Bangladesh’s next economic leap will depend not on how much it spends, but on what it learns, builds and produces from that spending. Over the past two decades, billions of dollars have gone into infrastructure, energy, transport and digital systems. These investments have changed the landscape. But how much have they built domestic technological capability, upgraded industry and created high-skilled jobs?
This is no longer theoretical. If Bangladesh treats public procurement merely as purchasing, it will keep importing technology, creating limited local value and missing one of the most powerful tools of industrial transformation. Public procurement should use government purchasing power to build capability, strengthen domestic industry and create sustainable jobs.
The experience of Japan, South Korea, Germany, Singapore and China shows that transformation does not come from infrastructure alone. It comes from linking public spending with industrial development, technological learning, research and innovation. South Korea’s metro rail sector is a powerful example. When Seoul introduced its metro system in the 1970s, it relied heavily on foreign technology. But policymakers used the project to train local engineers, strengthen research institutions, require technology transfer and expand manufacturing. Today, companies such as Hyundai Rotem export railway technology worldwide. The lesson is unmistakable: public procurement must not only buy infrastructure; it must build national capability.
For Bangladesh, this requires a policy shift. Public spending must be linked with technological development, industrial deepening and employment generation. Such a framework can be built around eight interconnected stages.
Public procurement: Government purchases should be judged not only by price and delivery, but also by their contribution to technological learning, domestic production and industrial development.
Local participation: Large projects must involve local engineers, universities, research institutions and domestic firms. Without them, procurement may create assets, but not capability.
Research and development: Major procurement programmes should include applied research, testing and innovation from the beginning, linking government, industry and academia.
Technology transfer: Technology transfer must go beyond operating imported systems. It should enable local engineers to understand, adapt, improve and eventually redesign technologies.
Reverse engineering: Studying imported technologies and adapting them locally is not imitation; it is learning that helps firms understand technologies and find opportunities for innovation.
Local manufacturing: Technological capability creates real value when production happens locally. Components, electronics, software, maintenance and supporting industries can generate jobs while strengthening supply chains.
Product development: Bangladesh should not remain a low-value assembler of products designed elsewhere. It must develop solutions for local needs in smart irrigation, agricultural technology, medical devices, smart meters, digital public services and industrial software.
Export capability: Export success is the reward for capability building. Firms that gain experience in production, quality control, innovation and product development are better positioned to compete internationally.
Bangladesh is not starting from zero. It has examples, experience and unrealised potential. What it lacks is strategic intent. The Saidpur Railway Workshop is an important example. Established during the British colonial period, it was more than a repair facility: it became a centre for engineering skills, technical learning and industrial capability, helping create skilled workers and support light engineering industries.
The question is why this foundation never became a railway industrial ecosystem. After decades of experience, why has Bangladesh not developed stronger capabilities in railway coaches, signalling systems and railway technologies? The same question applies to the country’s expanding smart meter programme.
If Bangladesh installs 40 million prepaid and smart electricity meters at an average cost of Tk10,000 per unit, the market would exceed Tk400 billion. This should not become another import-heavy procurement exercise; it should be designed as an industrial development opportunity.
A smart meter includes electronic components, communication systems, software, data platforms, security features, display units, power modules and mechanical structures. Many could be produced domestically. With the right approach, such a programme could support electronics manufacturing, embedded software, smart-grid technologies, circuit boards, plastics and data services. In other words, a smart meter programme should become an industrial development programme.
Bangladesh often speaks of creating millions of jobs. But jobs do not appear because targets are announced. Productive employment emerges when industries grow around technology, firms learn by doing, suppliers become more capable, and workers gain transferable skills.
This is why strong industrial ecosystems matter. A factory creates direct jobs, but an ecosystem creates layers of employment – in components, testing, design, maintenance, logistics, software, quality control, training and supplier firms. It also creates conditions for innovation as engineers, entrepreneurs, universities and manufacturers solve problems together.
Importing finished products may deliver projects quickly, but it rarely builds the firms, skills and institutions that generate sustained employment. Procurement that requires local participation, technology transfer, applied research and domestic production can create the ecosystems from which better jobs emerge. Employment creation, productivity growth and export diversification will not be achieved through infrastructure alone. They require technological capability, industrial upgrading and procurement designed to nurture domestic industrial ecosystems. The future of employment will depend less on the size of public spending than on the capability it creates. Every major purchase should ask: what technology will be learned, what ecosystem will be built and what jobs will be created?
The choice before Bangladesh is clear. It can keep spending billions on assets that leave limited local capability, or turn public procurement into an engine of technology, industry and jobs. To diversify exports, move beyond low-cost labour and avoid the middle-income trap, procurement must become a development strategy – not merely a purchasing function. Public spending should build not only infrastructure, but also the industries, skills and ecosystems that will define the country’s future.
The writer is a Columnist and Founder & Director, Right Turn. E-mail: [email protected]
