructural sectors are prime candidates for immediate privatization. These sectors are important for a number of reasons. First of all, in most developing countries including Bangladesh, prices of infrastructural services do not reflect cost and growth, or development of these sectors do not depend on consumer demand. Second, these sectors have powerful spill-over effects on the growth and development of other sectors. Third, privatization of the infrastructural facilities- such as water, energy, telephone system, railways- promise tremendous gains.
Privatization target is, no doubt, achievable provided a strategy is firmed up. Firming up a strategy, based on consensus, however, is not an easy task. The political parties react keeping at the back of mind, the likely impact on the political situation. The trade unions being the vested party, resist privatization for fear of losing their employment. The bureaucracy creates snags in the fear of losing the empire and there are some academicians for whom privatization will mean defeat of an ideology.
Privatization is still largely a misunderstood concept in Bangladesh. Many still do not realize that privatization refers to transferring, to the private sector, of activities and functions which have traditionally been with the public sector. Also, privatization may take many forms, such as public ownership with operation contracted to the private sector, private ownership and operation under government regulations and community and user provisions. Another problem with the privatization effects is that privatization did not start in the country with clear policy guidelines. Therefore, besides firm political commitment and public education, making progress in privatization in Bangladesh would require a clear-cut policy, perhaps a privatization master plan.
Privatization in Bangladesh: Privatization in Bangladesh: Privatization in Bangladesh
Public Private Partnership
Economic reforms give rise to social costs in the form of losers and gainers. Careful management of these transitional costs will, therefore, be an important part of the government policy for years to come. Concerns about job losses and other adjustment costs still deter many countries from undertaking privatization and liberalization. The available evidence, however, suggests that adjustment costs tend to be limited than sometimes feared. Nevertheless, there is much that governments can do to minimize such costs by fostering strong private investment and facilitating a smoother movement of workers from declining ones to expanding sectors. By contributing to economic growth in the longer term, trade liberalizations in likely to make contribution to poverty reduction. Policy makers may also wish to put in place social safety-net to assist adjustment for vulnerable groups who may be adversely affected by reforms.
Privatization does not mean only transferring the liability or the state to the private shoulders; it means privatization of over-all economic activities having impact on the growth and developments, in order to achieve competitive efficiency keeping pace with the changes. For a speedy privatization, the following steps should be taken and carried out with utmost sincerity:
The privatization process should be accelerated with a work plan and phased timetable for accomplishing the set targets. Privatization of highly loss-making SOEs related to industries and utility sectors should be undertaken on priority basis.
Steps should be taken to encourage more buyers and better bids.
Specific and adequate safety-net programmes including attractive severance package may be undertaken to allay fear of retrenchment of workers.
The Privatization Act should be widely discussed outside and inside parliament.
While accepting bids, highest quoted price should not be the only consideration.
Effective financial sector reforms, introduction and enforcement of modern corporate laws, share bidders right, transparent free market policies, etc., should be ensured to pave the way for privatization.
Privatization in Bangladesh: Privatization in Bangladesh: Privatization in Bangladesh
Compiled from the Speech of a Former Director, FBCCI
Bangladesh has liberalized its economy in keeping with the global trend. As an underdeveloped country she has to increase her production capacity rapidly to prepare herself for integration with free market economy by 2005. Bangladesh follows private sector-led growth economy, where the Govt. is the facilitator and private sector is the main player.
Bangladesh has been maintaining a steady economic growth of about 5% during the last ten years. There is a target to increase this growth rate at 5.7% in the next year and in medium-term 7%. In the year 2002-2003, the domestic savings rate was about 18.23%, GDP at current market price was about US $ 51.90 billion, annual per capita GDP US$ 389, growth rate 5.3%, industrial growth rate at constant price 6.62%, inflation rate: 5.2%, investment rate:23.2% of GDP.
In Bangladesh, sharp decline in the availability of Official Development Assistance (ODA) and limitations of capital formation and export earnings, the need for Foreign Director Investment (FDI) has become a major issue. Government policies tried to induce foreign investments not only for capital formation but also to acquire technology and management skills besides having access to the export markets. Bangladesh Govt. has been providing various type of incentives to the foreign investors. The balance of trade is always against Bangladesh. In 2002-03, Bangladesh export was only US$ 6548 million and import US$ 9658 million, the balance of trade being US$ 3110 million against Bangladesh. To reduce this trade gap, it is highly required to increase country’s industrial growth for enhancing its export earnings. Being deficient capital like many other developing countries, Bangladesh needs substantial foreign direct investment for attaining sustained economic growth along with for developing its industrial base and poverty reduction.
INCENTIVES AND FACILITIES FOR THE INVESTORS
To attract foreign direct investment, the Government of Bangladesh has offered most liberal package of investment facilities and incentives.
Tax holiday: Tax holiday facilities will be available for 5 or 7 years depending on location of the industrial enterprise. Tax holiday facilities will be provided in accordance with the existing laws.
Accelerated depreciation: Industrial undertakings not enjoying tax holiday will enjoy accelerated depreciation allowance. Such allowance is available at the rate of 100 per cent of the cost of the machinery or plant.
Concessionary duty on imported capital machinery: Import duty, at the rate of 5% ad valorem, is payable on capital machinery and spares imported for initial installation or BMR/BMRE of the existing industries.
Rationalization of import duty: Duties and taxes on import of goods which are produced locally will be higher than those applicable to import of raw materials for producing such goods.
Incentives to Non-Resident Bangladeshis (NRBs): Investment of NRBs will be treated at par with FDI. Special incentives are provided to encourage NRBs for investment in the country. NRBs will enjoy facilities similar to those of foreign investors.
Foreign Investment Climate in Bangladesh
Other incentives:
Tax exemption on royalties, technical know-how fees received by any foreign collaborator, firm, company and expert.
Tax exemption on the interest on foreign loans under certain conditions.
Avoidance of double taxation in case of foreign investors on the basis of bilateral agreements.
Exemption of income tax up to 3 years for the foreign technicians employed in industries specified in the relevant schedule of income tax ordinance.
Tax exemption on income of the private sector power generation company for 15 years from the date of commercial production.
Facilities for full repatriation of invested capital, profit & dividend
6 months’ multiple entry visa for the prospective new investors.
Re-investment of repatriable dividend treated as new investment.
Citizenship by investing a minimum of US$5,00,000 or by transferring US$10,00,000 to any recognized financial institution (non-repatriable).
Permanent residentship by investing a minimum of US$ 75,000 (non-repatriable)
Tax exemption on capital gains from the transfer of shares of public limited companies listed with a stock exchange.
Special facilities and venture capital support will be provided to export-oriented industries under “Thrust sectors” .
There will be no discrimination in case of duties and taxes for the same type of industries set up by foreign and local investors and in the public and private sectors.
Incentives to export-oriented and export-linkage industries: Export-oriented industrialization is one of the major objectives of the industrial Policy 1999. Export-oriented industries will be given priority and public policy support will be ensured in this respect. An industry exporting at least 80% of its manufactured goods or an industry contributing at least 80% of its products as an input to finished exportable, and similarly, a business entity exporting at least 80% of services including information technology related products will be considered as an export-oriented industry. To make investment in 100 per cent export-oriented industries, the following incentives and facilities will be provided:
Duty free import of capital machineries and spare parts upto 10 percent of the value of such capital machinery will continue.
Existing facilities for Bonded Warehouse and back-to-back Letter of Credit will continue.
The system for duty drawback will be further simplified and to this end, duty drawback will be fixed at a flat rate on exportable and potentially exportable goods. Exporter will receive duty drawback at a flat rate directly from the relevant commercial banks.
The arrangement for providing loans up to 90 percent of the value against irrevocable and confirmed Letter of Credit/ Sales Agreement will continue.
To ensure backward linkage, incentives will be extended to the “deemed exporters” supplying indigenous raw materials to export-oriented industries. Export-oriented industries including export-oriented RMG industries, using indigenous raw materials will be given facilities and benefits at prescribed rates.
The export-oriented industries, further to the provisions of Bangladesh Bank foreign exchange regulations, will be entitled to receive additional foreign exchange, on case-to-case basis, for publicity campaign, opening overseas offices and participating in international trade fairs.
The entire export earnings from handicrafts and cottage industries will be exempted from income tax. For all other industries, income tax rebate on export earnings will be given at 50 percent.
The facility for importing raw materials, which are included in the banned/ restricted list, but required in the manufacture of exportable commodities, will continue.
The import of specified quantities of duty-free samples for manufacturing exportable products will be allowed consistent with the prevailing relevant government policy.
The local products supplied to local industries or projects against foreign exchange payment or foreign exchange L/C will be treated as indirect exports and be entitled to all export facilities.
The Export Credit Guarantee Scheme will be further expanded and strengthened.
10 percent products of the enterprises, located in both public and private EPZs will be allowed to be exported to domestic tariff area against foreign currency L/C on payment of applicable duties and taxes.
100 % percent export-oriented industry outside EPZ will be allowed to sell 20% percent of their products in the domestic market on payment of applicable duties and taxes.
Apart from the above-mentioned facilities, other facilities announced and provided in the Export Policy will be applicable to export-oriented and export-linkage industries.
Export Processing Zones (EPZs)
Export Processing Zones are considered by the foreign investors as an ideal location for the export-oriented industries. In Bangladesh, the Export Processing Zones with necessary infrastructural facilities offer very attractive incentives. Export Processing Zones in Chittagong and Dhaka provide necessary fiscal, non-fiscal and infrastructure facilities for export-oriented enterprises. Four more Export Processing Zones in Mongla, Ishurdi, Comilla and Syedpur (Nilphamari) are under implementation.
Foreign Investment Climate in Bangladesh
EPZ IN THE PRIVATE SECTOR
The Government enacted “The Bangladesh Private Export Processing Zones Act 1996” allowing setting up of Export Processing Zones in the private sector with a view to attracting more investment especially foreign investment in the country. Accordingly, quite a good number of private EPZs have been registered. The first private EPZ by a Korean company in Chittagong has already been implemented.
Bilateral Investment Guarantee Agreement has been signed with a number of countries. Bangladesh is a signatory to the Multilateral Investment Guarantee Agency (MIGA), Overseas Private Investment Corporation (OPIC) of USA, International Centre for Settlement of Industrial Disputes (ICSID) and is a member of the World Intellectual Property Organization (WIPO). It has already signed agreements with a number of countries for avoidance of double taxation. Besides, Bangladesh enjoys quota free and duty free market access into EU, Canada, Japan, Australia and Norway. This offers a tremendous opportunity to the foreign investors to set up production facilities in Bangladesh targeting those lucrative markets.
Meanwhile the Govt. of Bangladesh is committed to increase trade related capacity including trade and investment infrastructure and she has improved infrastructure facilities and Utility Services,Road Transport, Railway, Airways, Marine Transportation, Electricity, Water and Sewerage, Gas, Telecommunication, Industrial land, etc.
POTENTIAL SECTORS FOR INVESTMENT
The major potential sectors including “Thrust Sectors” identified by the Bangladesh Government, which offer probable choices for investment are:
Textiles: Being labor-intensive it is the most comparative advantage sector in Bangladesh. The captive demand of over 2.5 billion meters of fabrics of the burgeoning ready-made garments industries which are currently being met from imports and domestic unmet demand of about 280 million meters offer enormous potential for setting up backward linkage industries. Composite textile mills with modern dyeing and finishing facilities have excellent prospects.
RMG and Knitwear: High fashion readymade garments (RMG) and knitwear are identified as thrust sector in Bangladesh. This sector has a great potential for FDI along with general RMG and knitwear.
Energy (Power Generation and Transmission): In view of the gradual widening of supply gap and pursuant to the policy of privatization the Government has recently opened the energy sector to private investment.
Natural Gas-based Industries: Bangladesh is endowed with large deposits of Natural Gas. Gas being the major source of energy for power generation, fertilizer factories, commerce, industries and domestic use, its exploration and development is a high priority for the country.
Telecommunication: The all-pervasive influence of the recent revolution in information technology on the telecommunication sector has opened up a new vista for private investment. This is a highly potential area not only because the possibilities and potentialities are immense, but also because there is a ready market of eager clients in the country.
Fisheries: There is large domestic demand for fish including shrimp & frozen fish and foreign markets are sizable and ever growing because of its proven superiority over meat proteins. Given extensive coastlines, large water bodies and excellent climatic conditions, the potential for fisheries development including hatcheries in Bangladesh is enormous.
Agro-based Industries: Bangladesh enjoys the basic attributes for successful agro-based industries namely, rich alluvial soil, a year-round frost-free environment, adequate water supply and an abundance of cheap labour. Increased cultivation of vegetables, tropical fruits, spices now grown in Bangladesh could feed agro-processing industries for both domestic and export markets. Floriculture can also be developed to meet export demand.
Electronics: Already a number of overseas electronics companies have established technical collaboration with Bangladeshi counterparts to produce electronic gadgets at competitive prices. But these are mostly assembling plants. The creation of feeder industries to supply parts such as transformers, fuses, printed circuit boards and coils to existing electronic operations has begun in a limited sale. The development and expansion of these and other areas offer large investment opportunities for the manufacture and export of electronic components and products.
Foreign Investment Climate in Bangladesh
Computer Software Development and Data Entry: The revolution in the information technology facilitating computerized global networking has opened tremendous opportunities for the highly lobour-intensive computer software development and data entry in Bangladesh. There is a large pool of educated girls and young man who can be easily trained to man these ventures.
Leather and Leather Goods: Bangladesh leather is of compact fiber structure and fine grains. Available quality hides can support a variety of increased value-added products such as jackets, garments, gloves, shoes, wallets, hand bags, watch bands etc.
Tourism:Tourism is another potential sector for foreign investment. There is the longest sea beach in Bangladesh and many other historical & attractive natural places have high potentials for investment.
Light Industries: Light industries of Bangladesh produce variety of labour-intensive goods including toys, consumer durables, small tools, and paper products for a large domestic market. Further development of these industries offers large investment opportunities. Some export oriented light industries have already been established by entrepreneurs from Hong Kong. Japan and Korea taking advantage of cheap and easily trainable local labour and available infrastructure facilities in EPZs. There are enormous potential for expansion of capacity in this sub-sector.
Besides, there are other potential areas for investment in Bangladesh, such as: light engineering, ceramic, dairy farming & dairy products, poultry farming & poultry products, jute goods, paper and pulp, cement, sheet and plate glass, etc. The government also welcomes investments in the development of port facilities and industrial parks.
Most of the foreign investors consider the investment potentials in Bangladesh to be bright and many of them would like to explore further the possibilities of investments either on their own or in partnership with local entrepreneurs and the incentives for foreign investors are quite attractive. They highly appreciate the policies of the present government for liberalization, private sector driven and market led growth in the economy.
Foreign Investment Climate in Bangladesh: Foreign Investment Climate in Bangladesh: Foreign Investment Climate in Bangladesh
Bangladesh is one of the most densely populated countries in the world. Nearly 80 percent of the people live in the rural areas and the majority of the rural people remain unemployed for and under employment some months of the year. More than half of the rural people are landless or nearly so and another 25 percent find it difficult to ensure subsistence from their cultivable land and need to seek supplementary sources of income. About three-fourths of the rural households are dependent totally or partially on the market economy, for their livelihood.
In the sixties, the percentage of the poor was around 25. During the last three decades, it has jumped to over 60%. A recent BIDS study shows the condition of the absolute poor in the country, by and large, has remain static. Poverty is the condition that is said to exist when people lack the means to satisfy their needs.
To determine the elements of the basic needs, the same can be defined narrowly as “those necessary for survival” & broadly as “those reflecting the prevailing standards of living in the communities”. The first criterion would cover those near the border line of starvation, the second would the people whose nutrition, housing & clothing, though sufficient to maintain life, do not measure up to those of the population as a whole. Poverty is associated with poor health, low level of education, inability or unwillingness to participate in society. Whatever definition one uses, authorities & laymen equally agree that the effects of poverty are harmful to individuals & to the society.
Poverty may be classified as:
Cyclical Poverty
Collective Poverty
Case Poverty
Land is the main productive asset in rural areas; it represents both economic and social status. According to the agricultural census 1983/1984, about 56.5 percent of the rural households are effectively landless with 8.7 percent owning neither homesteads or cultivable land, 19.6 percent having homesteads but no cultivable land and 28.2 percent owning homestead and upto 0.2 ha of land. Landlessness is increasing rapidly as a result of population growth, river erosion and various other social and economic factors.
In the backdrop of the prevailing rural scenario, the prime needs for rural development in Bangladesh are productive employment and income generating programs in both farm and non-farm sectors along with the development of agriculture and basic infrastructure in the rural areas. The primary vehicles for the promotion of such rural development will be local level institutions within the principle of participatory development as far as possible.
Bangladeshi Farmer
ROLE OF BUSINESS COMMUNITY IN POVERTY REDUCTION
Agriculture remains the largest sector of the economy occupying three-fifth of the employed labor force and producing nearly half of the economy’s output. The role of Business Community is vital in expansion of almost all the above-mentioned sectors in any country or society. The business community can bring out technical revolution, new and modern techniques can increase productivity by reducing cost and getting more output or performance.
Poverty is a multi-dimensional phenomenon whose dimension is by no means reducible to any single indicator. Poverty alleviation calls for multi-dimensional approach, such as nutrition, health and sanitation, housing, education, personal security etc. For poverty reduction, macro-economic policies for development and technological development strategies have to be appropriate for our socio-economic background, general level of technical skill, and our goals of developing rural Bangladesh. Businessmen, as a prime profession, who are relentlessly making contribution towards national growth and creation of new resources, seek for their legitimate role in poverty reduction efforts. This role lies in the linkage between the approach, strategy and program for poverty reduction and the scope of professionals and businessmen.
By their very position with respect to production process and relations, the businessmen contribute directly to economic growth. Nevertheless, through continuous R & D activities, we business counterparts have to play an indispensable role within the framework of formulation of strategies for technological development for poverty reduction as well as converting the principles of science, acquired knowledge and experience to develop local technology. All the above activities that contribute to poverty reduction dependent on investments of business entrepreneurs. Thus, businessmen can play a major role in poverty reduction of the country through promotion of small and medium sized industries, which can directly create employment opportunities as well as help poverty reduction by contribution to the growth of the economy.
GOVERNMENT OBJECTIVES AND STRATEGY FOR RURAL DEVELOPMENT
Poverty is the most pressing problem in the rural areas of Bangladesh. A rural development plan must continue to effectively address the poverty problem. For this, the plan has to pursue an employment-led growth policy. The focus of the policy would be to promote greater opportunities for the rural poor for productive employment in both farm and non-farm sectors of the economy.
Appropriate strategies and effective policies for rural development are needed for the realization of the objectives. For the development of rural economy, the Government formulated the strategy of Rural Development Projects on addressing the following:
Development of physical infrastructure including roads and markets.
Irrigated agriculture, drainage and minor flood control works.
Production and Employment Program (PEP)
Keeping alleviation of rural poverty as the end in view, the objectives of the Rural Development Institution (RDI) sector under FFYP are to:
Reduce rural poverty by means of increasing gainful employment and income opportunities on a sustained basis through expansion of the productive sectors;
Develop rural institutions;
Improve technology and skills for productive activities and ensure better access for the rural poor to the means of production;
Facilitate agricultural development through institutional support and expansion of irrigation;
Improve basic physical infrastructure (Roads, markets) in the rural areas;
Promote participation of women in rural development
For rapid poverty reduction, the Government’s priority is to develop the rural areas where most of the poor people live. This requires accelerated growth of agriculture and the rural non farm sector. A rapid agricultural growth will sustain high growth with better capacity to reduce poverty through enhancing rural wages, creating synergies for diversifying the rural economy, and enabling the supply of low-cost food to improve nutritional status and food security of the people.
Encouraging agricultural growth requires various policies ranging from new technology to credit for small farmers. The past growth in agriculture was helped by new high yielding variety (HYV) technology, particularly in rice, in which both the state and the market played important roles. The Government would continue its pro-active role in key public goods in agriculture particularly in improving the ability of the farmers to adopt new technology and providing appropriate mix of incentives to pursue profitable operations.
The recent growth of agriculture was greatly influenced by macroeconomic and sector specific policy changes. Reforms in trade and exchange reate policies created favourable incentive structures and dismantling of state interventions, market-oriented reforms and reduced regulations favoured growth in agricultural production and productivity. The reforms led to faster growth in minor irrigation, increased the supply of fertilizer and seeds, helped in wider adoption of high yielding varieties (HYVs), and encluraged the farmers to go for more rational input use and production decisions. The Government’s priority would be to intensify efforts such that positive achievements are expanded and the constraints limiting their potential are resolved.
Rural Bangladesh
PROPOSED STRATEGY FOR IMPLEMENTATION OF RURAL INFRAST-TRUCTURE DEVELOPMENT ACTIVITIES AND ROLE OF BUSINESS COMMUNITY
In the process of construction and maintenance activities of rural infrastructures, the following strategies may be followed by the engineers and business community:
Directly involve the landless groups / people in construction and maintenance of rural infrastructure in the form of Labour Contracting Society (LCS) which has already been experimented in various RD projects.
Ensure that landless groups of poor men and women get maximum employment opportunity under the contractors and they are paid fair wage.
Ensure wider participation of rural infrastructure and keep certain activities reserved for the destitute women.
Impart skill development training to the rural poor involved with construction and maintenance of rural infrastructure for further development of their competence.
PARTICIPATORY MODEL: EMPOWERING THE POOR
Participatory development model calls for empowering the poor, to recognize their inalienable right to decide their own destiny and their access to education, health, sanitation, housing, employment and credit facilities. To ensure these rights there should be structured or institutionalized arrangement at the grass root level. These necessitate building and strengthening of local bodies like counties, municipalities, union etc. with elected representatives in all tiers. Development cannot be thrust from above. Development must originate from those for which it is essentially meant. This means that there should be first of all firm political commitment for poverty alleviation. Politics and development are inter-related. Politics of development and production is the main pillar for building effective bridges with the masses. Proper political and social atmosphere is the sine qua non for development. This will generate mass awareness for development at the lowest level and will thereby ensure social justice.
The participatory development model presupposes the working people as the main component of all development activities. Under this model, human being is not the problem, rather they are the keys to problem solution. Sustainable and meaning full development only takes place through the optimum utilization of human creativity and productivity. The Peoples Republic of China achieved tremendous progress by following this model. Mexico, under President Salinas, was also deriving rich dividends in the same way. In an interview with Readers Digest (August 1992 issue) President Salinas explained the inherent philosophy of his solidarity program which aims at alleviating poverty. He said- “Trust the people. In the past we relied on the central government to determine what the poorest people needed. Now we have reversed this process. No longer will official in Mexico City decide the needs of the people in the rural areas. Local, democratically elected committee, how to use some of the proceeds of the privatization and savings from debt re-negotiation to have running water and electricity, to builds schools and clinics and to pave roads. All of these decisions that people, not bureaucrats are taking today.
In Bangladesh, where we will be able to empower and trust the people and not depend on the bureaucrats in the capital city, a breakthrough can definitely be achieved in the prevailing poverty situation i.e., our development initiative should be target-oriented. The Bangladesh Economics Association in its 10th Biennial Conference has, therefor, called for national consensus by effectively involving the government, the opposition, industrialists, businessmen, volunteers (NGOs), the peasants and the workers. The Association was of the opinion that national participation in the country’s development process was minimal. It was some sort of a dictate from the bureaucracy-oriented government as per the prescription of donor countries and agencies. Poverty alleviation will continue to remain elusive if this process persists. Union councils, Thana councils and Zila councils should be so constituted with people’s representatives that they are able to function as independent decision-making agencies without bothering for dilatory approval. When this can be done, projects will no longer remain unimplemented.
POLICY FOR POVERTY REDUCTION
To remove poverty the following policy outlines needed to be implemented on top priority basis and without any further delay: –
Re introduction of farm subsidies to the extent of at least 50% of the value of the products.
Strong price support as in Thailand.
Refixation of the prices of agricultural inputs and ensuring their easy and cheap availability to the farmers.
Mechanization and modernization of agriculture through intensive research and extension programs for increasing yields.
Setting up of agro-industries like food and fruit processing plants, Agro- machinery factories, extension of irrigation facilities, rural electrification etc.
Change of cropping pattern, switching over to more profitable produce like vegetables, fruits, livestock, poultry, fisheries etc.
Development of basic infrastructure likes road highways and transport.
Skill development among farmers through education, healthcare, family planning, training and easy access to information through radio, TV, cinema, telephone etc. as in South East Asian countries Japan and South Korea.
Setting up of raw materials related industries in the rural areas, which will galvanize rural economy.
Formation of rural co-operatives, restructuring and reorganizing credit facilities and arranging better marketing of agricultural produce.
Forming agri-food consortia with the SAARC countries to gain comparative advantage and better bargaining clout in the international market.
The measure noted above fall within the category of targeted development. Since most of the poor live in the rural area. Unless agriculture is developed their condition will not improve.
Tea Garden in Bangladesh
APPROACHES TO POVERTY REDUCTION: The poverty reduction program includes:
Poverty reduction through enforcing higher investment in social sector.
Poverty reduction through fostering an accelerated sustainable growth process.
Poverty reduction through promoting targeted income and employment generating programs designed for the vulnerable segment of rural poor.
The Engineers are the key element for the timely execution of all development programs of physical infra- structure, setting up of new industries of small & medium scale, ensuring protection against natural diseases etc. But for the context of poverty alleviation, 40% of the rural & urban families should be the target of all national & local poverty alleviation efforts. Poverty alleviation programs must be based on the smallest social units in rural areas i.e., Communities, Upo- Zilas, Unions & Paras.
Small-scale rural food industries such as Bakeries can employ 10-15 woman of the village; lozenge/toffee-making unit may employ 20 workers. Private fish-tank can be developed, and a few poor persons can be benefited from fishing. The government “beel-area” borrow-pit may be developed into large/small fish tank. The landless population may be given the opportunity to get good and regular income from fishing, Duck rearing,
Growing banana trees, pineapple and vegetable on the banks of the tank. A large number of poor families may use the unused land near the house from ½ decimal to 1 decimal size can grow vegetables 3-4 times a year. This may be a good source of earning. Intensive scheme for rearing cattle, cows, goats are to be undertaken for a protein source.
Productivity of the small land holding of the poor can be doubled or tripled through manual irrigation by “treadle pump” or hard pump ensuring multiple cropping, better inputs and technology; the technology for holding the high yielding variety of grain for long term storage is still unknown to our farmer. Small-scale storage bins & new technology for storage will help the poor to store their product till market prices are advantageous.
Business communities will work hand in hand with the Engineers in developing the following improvements, which will promote the rural areas & strengthen the local economy.
Mechanized crop drying and releasing/reclaiming the drying yard especially at the mill premises for production.
Improved and appropriate technology for seed production, storage, holding the fishing upto 24 hours of marketing, simple irrigation and harvesting tools (produced by BARRI) and so forth.
Use of solar energy and other non-conventional energy sources.
Country boat mechanization & improvement of the mechanized country boat.
Setting up of light engineering industry and strengthening the existing.
Rapid expansion of the cottage industry.
Development of small industries at the rural level.
Out of the above tasks the effective of improvement of country boat mechanization, light engineering industries and treadle pump is given below:
After mid 1980’s the situation in country boat sector changed dramatically. Mechanization has taken place on large scale with the help of imported low-cost diesel engine for irrigation almost in an indigenous fashion by the boatmen themselves without any assistance from outside. This change gives the boatmen increased financial benefit.
The gross income has almost doubled after mechanization. On the other hand, contrary to believe, there had not been any major unemployment as a result of mechanization. In fact, there has generated additional activities due to mechanization.
The engineering section of Bangladesh Small and Cottage industries Corporation with its engineering decision took some equal credit projects in Dhaka area in 1985 for the strengthening of the efficiency, productivity of these industries. There were some training components in the program also. Out of total credit amount of Tk. 50 million, Tk. 37.30 million given to 173 industrial units of Dholaikhali (Dhaka) area & Tk. 6.6 million to 55 industrial units of Zinjira (Suburb) area. The loan was given purchase of new machinery & as an operational capital.
The decision about which economic activities, can be undertaken will depend on the physical resources available in a local area, the ability of those implementing the poverty alleviation projects to mobilize local society for these activities, market for small industry products and the like. Always the local context must determine what activities are viable and are most economical to promote. Program taken they do not suit the local context.
Rural Bangladesh
Finally, we can state that, the Businessmen can play tremendous role in poverty reduction in situation that is characterized by the following factors:
-strong political will,
-adequate appreciation of engineers’ & business community’s role
-ensuring Engineers & business community of unfettered opportunity to contribute
-favorable policy framework
-necessary resources allocation
-strict accountability
We are striving earnestly to make FBCCI into a more dynamic, internationally counted, truly representative & powerful organization of the private sector. But the challenges are enormous. The country is currently undergoing an unstable situation. The social conditions are in a deplorable condition. Level of erosion of social capital & corruption in society are beyond belief. Infrastructure is inadequate. Over-centralization of power as well as absence of rule of law & of human rights have taken toll on transparency, accountability & obligation of responsibility. On the other hand, interdependence, interaction & interfacing of new technologies, globalization of culture & economics is posing unprecedented threat to our daily lives, our trade & commerce as well as our means of production.
To face the challenges & play its proper role, the private sector needs a conducive environment & a level playing field. But the reality is opposite. Taking advantage of political unrest, gross social in-discipline, anti-social activities & anarchic tendencies have assumed immense proportions. Dishonest people are questioning honest people, corrupt people are putting the righteous & the dedicated people on the dock. Plunderers of national wealth are undermining those who are involved in creating wealth for the nation. Ignorant & uneducated people are throwing the gauntlet at knowledgeable & qualified society.
If this situation continues, then the philosophical fundamentals constituting the Republic will become defunct & the country may become unfit to govern.
Nevertheless, FBCCI as the vanguard of the private sector & the apex body of business organizations will continue to do its utmost, along with other civil society organizations to remove all obstacles standing in the way of economic growth & productivity. In doing so, it will be guided by a moral philosophy in promoting trade & commerce in line with sustainable socioeconomic development.
We firmly believe that by our combined efforts, brisk vigor & dynamism will enable us to return to the nation’s economy. Investment will increase. Wealth will rise. Employment opportunity will be created. Climate will change so that individual members of the society may be able to utilize their knowledge & skills in production & nation building mission. In effect, social disturbance will die down. Poverty reduction will only be possible then.
Poverty Reduction in Bangladesh: Poverty Reduction in Bangladesh: Poverty Reduction in Bangladesh: Poverty Reduction in Bangladesh
The global economic environment is now marked by momentous changes. There are two apparently opposite trends developing simultaneously in the world. On the one hand, countries are moving towards global economic integration, particularly after the conclusion of Uruguay Round of GATT negotiations leading to establishment of World Trade Organization (WTO). On the other hand, developed and developing countries around the World are increasingly attempting at forming regional economic and trade blocs for intra-regional trade liberalization and economic integration. As the trend indicates, it is now widely recognized that global economic integration can best be achieved in a graduating or a step-by-step process through sub-regional and regional trade and economic cooperation.
Moreover “regional cooperation is fast becoming the key link” for success in the ever-continuing battle of mankind for its survival and prosperity. Countries with varying sizes, geographical features, and endowment of natural resources, with diverse religions, social complexities, political systems and different levels of growth and development are trying to find ways of establishing regional cooperation. In UNO’s efforts to achieve the goal of promoting social progress and better standard of life globally it is now increasingly felt that between the world today and its member states an intermediate stage is required to promote this objective.
Exploitation of the mutual advantages of trade and economic growth and of their link to geography has always been recognized as a vital tool for generating national and regional wealth.
The benefit of regional trade is an age-old reality and extensively dealt by Adam Smith even three hundred years before in his writing. He mentioned in his famous book “The Wealth of Nations.” I Quote
“The wealth of a neighboring nation, however, though dangerous in war and politics, is certainly advantageous in trade. A nation that would enrich itself by foreign trade, is certainly more likely to do so when its Neighbours are all rich, industrious and commercial nations. A great nation surrounded on all sides by wandering savages and poor barbarians might, no doubt, acquire riches by the cultivation of its own lands, and by its own interior commerce, but not by foreign trade”.
Unquote
For smaller nations in particular, it is even more vital because foreign trade enlarges the market and increases the scope and efficiency of division of labor, thereby increasing wealth and economic growth. Indeed, small countries in any particular region usually gets privilege and advantages out of the economically developed larger neighbor in the modern world. In 1995, in the context of Europe, Belgium and Sweden, two smaller countries neighboring France & Germany achieved trade ratios of 143 and 77 percent of their GDP respectively. In North American context we can cite the similar example for Canada and Mexico.
Regional Cooperation in SAARC
Regional Cooperation in SAARC
Regional Cooperation has two independent elements: that is, regional trade and regional integration. Let us examine the case of Regional Cooperation in SAARC ‘from these two parameters’.
Although one-fifth of the world population live in South Asian countries, they hold an insignificant position in the global economy accounting for only 1.9% of global GNP. Poverty is pervasive, bulk of the people are below poverty line in this region. Our region’s share in global trade is only 0.96% of export and 1.3% of import. The trade within the region is hardly 3% of our global trade and our countries rely heavily on the industrial economies for both import and export. The low volume of trade among SAARC countries means that the multiplier effects get their way to other countries, denying the region the benefits of higher production and employment. In the process we are contributing to growth of the economies outside the region.
There are several global factors that underscore the need for expediting the process of regional trade and economic cooperation among the South Asian Countries, as for developing countries of other parts of the World. Firstly, the developing countries particularly the countries in our region are being increasingly marginalized in the international trading community. Secondly the powerful trading blocs like European Union, NAFTA, and APEC among the major economies would further marginalize the South Asian economies. Thirdly, regional cooperation is now-a-days used as a dynamic instrument of accelerating the pace of development and economic growth.
Most of the countries of the world are increasingly trading with their neighbors and in fact, intra-regional trade often forms the bulk of the total trade of many regions in other parts of the world. Fourthly, the prospects of rightful and adequate improvement of the market access conditions in the developed world for the export of developing countries such as textiles, and clothings, agricultural commodities, footwear, labour-oriented products, etc. are not encouraging in near future even after establishment of free trade regime under WTO. Trade barriers against the export of developing countries are being multiplied on the pretext of environment protection, labour standard and other non-trade issues.
On the question of Regional Cooperation in South Asia, Indian Prime Minister Mr. Vajpayee in a recent statement underlined the importance of close regional cooperation for the progress of South Asia, and visioned that regional trade is going to grow faster as because there is unexploited potential in the neighbourhood. It is also important to liberalize cross-border trade to check black-market and underground trade as trade restrictions have given birth to smuggling, money laundering and other transnational crime. So it shows that we have little option but to develop regional trade both for economic development and also for maintaining socio-economic order.
Unfortunately Intra-regional trade in South Asia is yet below 5% of the total trade and 1% of total investment, whereas regional trade in case of NAFTA is 49%, EU 78% and ASEAN 53%. Given the population size and GDP growth in the South Asian countries, there are immense potentialities for growth of regional trade. But unfortunately the biggest impediments to regional cooperation is continuing to be posed by historical disputes, mistrust, armed insurrections and warlike situations between countries and sometime within the country itself. We may reap the dividend of regional cooperation by putting aside mistrust and dispelling unwarranted suspicions.
Poverty and low income syndrome in the South Asian economies pose a major constraint. It is also mocked as a “poor man’s club”. Savings and investment gap drives them to donors for aid. This in turn makes them dependent on industrialized donor countries for capital goods and input procurements. Hence, those South Asian countries which are capable of producing these goods fail to supply due to lack of funding. Countries of South Asia rely heavily on foreign capital to overcome the resource and trade gaps, and foreign capital is usually tied to import from donors or their allies.
SAARC Countries
Availability of technical know-how and adequate research base plays a catalyst role in development of product and promoting efficiency and complementarities. At present these facilities are lacking particularly in the least developed countries of the region. forging of economic integration would require cooperation and collaboration in the development of technical know-how and adequate research base in the region.
There is also the fear of economic domination of India among smaller countries in the region because of its central location, size, relatively advance stage of industrialization, relatively richer endowment of resources and comparative advantage in most goods produced. India alone constitute 3/4th of South Asian population and about 84 percent of value added in manufacturing. Against these apprehensions about Indian dominance, India is striving for more stronger link with global markets and developed economies than the countries in the region. Consequently, its imports from within the region are negligible accounting for only 1 percent of its total imports.
There is a popular misunderstanding that the cooperation between a large country like India and neighboring small countries like Bangladesh, Bhutan and Nepal cannot be a win-win case or in other words beneficial to both the small and the giant partners. That economic cooperation can be beneficial to both the giant and the small partners is amply demonstrated by the success story of NAFTA among the giant USA, relatively small but developed Canada and small & less developed Mexico. These countries historically remained apprehensive of each other. Canada and Mexico had the fear that they would lose more than gain by cooperating with the giant USA. The actual results of NAFTA have proved otherwise.
Communication gap is another important constraint to enhancement of South Asian economic cooperation. People in South Asia do not have information about markets and export potentials of each other. The data base of each country has to be significantly improved and networks of exchange of information have to be developed much wider more frequent than the existing official channels.
Political conflicts between the two major partners India and Pakistan remains another major obstacle holding back operationalization of SAPTA.
There is ample opportunity of benefiting from expansion of intra-regional trade in South Asia considering:
huge potential market of 1.3 billion people.
availability of relatively less expensive manpower in the region at all levels of skill.
availability of all varieties of natural resources shared in different degrees by the member countries;
wide possibilities of finding out enough complementarities because of wide disparities in industrial structure and resource endowments;
As regional economic cooperation develops, the South Asian countries will also gain collectively if they work jointly to expand markets for their products in other regions. The larger economies will benefit because of increased market for their products in the very neighborhood while smaller countries will benefit immensely if they gain easier access to vast markets in the neighborhood. The LDC members will also gain if the promised tariff concessions and removal of non-tariff barriers, special facilities and concessions as well as technical assistance are materialized.
But smaller countries can only benefit from the opportunities created by SAPTA if they expand their production base and share of value-added in the industrial sector in GDP. In addition to trade opportunities this requires the provision of infrastructure, industrial manpower, better credit system and improved information flow.
For the success of regional trade regional economic integration is a must. We must frankly state that we have enough exchange of ideas on the benefit of regional trade arrangements, but have given scantly attention on regional economic integration. For forming a successful regional bloc we should systematically take stock of the elements of complementarities, product-wise in built capacity, natural endowment, adjustment of division of labour and capacity for an economic integration. Then only we can dream of common currency and burial of all suspicions. Otherwise the free trade conception is likely be translated into creating market for the stronger economy on the weak ones. So for the sake of the continuity of the regional cooperation, we would again underline the importance of economic integration through equitable growth.
We should take lesson from the little progress of SAPTA, where list of products were exchanged for tariff and non-tariff concessions. But the implementation of the concessions has not yet materialized. The major constraints to effective operationalization of SAPTA are :
political conflicts between the two major member countries, India and Pakistan.
restrictive and resistant mind-set of various actors viz; the bureaucrats, inward -looking vested groups.
Easing and removal of these snags under the given state of things would be a long-drawn affair though not insurmountable.
We should shake of our apprehension about regional economic integration through equitable capacity building and natural distribution of labour and also of geographical advantages and avoid competition in the global market. This will rather strengthen our bargaining power in the external markets. In fact, the bigger economies of the region should help obtain all possible international concessions, assistance and collaboration in Favour of the LDCs of the region.
Regional Cooperation in SAARC
The flora and fauna of the South Asian region are more or less common. So, the geographical indication made by an individual country should not apply to the other country of this region to export similar items in the international market.
So, SAARC nation’s strategic approach towards regional trade arrangement and economic integration need to be reassessed taking into consideration the hard realities in respect of slow progress of tariff arrangements and also of geo-economic conditions of the countries of the region specially the big ones with relatively vast population, high level of industrial & technological base, richer resource endowment, high prospect of natural complementarities and establishing infrastructural linkage. In fact, it is necessary to create an equitable free trade area (FTA) in the SAARC region for setting up a base to face collectively the challenges stemming from globalization.
Regional Cooperation in SAARC: Regional Cooperation in SAARC: Regional Cooperation in SAARC: Regional Cooperation in SAARC
