Tech and ICT as the future of job creation in Bhutan

Ministry of Labor and Human Resources (MoLHR) in collaboration with UNDP launched a ‘Digital Jobs in Bhutan: Demand creation and future skilling to shape Bhutan’s digital economy and future of work’ report. The initiative was funded by Government of Japan.

The report states that, as a resource-rich country, Bhutan struggles to translate its capital-intensive resource wealth into the creation of a sufficient number of jobs and due to its small size and remote, landlocked location, the diversification of the economy and the export base are more difficult to achieve in Bhutan than in some other countries.

“The small size of the population and market also means Bhutan is unable to benefit from economies of scale. The report focuses on demand creation and future skilling,” the report adds.

Future skilling brings attention to the rising foundational skills of the digital economy as well as the future skilling challenges that are specific to Bhutan. It then explores a variety of different approaches that can match demand-to-supply and advance improvements in future skilling across the various systems, stakeholders, and providers that are already in place.

Since current employment in Bhutan is limited for those not within the Business Process Outsourcing category, the report states, “We are first zooming in on ICT-dependent and ICT-intensive jobs connected to global and regional external demand beyond Bhutan through outsourcing. We examined the outsourcing trends that are driving the digital economy of the future.”

Outsourcing may be grouped into 2 main categories, Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO). BPO commonly includes customer service, accounting, payroll, human resource management, and other business functions while ITO mainly encompasses services related to IT.

Thimphu Tech Park after its inception has become a success story in its own right – contributing Nu 180 mn to the economy annually with 19 current FDI and local tenants that have consistently provided direct employment to over 800 youth.

Through recruiting and retaining Bhutan-aligned investors, small- and medium-sized global BPO/ITO companies at the TechPark, Bhutan has begun to validate what works to grow its nascent tech industry from the ground up. Given the key insights the report recommends prioritizing tech-specific job creation in many ways. The first priority is recruiting more FDI small- and medium-sized BTO/ITO companies, which will generate both immediate employment and sustainable long-term quality job pathways for more young people entering the tech industry.

The second priority which is good on long-term fit and potential for demand creation, but which Bhutan perhaps does not yet have the full capacity for, is expanding the home-grown Bhutanese software development and tech industry. The third priority is remote work with low-mobility, low-skill BPO opportunities (call centers).

Beyond direct employment in the ICT sector, they also see several domestic demand creation possibilities intersecting with the future of work in high-potential adjacent Bhutanese industries such as production, e-commerce, wellness, ESL, and more.

The report further states that according to the World Bank’s Solutions for Youth Employment initiative, almost two-thirds of youth employment programs fail due to the lack of demand-side integration with companies.  

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