“Implementation is key”

Biplav Man Singh, who served as president of Computer Association of Nepal (CAN) from 2004 to 2008, is currently Managing Director of Mandala  System Pvt Ltd and chairperson of Capital Market Technology Pvt Ltd.

Also the Advisor of Commodity Council under the FNCCI (Federation of Nepalese Chambers of Commerce and Industry (FNCCI), he possesses profound knowledge and experiences on the Nepali ICT sector. In this exclusive tete-a-tete with Nirjal Dhungana, editor of ceotab.com, he shares his thought-provoking opinions on crucial aspects of the sector. Excerpts:

  1. How do you view the general scenario of Nepali ICT sector?

Frankly speaking, the general scenario of the sector is grim. Its growth has been stunted even though it holds tremendous potentials.  The prime reason behind such anomaly is the lack of firm commitment on the part of the concerned authorities towards the sector.  For instance, they have been coming up with a number of policies and acts on information and communication technologies (ICTs) but the implementation of the same is very weak.

  • Could you give an example to justify that the government has been shying away from implementing the ICT related legal provisions?

The government launched digital signature back in 2015 which should be implemented under Electronic Transaction Act 2006 and Electronic Transaction Rules 2007. However, the government has so far been passive towards implementing the signature.

A digital signature is a special government certified identification code which is used to authenticate digital information such as documents, e-mail messages by the sender or the signatory to a document and ensures that the document is unchanged and genuine. So, its implementation is simply crucial to help make electronic correspondence and transactions legitimate. What  should be well understood is that  digital signature is the linchpin of e-commerce.

  • In your view, what are other problems inhibiting the growth of the ICT sector?

         First, the high cost of internet connectivity is smothering the smooth growth of the sector. Internationally speaking, the cost of such connectivity is going but, here in our country, the case is quite opposite. 

The current government decided to levy as high as 13 percent Telecommunication Service Charge (TSC) on use of mobile internet from the start of the current fiscal year.

As some 90 per cent of the entire internet users in the country are dependent on mobile internet, the very move has come as a great setback to such users.

Second, as many as  150 business process outsourcing (BPO) companies employing more than 50 people are not under the  tax net.  This is not only negatively affecting the government revenue collection but also impeding  the professional  development of the ICT sector.

Third, there is a complete lack of baseline surveys on the vital aspects of the sector. This is creating serious obstacles in setting realistic goals and measuring the progress towards them.

               Fourth, out of around 7,500 IT graduates Nepal produces every year, as many as 6,000 tend to fly to foreign countries,   This can be inability of the domestic  market to absorb them  by providing suitable job opportunities.

  • What is your take on the innate potentials  of the Nepali ICT sector?

In today’s digital economy, the sector indeed holds tremendous potentials. For instance, there is great  prospect for Nepal to further expand its business process outsource (BPO) market.

Outsourcing is the business practice of hiring a 3rd party to perform services and create goods that traditionally were performed in-house by the company’s own employees and staff.

 The annual turnover of the country’s market is estimated to be somewhere between Rs6 to10 billion annually. And, there are ample opportunities to augment the size of market buy focusing on specific areas like Knowledge Process Outsourcing (KPO) and Legal Process Outsourcing (LPO).

The  BPO market of our southern neighbor-India- is so big that it estimated at US $ 43 billion. One of the major reasons for such giant market is good skills of Indian people on English language.  Similarly, the Philippines is also

increasing its BPO market by leveraging its people with sound knowledge on English . The current size of its BPO market is estimated at US $ 15 billion. 

 Nepali people have also competitive communication skills on this language as their average TOEFL (Test of English as a Foreign Language) score is 600. So, Nepal could well  attract a significant volume of IT related jobs from foreign countries.

There is also a prospect to send Nepali students  to the  top IT companies in  reputed tech cities of India like Bangalore and Hyderabad  India  for internships. This could well equip them with necessary knowledge, skills and experiences on the changing trends and techniques on the international ICT industry that can be utilized back in Nepal.   

Similarly, there exist the potentials of coming up with business incubation programs to nurture innovative ideas and spur entrepreneurship in the ICT sector. 

International experiences show that 85 percent of IT ventures which do not go through such programs tend to fail. At the same time, it also found that the same percentage of such ventures tend to succeed if they go though the incubation programs.  Such programs are designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services like  physical space, capital, coaching, common services, and networking connections.

  • Apart from launching the business incubation programs, what other measures can be taken to promote the tech start-ups?

One of the measures might well be setiing up angel funds  to pool capital for investment in new IT businesses.

Experiences in other countries suggest that the angel investors play a key role in providing strategic and operational expertise for new ventures as well as social capital (i.e. their personal networks) in addition to providing money. Similarly, there is a need to effectively implement the Specialized Investment Fund Regulation, 2019 issued recently by the Securities Board of Nepal (Sebon).

It would allow tech start-ups and innovative business ventures, among others, to secure funding and financing from specialized investment funds like venture capitals and equity funds.

  • Lastly, could you point out specific measures needed urgently to expedite the growth of ICT sector as a whole?

First and foremost, it is important to note that the sector has witnessed growth to some extent over the last two/three decades. Such growth can be attributed to a number of policies made by the government like Communications Policy (1992), Telecommunications Act(1997), Information and Technology Policy (2000), Long Term Policy of Information and Communication Sector (2002) etc.

 Along with such policies, the moves like issuing licenses to independent VSAT operators in 1999 proved pivotal in especially impelling private players to enter into the ICT sector.

Similarly, the government’s periodic five- year plans along with IT Policy (2015) also stressed on promoting the access and use of ICT, for “generating employment opportunities, contributing to form knowledge-based societies and promoting knowledge-based businesses and industries”.

In order to material such goals, the only specific measure the government must is to implement its acts and policies sincerely and seriously. Otherwise, the idea of leveraging information and communication technologies to expedite the socio-economic growth of the nation will continue to be a mirage.

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