The current situation of information technology (IT) in Nepal is encouraging. In 2022 alone, a study led by the Center for Inclusive Development Studies (IIDS) showed that 67.92 billion (US$ 5.15 million) worth of IT services were exported abroad. More than 1000 companies and 50000 professionals are working for this contribution.
IT is a borderless field. It can play a big role in the social and economic transformation of Nepal. To institutionalize this potential of the IT sector, we have registered Nepal Software Companies Association (Nash IT), where more than 60 companies are affiliated.
Nash IT's mission is to make Nepal a technology hub and build a $5 billion IT industry in Nepal in the next ten years. According to today's exchange rate, 5 billion dollars is more than 6 trillion 67 billion Nepali rupees.
6 billion plus IT industry and role of government
It is possible to travel from 67 billion now to 5 billion dollars in the next ten years. But to make this possible, 'multi-stakeholder engagement' is necessary. The government has a big role in this too. The government should encourage the IT sector, prepare cooperation policies and create a comfortable environment so that Nepali companies can compete with other countries.
The industry should also invest to make itself better. Other sectors should also support the IT sector with investment, market access, etc. If all the stakeholders can come together and formulate a strategy, we can create an IT industry worth 5 billion dollars in Nepal in the next ten years.
There are two categories within the IT sector. One outsourced and the other a startup. Outsourcing means bringing the work of a foreign company to Nepal. It has been 20 years since Nepal started outsourcing. In the last 20 years, Nepal has matured to work in the outsourcing world. 40,000 manpower is involved in outsourcing. It is necessary to scale the knowledge learned from here.
The next step is startup. A startup is a work done on the latest idea. We can take Khalti, Iseva, Pathao as an example of this. We should promote startup companies.
In the current situation, the preparation of startups working for Nepal has been good at one level. Startups established to support Nepal have also been successful. But saying that, we should not forget that our biggest market is abroad. We are not sufficiently prepared on how to capture the foreign market.
For this, it is necessary to develop an ecosystem. Nepali startups should partner with international organizations to globalize their reach. The government also needs to come up with a policy that can enable Nepali startups abroad.
The sad thing is that these days, we are talking about investment conferences. We are asking investors to come and invest in Nepal. But we, a tech company whose market is global, are not allowed to go abroad. We cannot do everything sitting here. It is not possible to do everything remotely.
You have to go to the market. If my company's client is in America, then I have to have an office there, I have to have the necessary manpower and I have to be able to raise investment. We do not have such a facility today. When the government does not make such arrangements, startups with good ideas have started to die today.
If we are not able to facilitate small steps, we will not be able to create a 5 billion dollar industry under any circumstances. In my opinion, our ability to compete compared to other countries is decreasing. If there is no policy reform as soon as possible, the contribution of billions will drop to crores. I see that possibility.
Now big foreign companies are trying to escape from Nepal. Because there are many policy ambiguities and complications in Nepal. Big companies are afraid of where they will be 'trapped'. They are thinking that they should not do business in Nepal anymore. We should not let that happen.
Nash IT is working together with the government to create a business-friendly environment in Nepal. The government has been giving necessary suggestions for facilitation. They are also listening. But 'speed' has not reached. When we do one thing, another country has already done 10 things. The IT sector is dynamic. Every day something is changing in IT.
Nepal should also be able to keep pace with the rapid development of technology. Do not delay. If we cannot 'hurry up' to keep pace with technological development, we will fall behind. There may be a situation where the opportunity is not caught. For this, multi-stakeholder engagement and policy reforms are needed. It is urgently needed. If this is the case, it will be easy to work. After that, everyone can work together to further advance this area.
Startup Incubator and Accelerator programs are created to support startups abroad. Through such programs, startups are taught about giving space to work, providing mentorship, arranging seed funding, marketing, sales, pricing, legal and pitching to investors. The government should create such an ecosystem in Nepal as well.
Another thing, it didn't just happen. Now, if my company's market is America, then the government should help me to go to the American market.
Manpower Development and Employment
There are two categories in IT, outsourcing and startup. Coming to 67 billion, we have developed 50,000 professional manpower. To create a 5 billion dollar IT industry, there should be ten times growth than the current one. For this, it is not necessary to have 500,000 manpower instead of 50,000 manpower.
Now we have to increase our value. We have to acquire expertise. Just as the price of a general doctor and a surgeon doctor is different, in the same way it is necessary to 'specialize' yourself in the outsourcing world. So that we can do pricing like a surgeon. If we can increase our value in that way, we estimate that 300,000 manpower will be needed to build a 5 billion dollar industry. It is also possible to develop that manpower. The IT interest of the young generation is increasing.
Currently, 10,000 IT manpower is being produced every year. We can increase that number to 30-40 thousand in the next 3-4 years. In order to reach that, perhaps some changes should be made in the policy. The government should reconsider the 'quota system' in IT education. The capacity of teachers should also be enhanced. The government should come to digital right from the school level, it should be pushed even if there is an opportunity. If this can be done, it is not very difficult to produce 3 lakh manpower.
The work done by 3 lakh people can create employment for another 10 lakh. For example, Pathao may employ 50 IT engineers, but Pathao has created many others. We can create a lot in the same way.
When it comes to employment, IT is thought to be only technical. That is a misunderstanding. IT requires both technical and non-technical manpower. Outsourcing requires 70 percent technical people, while the remaining 30 percent requires non-technical manpower such as project managers, content writers, designers, digital marketers, and quality assurance.
Similarly, startups also require 30 percent technical and 70 percent non-technical manpower. Not everyone who works in a startup is an IT engineer. A startup needs manpower to work in customer service, marketing, sales, data processing, etc. That's why start-up and outsource genres should be combined. So that jobs can be created for both technical and non-technical.
Investment in infrastructure development
Infrastructure is also an important aspect in building a $5 billion IT industry. If there is no internet connection, there is no IT sector. Looking at the situation 5-10 years ago and now, connectivity has improved a lot. At that time, to make someone work from home, Ncell Dangol, Worldlink, and Subisu all had to be installed. There was a situation where the backup should also be backed up. Not so now. It has been very reliable.
However, the reliability should be further increased. Now there is a need to work on backup and speed. Electricity has also improved a lot in the last 5 years. Sometimes the lights go out. It can be improved. Even if it does not stop our growth, we can do better.
The IT park built by the government in Banep could not be put into operation. There is no point in thinking that Banepa's IT park has failed. We need an IT park. Not one, but ten are needed. The government should invest in IT park infrastructure.
An IT park is a place where everything is already available. Today, 100 people are working in my company, but if the team has to be increased to 300 people, it is difficult to find a building that can house 300 people. Or if you have to search or scale up, it will take 2-3 years. Therefore, there is also a problem with scaling. IT Park can solve that.
We can keep incubators and accelerators in the IT park. We can make a conference hall to hold various IT events. It is necessary to have an ecosystem in terms of infrastructure. The government is interested in it. It seems that there will be some progress. But it takes 10 years to build an IT park at the speed of Nepal. The IT sector does not have time to wait for 10 years. Every day is important for us. Therefore, you should plan for short term and long term.
Many buildings are vacant in Kathmandu. Vacant buildings can be leased by the government for 10 years. By spending some money on it, for the time being it can be done like an IT park. Taking customers and investors from abroad to a bigger place will have a different effect. It is 'seeing in believing concept'.
If we rent a building that can accommodate 500 people, if we rent 10 buildings, we can accommodate 5,000 people. By renting an empty building and spending some money for the time being, the government can do the work from the IT park from such buildings. We have also given suggestions to the government. But in the long term, a large infrastructure should be developed.
(trust IT Chairman and quickfux technologies (Based on Kamal KC's conversation with CEO Richan Shrestha for ICT News)