A landlocked LDC’s approach to the global market: Bhutan’s IT service park

Business at Thimphu Tech Park has been blooming in the last couple of years. “We struggled to attract businesses for the first few years. There were only two people sitting in this four-story building for a while,” says Ms. Sonam Choden, the office manager. “Now, all spaces are rented out and we are now starting to construct a second building.”

The TechPark currently hosts two United States IT service companies, two Indian companies, a Swiss security company, a Bangladesh call center, and a data server center for the Bhutan Government. In the innovation and technology center, several start-up entrepreneurs from Bhutan, India and Chile are busy talking with clients over Skype. Seminars and workshops for entrepreneurs are under way in the conference room. The cafeteria on the 4th floor is becoming too small to serve the almost 2,000 employees (most of them women) in the building as of late 2017. By then, employment had more than doubled since early 2016, when it was 750.

Bhutan is well known as one of the world’s most remote countries, with difficulties in accessing the global market due to its isolation and landlocked status. Helped by the the availability of affordable energy and improved level of human assets, it has continued to overcome the structural handicaps and start to diversity into potential sectors such as IT services, as shown in the case of the TechPark. For Bhutan, graduation from LDC status is a concrete milestone in the nation’s 11th Five Year Plan (2013-2018), and the March 2018 triennial review of LDCs coincides with the transition to the 12th Five Year Plan.

At a recent workshop organized by the Government of Bhutan and UN ESCAP, the more enduring challenge for Bhutan was identified as the economic vulnerabilities emanating from a dependence on the still narrow range of economic sectors, low productivity, and exposure to climatic volatilities. Therefore, in addition to an assessment of the costs of graduation, identifying measures to overcome these challenges indispensable to the graduation process and success.

Ms. Choden said, “We did this without any help from outside – all companies came to us through personal networks. Imagine what can be done if the international community helps to promote business and investment to come to Bhutan.”