Handy, AdRoll, Lyft, NJOY, Pure Storage, Airbnb, Uber- these are the most successful startup in the world, When the whole world inventing new thing to solving problems, people are starting work with new ideas and the government should give them priority. Bangladesh has many startups but they are facing lots of problems. It is new for Bangladesh to adopt the strategy of startups, but the Bangladeshi government is not enough concerned about this to help those entrepreneurs.
Bangladesh’s unemployment rate is projected to trend around 5.40 percent in 2022 and 4.70 percent in 2023, according to our econometric models. Because of our education system, after graduation, all students are turned into jobseekers. But Bangladesh does not have enough working places to give them a job.
It has been reported in Dhaka tribune that 66% of the students who graduated from the colleges affiliated with National University are unemployed. In our colleges and universities, they teach students only from the academic books and the whole education system is based on memorization. That’s why students are not able to generate new ideas to make something different. Students are afraid of business because they don’t know how to do it. They have no practical idea or knowledge about operating a business, but some of them take the risk and try to do something, but the main problem they face at first is getting enough money to start a new business of their own, and families are afraid to give them money.
According to the latest labor force survey by the Bangladesh Bureau of Statistics (BBS), the unemployment rate among the educated population in the country is 47%. Every year, 20 lakh people are added to the labor force of the country, but there is no creation of employment in that proportion. As a result, a large portion remains unemployed, said the BBS. Bangladesh has a total of 76 banks, with 6 of those owned by the government, but sadly, there is no bank offering any programs for young entrepreneurs. Many banks claim that they are working for young entrepreneurs, but they have some very difficult terms that cannot be fulfilled by a young entrepreneur.
Our neighboring country, India, has the third-largest startup ecosystem in the world with about 60,000 startups. These include ShareChat, Cred, Meesho, Nazara, Moglix, MPL, Grofers (now Blinkit), upGrad, Mamaearth, GlobalBees, Acko, Spinny and others.
According to “The Economic Times,” Indian startups will have raised $42 billion by 2021. India-with 90 unicorns-is the third-largest unicorn hub behind the US (487), China (301), and the UK (39). These startups are not only developing innovative solutions and technologies, but also generating large-scale employment. Today, one out of every 13 unicorns globally was born in India. As per the report, Bengaluru was the city with the most unicorns. Fintech, e-commerce and SaaS (software as a service) have seen the maximum number of unicorns, while health-tech, ed-tech, D2C, gaming and crypto are also close behind. At the time, Flipkart was the most valuable unicorn ($37.6 billion after raising $3.6 billion in July 2021), while Mensa Brands was the fastest to turn unicorn (it took only 6 months to turn unicorn in the November 2021 round after raising the first $50 million round in May 2021). India has seen four decacorns (companies with a valuation of USD 10 billion and above) so far- Flipkart, Paytm, Byju’s, and Oyo Rooms.
According to TBS, Bangladeshi startups brought in over $125.7 million in 2021. “Truck Lagbe”—a Bangladeshi startup—received $4 million in funding in Series A from the International Finance Corporation (IFC), the private sector investment wing of the World Bank. The IDLC VC fund co-invested with IFC in this deal. Chaldal, another rising e-commerce platform, received $10 million worth of foreign funds for expansion in series C. Earlier, “Shop Up” also received Tk6.4 billion ($75 million). The history of startups in Bangladesh goes back to the emergence of Bkash in 2010, funded by “Money in Motion” of the USA and Brac Bank Ltd. Subsequently, IFC financed the project in 2013 and the Bill and Melinda Gates Foundation did so in 2014. Ant Financial, a sister concern of Ali Baba provided funding to Bkash in 2018 when a few of the early investors withdrew. Bkash’s valuation soon rose to approximately $1 billion (as per the Annual Report of Brac Bank), making it the first unicorn in Bangladesh. It took around eight years for Bkash to reach this level.
Startups such as Bkash, Pathao, and Brain Station 23, recently bade goodbye to their initial investors. Although not disclosed to the public, however, there is no reason to be complacent yet. Startups from competing nations are doing far better than us for instance, startups in our neighboring country, India. According to “TBS,” Bangladesh ranks 116th in the global innovation index while India ranks 46th. Even Sri Lanka is ranked 101st, 15 places ahead of us, implying the poor and inhospitable startup ecosystem in Bangladesh.
India’s start-up investment is around 0.3% of its GDP, which is estimated at $3.05 trillion (nominal, 2021). On the other hand, Bangladesh received $39.5 million in 2020, which is.01% of its GDP of 353 billion (nominal, 2021). That means India’s startup investment GDP ratio is 33 times higher than ours.
Most Indian startups began their journey back in the mid-eighties, while the very first Bangladeshi start-up, Bkash, was launched only in the 2010s. So, they are roughly 25 years ahead of us in terms of start-up development.
According to Dhaka tribune report, about 3.6 million people in Bangladesh are expected to remain unemployed this year, surpassing the pre-pandemic level by half a million, according to a report by the International Labor Organization (ILO). The country’s unemployment rate will likely remain at 5% in 2022, higher than the pre-pandemic level by 0.6%.
The impact has been particularly serious for developing nations that experienced higher levels of inequality, more divergent working conditions, and weaker social protection systems even before the pandemic, “adds the World Employment and Social Outlook: Trends (WESO) report 2022.
So our government should work on those issues to develop a better startup ecosystem in our country, but mostly we have to develop our educational ecosystem so that our students can think about innovations. In general, we need to include practical work related to the subject to improve skills, such as computer operating skills, and we should avoid or completely remove the memorization method of study. By reducing session clutter and also maintaining class discipline, we should improve the quality of our national university education. That’s how we can reduce our graduate unemployment.
The author of this article is from Port city international university.