The banking sector remains opaque and is characterised by poor asset quality
Bangladesh ranked 20th out of 22 Asian economies in making innovations, showing poor-quality in human capital, inadequate infrastructure and a lack of formal financial institutions, says a new study.
It also highlighted that Bangladesh has a small pool of skilled labour with highly skilled Bangladeshis often leaving to take up work overseas due partly to the result of the low quality education provided by the country’s state-run schools.
The report on Asian Development Bank’s Creative Productivity Index (CPI) released recently presented the results and analysis of how 22 Asian economies along with the United States and Finland fared in the Index developed by the Economist Intelligence Unit.
Besides, Bangladesh ranked 129th out of 143 countries in Global Innovation Index 204 carried out by Cornell University, INSEAD, and the World Intellectual Property Organization.
Japan ranked at the top of the index among Asia-Pacific economies, followed by South Korea and Taiwan.
In the ADB’s CPI, India ranked 15th and Pakistan 23rd among the Asian economies.
CPI measures the innovation efficiency—how proficient economies are at the turning innovation “inputs” such as skills or infrastructure into innovation “outputs” such as patents or scientific publications.
“As countries seek to innovate to avoid middle-income traps, all governments—especially those with limited resources—need to be sure that their investments boost both efficiency and productivity, benefiting their economies and people, and move to a knowledge-based economy,” Bindu N Lohani, Vice-President for Knowledge Management and Sustainable Development at ADB, said in a statement.
For outputs, Bangladesh is ranked 21st, owing particularly to a low performance on macro outputs, according to the report. It said although Bangladesh is close to the back of the pack in terms of firm dynamics, this is still the country’s highest-scoring macro indicator.
It has a negative ratio for net migrant inflow or outflow, showing that more people are leaving the country than are moving there.
However, labour turnover is relatively fluid in Bangladesh, characterised by relatively lax regulation and the absence of large trade unions.
In the area of competition, the freedom to compete in Bangladesh is on a par with that of Japan, Taipei and China, according to it.
It said several companies in Bangladesh complain about the lack of skilled technical and professional personnel in the local workforce, and many tend to look elsewhere to recruit high-quality employees.
The country also suffers from inadequate infrastructure particularly a lack of energy supplies and a poor road network.
Under its long-term Digital Bangladesh initiative, the government aims to boost growth in information and communications technology (ICT) services and improve Internet connectivity, but more needs to be done to increase the pool of skilled technical labour if this outcome is to be achieved.
The report suggested that Bangladesh is in need of better financial institutions, at a ranking of 22nd out of 24 economies, to improve its productivity.
The banking sector remains opaque and is characterised by poor asset quality.
Source: Dhaka Tribune