The current trend of living lives and doing business is more technology-driven, and the scenario can be taken from the existing way of doing things in day-to-day activities. The digital economy encompasses all economic activities powered by digital technologies and the internet. It involves producing, distributing, and consuming goods and services delivered through digital channels. Embracing the digital economy means adapting to new technologies, fostering digital literacy, and capitalising on the opportunities created by the digital revolution.
The world is changing fast due to information and communication technology (ICT) and its advancements, and the idea of the digital economy is becoming essential for shaping how countries will grow in the future by utilising contemporary ICT technology. For a country like Nepal, getting into the digital economy can bring many good things, like growth, new ideas, and success. One big way to do this is by smartly using software outsourcing and Business Process Outsourcing (BPO) services. These things can use Nepal's unique strengths and help its economy get better. The concept of a digital economy can make Nepal grow more for everyone, create new things, and be known worldwide. If Nepal uses software and BPO outsourcing well, it can speed up how its economy gets better, generate jobs, generate financial revenue from other countries, and use better technology. Nepal can make a bright digital future by improving its tech skills and strengthening its digital stuff, which could help decrease the brain drain.
Nepal's outsourcing journey is full of opportunities for growth and success. It's a story of doing better and aiming higher in outsourcing. Over the last 15 years, Nepal has gained little popularity from outsourcing areas. In 2020, Nepal earned $287 million by offering ICT services to other countries. Recently, there's been better news, and reports from Nepali media reveal that this number has grown impressively to $515 million in mid-2023. This growth is mainly due to outsourcing tasks such as BPO, software, and services. Nepal's progress in outsourcing is clear from these numbers. Increasing almost double in 2 years shows how much Nepal has improved in outsourcing work and businesses.
The success story here is about software outsourcing, which is doing well. The growth of software development and support services also adds to Nepal's progress. These numbers are not just about money; they show how Nepal is becoming better and better at outsourcing and improving its status in the global business stage.
Nepal doesn't need to look too far for good examples and lessons; it can draw several lessons from India and China about enhancing their economies through digital transformations. Through their economic experiences and by adopting some suitable lessons, Nepal can work towards building a more robust economy that benefits from its unique strengths and contributes to global economic growth. While Nepal might not match the scale of business they're involved in, it is beneficial to take advantage of our proximity as good neighbors. For example, India has established itself as a significant player in the global economy, especially in the technology and services sectors. With a population of over 1.3 billion, India has a large and skilled workforce that has contributed to its success in software development, IT services, and business process outsourcing. For instance, the IT sector in India is a significant contributor to its economy, accounting for billions of dollars in revenue and employing millions of people. At the same time, China's rapid economic growth over the past few decades has been remarkable. It has become a manufacturing powerhouse, producing a wide range of goods for global markets. The country's special economic zones and focus on export-led growth strategies have played a crucial role in its economic development. China's ability to attract foreign direct investment and build robust manufacturing infrastructure has propelled it to become the world's second-largest economy.
As we focus more on software outsourcing, the BPO can be a significant example that could be a backbone for economic growth. As BPO services expand, they contribute to the country's gross domestic product (GDP) growth, boosting the overall economy. At the same time, software outsourcing involves delegating software development tasks to external organisations, often in other countries. Nepal can tap into the software outsourcing market by leveraging its skilled workforce, competitive costs, and growing digital ecosystem. As a country with a rich pool of talented software developers, Nepal can offer cost-effective solutions to global clients.
Nepal can benefit from software outsourcing, such as job creation and foreign exchange earnings, by exporting software services to international clients. Software outsourcing can create a significant number of high-value jobs for Nepali software engineers and developers, contributing to the country's employment rate and skill development and helping to strengthen Nepal's economic stability. Knowledge transfer is an additional area that allows collaboration with global clients and exposes and provides global visibility. Nepali professionals can benefit from the diverse projects and cutting-edge technologies, fostering knowledge transfer and skill enhancement. Successful software outsourcing projects can enhance Nepal's reputation in the global tech community, which helps attract more investment and business opportunities.
BPO is another broad-spectrum subject area involving external service providers contracting out non-core business functions, such as customer service, data entry, finance, and human resources (HR). Nepal's educated workforce, English language proficiency, and lower labour costs make it an attractive destination for BPO services; as a whole, Nepal can increase employment opportunities from BPO outsourcing. It can create many job opportunities for young graduates and professionals in customer support and data management. Working in BPO services exposes Nepali employees to global business practices, communication skills, and industry-specific knowledge, enhancing their skill set. BPO outsourcing diversifies the economy by incorporating service-based sectors and reducing dependence on traditional industries.
Every day, the youth population is increasingly interested in moving abroad for various reasons. Surprisingly, many young individuals and valuable human resources seek opportunities in other countries. Suppose the government shifts its focus towards developing the digital economy immediately. In that case, it has the potential to generate income from online activities and play a role in curbing the outward migration of young people from the country. Making the most of our skilled workers, especially in technology and services, is like getting inspiration from areas that help businesses grow.
Nepal's business aim is to inform the world about the valuable things Nepali companies and talent can offer. Do not just want Nepal to be considered an ordinary place publicised; Nepal wants it to be seen as a top choice for technology, services, and assisting companies. Showcase in-house products and expand internationally; it builds trust for doing business with Nepal. Branding Nepal involves creating a plan for IT business in Nepal. By positioning Nepal as an alternative hub for software and BPO, Nepal can make the country stand out in technology. This approach helps to shape Nepal's identity and reputation in the world of technology.
The World Bank 2020 report recommends that the Nepalese government design universal social protection and policies supporting greater productivity, skill development, and human capital in the new normal. While the potential benefits of software and BPO outsourcing are promising, Nepal must address infrastructure development, regulatory frameworks, and skill enhancement challenges. Investments in digital infrastructure, cybersecurity, and education are vital to creating an environment conducive to the growth of the digital economy.
It is essential to position the country as a promising outsourcing hub. By promoting Nepal's strengths globally and showcasing its software, services, and BPO capabilities, the nation is taking steps towards establishing itself as a reliable and attractive destination for outsourcing needs. In conclusion, it is necessary to redefine the use of modern technology to boost Nepal's software industry and incorporate present-day technology for optimal software development in Nepal. Examples of contemporary technology are big data, data science, AI and machine learning, cyber security and information security, cloud computing, blockchain technology, mobile app development, IT operations, and governance.
A strategy for innovation and widespread domestic usage of information Communication Technology (ICT) in countries like Nepal can significantly contribute to developing a robust digital economy. It also helps enhance their competitive strength in the global market by fostering technological advancement and digital connectivity.
(The author is an information technology expert.)