Bangladesh, a country known for the resilience of its people, has been showing remarkable growth over the years and looking forward to export diversification and sustainability. Despite facing massive challenges after emerging from an authoritative regime and the global economic shocks post-pandemic, the nation has shown remarkable resilience. This resilience, deeply embedded in the people, has been the driving force behind the country’s economic progress.

Today, Bangladesh stands at a pivotal moment in its economic journey, driven by an unparalleled demographic dividend. According to the World Bank's 2023 data, Bangladesh's age dependency ratio stands at 53. This means that for every 100 working-age individuals, there are only 53 dependents, underscoring the country's advantage of a youthful and economically active population.[1]

With over 60% of its population under the age of 35, the nation boasts one of the youngest and most dynamic workforces in the world.[2] This youthful energy, combined with a growing emphasis on skills development and technology adoption, positions Bangladesh as a resilient and adaptable hub for global buyers.

Beyond numbers, the workforce reflects a unique spirit of inclusivity. Women, who dominate industries such as Ready-Made Garments (RMG), the Leather Industry, and the informal sector, have redefined productivity while driving significant socioeconomic progress.

From competitive costs to a robust ecosystem of sustainable and ethical manufacturing practices, Bangladesh has cemented its reputation as a global leader. As buyers seek not just value but partnerships with forward-looking suppliers, Bangladesh emerges as the answer to the demands of an evolving marketplace.

Paving Growth Pathways through Digitalization

Figure 1 Digitalization, and Digital Commerce in Bangladesh

With the tech-savvy young workforce as its wheel of growth, Bangladesh has experienced accelerated growth in digital adoption with 76.51% of the population consuming the internet [3]. Over the past 10 years, Bangladesh has been actively investing in building and strengthening the digital infrastructure to facilitate citizens, businesses, and professionals to leverage its power to achieve economic empowerment. Such progressive efforts have led the country to secure a score of 64.2, in the Mobile Connectivity Index, for its mobile connectivity infrastructure; a score close to Vietnam's 65.3 and Cambodia's 62.5[4].

This digitalization drive has paved new opportunities for youth participation in the workforce by facilitating connection to the global economy. It has also created a fertile ground for global digital commerce platforms like Daraz, Uber and Foodpanda to enter and rapidly gain traction through onboarding numerous SMEs and engaging a huge workforce.

The ripple effect continued for local digital commerce platforms too, placing the local small businesses in a perfect setting to offer their unique and quality products and services to the global market. To further facilitate this movement of the digital economy, the Ministry of Commerce (MoC) has recently drafted the Cross-border Digital Commerce and the government has been actively pushing forward the agenda of simplifying the government services with over 1,500 online public services[5], earning Bangladesh a score of 6 out of 10 in the e-government service indicator of Global Digitalization Index[6].

This digital transformation of public services, especially with the recent significant improvements undertaken for the one stop service portal of Bangladesh Investment Development Authority (BIDA), offering transparent, simple and streamlined investment process[7], has brought efficiency and simplicity to the bureaucratic processes, making the economy a potent ground to accommodate the needs of its growing investor network of both foreign and local actors.

Riding the Automation Wave

Bangladesh has not only leveraged e-commerce platforms to facilitate seamless transactions for consumers and buyers but has also embraced the Fourth Industrial Revolution (4IR) advancements across industries to bolster its overall industrial competitiveness.

For instance, in the RMG sector, modern technologies like Artificial Intelligence (AI) integrated with Computer-Aided Design (CAD) software are used to generate digital garment patterns, significantly improving efficiency and precision. Similarly, automation has gained momentum in the service sector, particularly in banking, where Robotic Process Automation (RPA) is utilized for repetitive tasks such as data entry, reconciliation, and verification. This implementation has effectively minimized operational costs, reduced errors and risks, streamlined workflows, and elevated service quality.

Beyond operational efficiency, the integration of technology has facilitated the production of high-value-added goods, thereby strengthening Bangladesh's brand image in the global market.

Climbing up the Ladder to Produce High-Value Added Goods

The integration of automation has also enabled manufacturers to expand their production capabilities, focusing on high-value-added goods. Among the key contributors, the RMG sector, historically centered on basic garment production, is now shifting towards a high-value-added production basket, including blazers, suits, and leather jackets.

Simultaneously, while Bangladesh has become significantly dependent on its largest export sector, the RMG industry, the country has demonstrated its capability to transition from an economy predominantly reliant on agriculture to one diversified across sectors. These include leather and footwear, plastics, light engineering, agriculture and agri-businesses, electronics, IT, automobiles, and more.

Figure 2: Top Export Sectors According to BIDA and LightCastle Partners' FDI Heatmap

Investing in Powerhouse to Achieve Energy-Efficiency

Bangladesh is also investing in energy-efficient technologies to curb carbon emissions and minimize resource wastage. Examples include energy-saving fans, which reduce energy consumption by up to 30%, servo motors that use approximately 45% less energy compared to traditional clutch motors, and e-flow technology in the textile and leather and footwear industry, which replaces water with ‘smart foam’ among many others[8]. These investments have significantly contributed to the growth of the manufacturing sector while addressing the rising environmental challenges.

Diversifying the Export Basket

Expanding the export basket translates to diversifying growth opportunities, with one notable success story being the local electronics industry, exemplified by Walton. Walton has been heavily investing in research and innovation to position Bangladesh as a hub for high-tech consumer electronics manufacturing. As part of its expansion strategy, Walton has announced an investment of approximately USD 640 million to enhance production capabilities and broaden its product range.

This initiative aims to bolster local manufacturing and export activities.[9] Furthermore, Walton has established a strong presence in both traditional and non-traditional markets, exporting its products to over 14 European Countries.

Figure 3: Walton’s Export Reach to EU Market

Beyond electronics, Bangladesh has been producing premium-quality leather goods, including belts, bags, purses, luggage, and footwear, securing its position as the second-largest export sector after RMG. Similarly, in the agricultural sector, the adoption of agri-tech innovations such as the Internet of Things (IoT) and Artificial Intelligence (AI) in precision farming has enabled real-time monitoring and management of crops and livestock.

Startups such as iFarmer in Bangladesh depict this shift by integrating IoT sensors, remote sensing, and machine learning solutions to provide advisory services to farmers. This convergence of technology and agriculture enhances resource optimization, improves crop yields, and minimizes environmental impact; highlighting that automation has catalyzed growth not just in specific industries but across the broader manufacturing sector.

From Least Developed to Economic Powerhouse

By integrating automation, focusing on high-value production, diversifying exports, and advancing in electronic goods manufacturing, Bangladesh is not only boosting its economic growth but also preparing itself to graduate from the status of ‘Least Developed Country’ to ‘Developing Country’ within 2026. This anticipated graduation enhances the nation's global standing, instills greater confidence among international buyers, and paves the way for increased investment.

Recognizing the need to attract more investment, Bangladesh has been restructuring its trade policies to create a more investor-friendly environment. By reducing trade barriers, such as high tariffs and bureaucratic customs procedures, the country aims to create a more competitive and appealing environment for foreign investors. As a result, Bangladesh has been implementing several environment- and business-friendly policy reforms to streamline its trade infrastructure and foster sustainable development.

Table 1: Bangladesh’s Tax Holiday Sectors

In tandem with these initiatives, the country has also been working to strengthen its export sector by signing bilateral and multilateral agreements with various entities to secure trade benefits.

Table 2: Bangladesh’s Participation in Trade Agreements

Additionally, Bangladesh is providing advanced infrastructure to attract investors, facilitating development through improved ports, roads, sea, and air connectivity. These measures not only accelerate economic growth but also reinforce the development of private sector expansion within the economy.

Figure 3: Investment in Infrastructure Development

Meeting Consumer and Policy Standards Through Sustainability

Bangladesh’s unwavering commitment to sustainability has set it apart from other nations. Despite contributing only 0.4% to global greenhouse gas (GHG) emissions, the country is actively aligning with international sustainability standards.[14] Industries in Bangladesh are adapting to comply with stringent EU regulations, such as the European Green Deal and Corporate Sustainability Reporting Directive (CSRD). These policies emphasize reducing carbon footprints, ensuring supply chain transparency, and protecting workers' rights—areas where Bangladesh is making significant progress to remain globally competitive.

This dual focus on workforce development and sustainability positions Bangladesh as an ideal sourcing destination for global buyers. It offers more than cost efficiency, it embodies the core values of modern commerce: inclusivity, innovation, and sustainability. For businesses striving to meet the expectations of socially conscious consumers and comply with evolving regulatory frameworks, Bangladesh provides unparalleled opportunities.

Globally, sustainability is becoming a critical priority for businesses. A Deloitte survey reveals that nearly one-third of Gen Z consumers actively research a company's environmental policies before making a purchase. Many are even willing to pay a premium for products that align with their values.[15] As Gen Z emerges as a dominant consumer group, their demand for ethically produced, sustainable goods are reshaping global markets.

Recognizing this shift, Bangladesh has taken bold steps to adopt sustainable practices. The nation now boasts the highest number of LEED-certified green factories in the world, underscoring its leadership in environmentally responsible manufacturing. By aligning with consumer values and global sustainability goals, Bangladesh is paving the way for a more sustainable and inclusive future in global trade.

Invest in Bangladesh's Untapped Potential

The stage is set in Bangladesh with a developing infrastructure, as highlighted by the BIDA chief in the ‘White Paper Bangladesh Symposium, 2024’ that out of the 100 economic zone targets set by the previous regime, BIDA and BEZA will work on making 5 operational and fully functional to invite investors to these zones.

Additionally, the country is making substantial investments in cultivating a skilled and competitive workforce, demonstrating a strong commitment to sustainable digitalization and automation, and fostering a business-friendly regulatory and support ecosystem. With these foundational elements in place, Bangladesh is geared to make its mark in the global economy and actualize its true potential. With such an enabling environment in place, it is the right time for the country to mine its investment prospects.

References

• CEIC (2023). Age dependency ratio (% of working-age population) - Bangladesh. Link
• BTRC (2024). Internet Subscriber Statistics. Bangladesh Telecommunication Regulatory Commission. Link
• GSMA (2024). Mobile Connectivity Index 2024. GSMA. Link
• a2i (2022). Digital Services for All. Aspire to Innovate, ICT Division. Link
• Huawei (2024). Global Digitalization Index 2024 - Country Profile: Bangladesh. Link
• BIDA (2025). One Stop Service Portal. Bangladesh Investment Development Authority. Link
• The Daily Star (2024). Walton plans fresh $640m investment. Link
• The Business Standard (2024). Walton boosts TV exports to Denmark, Ireland. Link
• The Business Standard (2024). Bridges and Barriers to Foreign Investment. Economic Intelligence Bangladesh. Link
• KPMG (2024). Investment Guide Bangladesh. Link
• World Bank (2022). Urgent Climate Action Crucial for Bangladesh to Sustain Strong Growth. Link
• Deloitte (2024). 2024 Gen Z and Millennial Survey: Living and Working with Purpose in a Transforming World. Link

Author

This article was co-authored by Sadia Karim and Sakina Binte Belayet, Business Analysts, and Ainan Tajrian, Business Consultant at LightCastle Partners.