Articles

 

 

 

 

 

Management Information: Limit and Extent
Gaining New Ability

Export of IT Services
Data Communication in Nepal
The role of IT: Efficiency or Burden?
Sharing Multimedia Endeavor
Intelligent System
Memory Hierarchy
Emerging Technologies

   


Export of IT Services

Published in CORE, Jan/Feb, 1995

Background

Nepal's main source of earning foreign currency in the past and at present have been the carpet and garment industries. These industries are utilizing raw materials mainly from other countries and are using foreign laborers us redirecting the funds It, other countries.


Tourism is growing as the third largest industry with its orientation towards the sale of services and is cashing in on out country’s natural beauty. However, it is difficult to assess the damage done to our cultural heritage and environment. Due to the increase of rile Nepalese population and the need to feed them first, we are exporting only limited agricultural products to out friendly countries.


The time has already come when Nepal should look for a new dimension where there are possibilities of earning foreign currencies and utilising the unemployed human resources who will happy to get blue collar jobs. In this age of the information revolution, where magnetic  media are taking the place of papers, there are a lot of opportunities in the world market for  converting information on paper to magnetic  median usable with computers. Nepal should thus prepare herself so that she can also reap the benefits of this emerging service industry in the world and strengthen our economy by grabbing even a tiny piece of the whole cake.


Apart from services such as word processing and map digitising, services such as data processing, desktop publishing, hardware assembly, software development and technical consultancies have large prospects of being significant foreign currency earner for Nepal.


Our two giant neighbouring countries, India and China are already in the fray of exporting IT services. China has sold 3.26 billion Dollars worth of IT products in 1993 with 30 percent growth over previous year. India's turnover of IT industry in 92/33 was 1.082 billion Dollars and is having a growth over 91/92 of 23.77 percent. India's software export alone in 92/93 amounts to 225 Million Dollars. Countries like Philippines, Thailand, Vietnam are already ahead in this business of IT export and Singapore can be considered the best in reaping the world market as compared to its physical size.


Nepal has also started exporting some IT services to US, Germany, Japan etc. but the amount so far has been negligible with respect to the national income.  

 

Feasibility of IT Services

The facts behind the feasibility of exporting IT services are the following:

 

Cheap Labour

Labour rates in Nepal are among the cheapest in the world. We have a lot of school-leavers who are unemployed and do not want to do physical work in carpet or garment industries.

 

Low Investment

Establishing an IT service industry is possible even with a small investment. One can start the business for as little as Rs 50,000 with one computer in his house.

 

Cheap Training Cost

Semi-skilled labours to be used in the industry can be trained in a short duration such as one month.

 

No Disadvantage of Lack of Sea Ports

The products of the industry can be exported without facing the difficulty of a land-locked nation the the use of air links or telecommunication lines.

 

No Environment Pollution

IT related services does not have side effects such as environment pollution.

 

Present Infrastructure in Nepal

The number of companies dependent of IT related services (IT products sale, software development, consultancy, computer training, maintenance, data processing, word processing , DTP etc ) are estimated to be exceeding 200 all over Nepal and around 150 in Kathmandu valley alone. Many companies in Kathmandu valley are equipped witht eh latest computers and have LAN system. Some  are even equipped with minicomputers and UNIX operating systems.


The number of computer graduates in Nepal is estimated to be 100+ at present and 40 – 50 graduates annually will be returning to Nepal in the coming 3 to 4 years. After four years, approximately 20 computer graduates will be produced annually in Nepal only.


Many organizations (public and private) in Nepal have already started data communication facilities through telecommunication lines. Many organizations have access to global links through facilities like INTERNET.

 

Hindrances to IT Services Export

Although Nepal and India had started using computer during the same time, India is trying to penetrate the would market of IT services especially in software development and technical consultancy areas. The major hindrances for Nepal in export IT services are :

 

Lack of IT Professionals

Nepal did not have in the past its own source of producing computer professionals and thus the number of computer professional at present is not enough to be able to support the demand for computer professionals.

 

Under Developed Local Market

Nepal is far behind reaping the benefits of the technology by utilising it for increasing one’s productivity and efficiency. Computers are merely being used as a word processor. Especially large public and private organisation have not been able to use the technology for increasing their performance. There is lack of knowledge regarding the role of software in computers, the cimpo9rtance of integrated approach to system development and the management of information. People buy computer hardware but do not want to spend on software or management of computer system. Due to these reasons, there is limited use of computer in Nepal.

    Unless the use of computers spreads throughout Nepal, one can not say to other countries that we are able to provide services relation to information technology.

 

Poor Image in the World

Nepal is renowned in the world for its Himalayas, and natural beauty but most people have the feeling that it is technologically backward and may not be able to provide IT services. Any body or organisation going abroad for marketing its IT services will have difficult times in convincing the possible clients of the services.

 

International Marketing

Many small business in Nepal can not afford the cost of Marketing services outside Net)al especially in Europe, USA, Arabian countries etc. No organisation has taken a coordinated approach. HMG has not been able to visualize the possibilities of this industry so far.

 

Lack of HMG Policies for the Emerging Industry

No government organization has been made responsible for providing the policies to boost IT industries in Nepal. HMG must be able to provide enough facilities for foreign investors to come to Nepal to open joint ventures regarding this industry. The talk of an IT park was initiated by the Nepali Congress government and we should hope that the present government will take it up further for the economic development of the country.

 

Data Communication

There is no separate data communication networks set up by any organization in Nepal. Although there is talk of X.25 services, Nepal Telecommunication Corporation (NTC) has not been fast enough to provide the services at a reasonable price. To be able to export IT services, this is one basic infrastructure requirements which should be available at an affordable price.

 

CONCLUSION

There is an immediate requirement for HMG to look closely into these matters and formulate policies that will foster the IT industry and encourage the foreign investors to come to Nepal. The idea of IT park should be followed up by ah the people involved with the industry, Computer Association of Nepal(CAN) and HMC. Organizations like Trade Promotion Center(TPC) should help to promote international marketing of IT services. There is even a talk of four years project for export promotion of computer software and services from Nepal to be supported by International Trade Center, Geneva and this matter should be encouraged by HMG, TIC and CAN to materialise.

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