Unemployment Challenges Continue in Bangladesh Despite Tech Growth

In a recent workshop held in Dhaka, the persistent challenge of unemployment in Bangladesh was brought to light by Asif Mahmud Shojib Bhuyain, adviser to the Ministries of Youth and Sports and Local Government. The event, titled "Youth Entrepreneurship: Investment, Policy and Ecosystem," was jointly organized by the Bangladesh Investment Development Authority (Bida) and the United Nations Development Programme (UNDP) on July 17, 2025.

The Current State of Unemployment

At the event, Bhuyain emphasized that Bangladesh is still grappling with the same employment issues that led to unrest in the previous year. "We are trying, but we haven’t yet achieved the scale required to bring real change," he remarked. Despite the soaring number of tech-driven startups in the country, the startup ecosystem is still riddled with critical obstacles that hinder progress.

A Snapshot of Challenges

The workshop gathered over 100 participants, including youth entrepreneurs, investors, policymakers, and development partners, to explore structural bottlenecks within the startup landscape. Key challenges identified included:

• Limited Access to Funding: Entrepreneurs face a reluctance from banks and regulators to invest due to perceived risks. This hesitation creates a trust gap in financing processes.

• Regulatory Ambiguities: Many startups find the lack of clear regulatory frameworks a significant hurdle, particularly regarding taxation and operational norms that apply differently to small and medium enterprises (SMEs).

• Skill Shortages: The demand for skilled professionals is high, but the supply remains insufficient. Founders often handle multiple roles in the early stages but struggle to delegate as their startups grow.

• High Tax Burdens: Early-stage startups are often burdened with turnover taxes, which can cripple operations, especially if they are not yet profitable.

Conversations Around Solutions

During the workshop, participants shared their insights and outlined numerous recommendations aimed at fostering a healthier startup ecosystem. Among these recommendations were the establishment of a startup wing within Bida, the introduction of a regulatory sandbox to promote innovation, and the development of a secondary equity market.

Key Recommendations

The discussions generated 17 key recommendations categorized under three main pillars:

1. Facilitation Needs: Calls were made for a comprehensive national action plan that includes stakeholders from various government divisions to ensure the startup ecosystem receives continuous attention and resources.

2. Policy Incentives: Participants urged for clear definitional separation between startups and SMEs to enable tailored policies and tax breaks that would encourage investment.

3. Implementation Mechanisms: The suggestion to operationalize a Fund of Funds, which would facilitate easier access to capital through credit guarantees, was highlighted as essential for startup growth.

The Role of Institutions

Bida’s executive chairman, Ashiq Chowdhury, reiterated the need for a collaborative approach among public and private institutions. He proposed the formation of a National Action Plan Committee that would meet quarterly to evaluate progress and keep an ongoing dialogue with the startup community.

Forward-Looking Initiatives

Promising updates were also shared regarding initiatives designed to support aspiring entrepreneurs. Faiz Ahmad Taiyeb, special assistant to the chief adviser (ICT), mentioned efforts to raise $30 million in collaboration with the Japan International Cooperation Agency (Jica) for a startup fund, as well as a Tk100 crore allocation from Bangladesh Bank for startup financing. Furthermore, the Bangladesh Innovation Grant (BIG) program is set to resume once policy clarifications are put in place.

Conclusion

While the challenges facing Bangladesh’s startup ecosystem are substantial, the commitment from various stakeholders shows promise for improving conditions for youth entrepreneurs and ultimately addressing the unemployment crisis. The dialogue is now shifting towards actionable solutions that can create a more nurturing environment for innovation and growth in the coming years.