FARUQUE HASSAN: Bangladesh has drawn the global attention as a “development surprise” thanks to her impressive performance in terms of more than 7 percent annual average GDP growth for the last two years and improvements in the socio-economic parameters. It has already attained the status of lower middle-income country and made tangible progress in the field of industrialization, education, health, trade, infrastructure, energy and power, ICT and other service sectors. According to PWC’s predictions, Bangladesh will be the 28th largest economy by 2030.
Industrial development has a major role to play in realizing this potential as it will be a key driver of our economic growth. The ready-made garment (RMG) industry of Bangladesh has considerable strengths and immense potentials to complement this growth. Till date the RMG sector is the flagship manufacturing industry of Bangladesh accounting for more than 81 percent of country’s total exports. The industry has a significant contribution to socio-economic development in terms of employment generation, poverty alleviation, women empowerment, girls’ education, reducing child marriage rate and many more.
The global apparel market is expected to grow in coming years though there was some decline in global apparel trade in recent years. Apparel buyers are looking for alternatives sources for faster, more sustainable and technologically compatible manufacturing sources.The world is rapidly moving toward the fourth generation industry where smart technologies will redefine the entire gamut of fashion industry. Today technology does not mean only machinesto improve productivity, energy and resource efficiency, but also in the area of managing supply chain, retailing online and smart clothing.
When we look at our industry on a perspective of global advancement, we find ourselves significantly lagging behind though, quite encouragingly, our factories have started moving from semi-automatic to more automatic set-up. Low liquor dyeing machine, Ozone washing machines, SAP, ERP like technologies have already become popular.Moreover our progress in eco-friendly industrialization has gained significant momentum in recent years. We have now 67 green factories certified by the United States Green Building Council, of which 13 are platinum. Moreover, 280 more factories are in the pipeline for getting USGBC certification and many more are preparing for it. Now it is essential to make use of new pattern and fourth generation technologies including the advanced applications of information technologies in our supply chain management, i.e IOT (internet of things). At the same time, we have to enhance our productivity and efficiency, which requires technology up-gradation and modernization of factories. Speed and optimum use of resources will be the key to future business and sustainability. Looking further forward, 3-D printing technologies is anticipated to bring major disruption in the fashion manufacturing and retailing.
Important to note that we are often complacent by the fact that China will gradually shift from basic to mid-range apparel segment because of their growing production cost. While this may be an opportunity for us, we should also closely observe how China is re-structuring their industry through the use of technologies, automation and advanced robotics to remain competitive and offer innovative products at cheaper price.
Diversification of fashion items and innovation is another critical area for our long-term growth sustainability. It’s a good sign that Bangladesh is gearing up to cater to the need of high-end and branded fashion segments. In recent years our exports are being expanded to items like – suits/blazers, lingerie, active-wear and outerwear, and non-cotton items. We have to reduce our dependence on these basic products and capacitate ourselves to meet the demand of high-end and branded fashion segments in order to accelerate the industry’s growth.
Considering the importance of technological upgradation for the development of apparel industry, our competing countries have introduced special policy support like Technology Upgradation Fund Scheme (TUFS) for their garment and textile industry. Bangladesh has made tremendous progress in the digital transformation in last decade under the Digital Bangladesh vision of the government; we have to now reap the benefit of digitalization by embedding it in our industry for which the industry needs policy supports to upgrade themselves. This will ultimately result in more export earnings for the country. Besides, our entrepreneurs need to be up-to-date about the latest technological advances in the industry and proactive in embracing them.
Bangladesh is now passing through a golden age in term of its population dividend. About 70% of our population is within 40 years of age group. While there is a concern of technologies killing jobs, we should rather be more concerned about why significant part of our talented youths are unemployed whereas a good number of foreign experts are working in Bangladesh at high paid managerial positions.The gap between our education system and the industry needs to close. We need to identify the gap between demand and supply for skills, especially for taking the challenge of future industry. We need a stronger collaboration between manufacturers, buyers and experts to identify present and future skills need. We need a policy, institutional framework and resources to produce market driven skills.
Needless to mention that Bangladesh has successfully faced a number of challenges in the 35 years’ journey of apparel manufacturing including the elimination of Child Labor in 1994 and made progress in the areas of social compliance. Currently, we are working on workplace safety and environmental sustainability issues. We are working with the Government, ILO, brands & retailers, donors, international agencies and foreign governments to ensure workplace safety factory by factory. Today we are proud to say that Bangladesh is in a new era of industrialization having probably the safest apparel industry.
While we are taking all these positive steps and our factories are increasingly investing money for safety and sustainability, we are still living in the age of price cuts! In the free market economy price cannot be dictated, but respect has to be given to fair pricing as nobody can justify lower price to produce socially fair goods. Since technological advancement would be a new horizon of opportunities for all the partners in the global fashion supply chain, there needs to be a collaborative approach between buyers and suppliers supported by the Government and development partners so that it creates a win-to-all situation. The opportunities in global sourcing can only be tapped when there will be collective and collaborative actions of all stakeholders across the global value chain.
Managing Director of Shafi Processing Industries Limited,
President, Dutch-Bangla Chamber of Commerce & Industry(DBCCI)
Senior Vice President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA)