Twenty-four Bangladeshi technology companies participated in Japan's largest IT related trade show in Tokyo in May 2019. Japan IT Week Spring 2019 was a gathering of technology businesses to engage with potential Japanese buyers of technology and showcase their solutions and services.
Bangladesh Association of Software and Information Services (BASIS), in cooperation with Japan International Cooperation Agency (JICA) and Bangladesh Embassy in Japan, organised the Bangladeshi contingent of the twenty-four participating companies. Major established Bangladeshi IT outfits and startups - DataSoft, LeadSoft, Brain Station 23, and Graaho were among the participants. The trade show was an opportunity for Bangladeshi companies to evaluate their strengths and position in one of the globally competitive IT markets.
The trade show featured different areas of enterprise IT covering emerging technologies, cloud technologies, security, embedded systems and software development. Bangladesh pavilion, housed under the software development section, was located in the Aomi exhibition hall at the Tokyo Big Sight Convention Centre. The pavilion accommodated each participating company with a desk and a conference facility to facilitate more intimate discussions with potential buyers. The pavilion was located parallel to the Sri Lankan one, across the corner from the Philippines Pavilion and directly facing the Vietnam Pavilion. This provided Bangladeshi participants a healthy competition and an opportunity to observe how other countries have organised their platforms and approached the Japanese market.
As the second largest developed economy and third largest economy by nominal GDP, Japan has a significant appetite for IT services. IT spending by Japanese companies is forecasted to be US$ 130 billion this year and will continue to grow. This upward trend in Japan's IT spending, like everywhere else in the developed world, is primarily driven by the need to modernise the existing systems and adopt emerging technologies. In Japan, most systems in production today were developed more than 15 to 20 years ago and are at the end of their life cycle. In addition, Japanese companies recognise the significant advantage that comes with deploying emerging technologies like AI, IoT and Blockchain to stay globally competitive.
Japan's Ministry of Economy, Trade and Industry estimates that by 2030 approximately 0.6 million technology positions will remain vacant due to a shortage of qualified technology professionals. Japanese businesses, therefore, are either seriously considering adding foreign engineers or pursuing more cost-effective strategies such as offshoring to fill in the gap. Few well-known Bangladeshi companies are already working with Japanese companies on such strategies.
Comparatively, however, companies from Vietnam and Philippines are currently ahead in capitalising on this trend. Unlike Bangladesh, these countries can overcome a key barrier in doing business in Japan. Most businesses in Japan are conducted in Japanese and therefore overcoming the language barrier is a requirement for any IT company and professionals planning to serve the Japanese market. Vietnamese and Filipino companies have overcome this barrier with ease because of connections either the founder or the key employees have developed with Japan at some point in their lives. It seems most of them who are doing well with Japanese clients and businesses have spent significant time in Japan either as students in Japanese universities or as employees in Japanese corporations. This, however, should not discourage Bangladeshi companies from considering Japan as a key market for their products and services. While Vietnam and Philippines might be ahead, they are also facing pricing pressure and talent shortages. This offers strategic opening for Bangladeshi companies to step in and partner up to break into the Japanese market.
While overcoming language barrier is a significant challenge, it alone is not enough for the Japanese market. Bangladeshi companies are currently well-positioned from a pricing standpoint with lower resource cost, but they must also quickly learn how to attract and retain Japanese clients. This will require Bangladeshi companies and technology professionals to acknowledge and overcome their own cultural hang-ups and inability to self-critique. They must know how to approach and communicate with the Japanese buyers. They need to realise that showing up at a trade show is not enough. They must adopt, prepare and train their employees in the norms of Japanese business culture and, most importantly, they must focus on quality. If Japanese businesses are known for anything then it is their dedication to perfection, attention to detail and focus on quality. Bangladeshi companies, therefore, must pay attention to and invest heavily on service delivery.
It was an exciting week in Japan. Part of the Bangladesh pavilion directly faced an entrance to the Aomi Hall and featured a podium with large TV screen and sitting arrangements for buyers to learn about Bangladesh's IT infrastructure investments through a continuous presentation.
The organising committee arranged a tiger mascot. On the last day of the event a magic show was arranged to attract many potential buyers to the Bangladesh pavilion. In addition, a B2B (business-to-business) matchmaking event at the Fujitsu Research Centre, the day before the trade show generated interesting conversations with several Japanese companies. While these conversations were an excellent start and great for learning about the opportunities Japan has to offer, they also highlighted the significant amount of work that are needed for Bangladesh to play a leading role in the Japanese IT market.
Bangladesh's success will depend on how companies are able to learn quickly, adapt easily and execute efficiently. In that sense, Bangladesh has a long road ahead, but Japan looks very promising.
Rabbul H Mirza is managing director of Graaho, a leading Bangladeshi technology developer. He can be reached at rabbul.mirza@graaho.com