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Productivity Enhancement Program
It has revealed there are two sets of constraints related to productivity improvements in the targeted sectors by the EC4J Project in Bangladesh: (i) a shortage of relevant skills; and (ii) the use of inferior technology by firms, which both impede product quality and innovation. Bangladesh has some of the world’s lowest unit labor costs in the manufacturing sector. Raising labor productivity through improvements in skills formation and training is essential to strengthening export competitiveness, and by extension raising labor income. WBG enterprise survey data highlight that Bangladesh greatly lags behind countries like India, Pakistan, China, and Vietnam on the average value added per worker in sectors such as textiles, apparel, food and beverages, and ‘other manufacturing’. But there is scope to reduce the gap to the technology frontier by increasing investment in modern machinery and strengthening management at the firm level. Bangladesh’s most productive RMG factories have shown the way but the leather, footwear, light engineering, and plastics sectors have some way to go to catch up both upstream and downstream in existing value chains. Roundtable discussions organized in 2016 with industry associations and their member's highlight: (i) skills formation and training; and (ii) technology adoption and diffusion as crucial areas to raise productivity.
Four world-class technology Centers(TCs) are going to be constructed with the proximity to targeted industry clusters of the country throughout as Greater technology adoption and diffusion is essential to raise productivity in Bangladesh’s emerging export industries. Access to shared production technology and shared services will allow firms to buy vital production technology (tools, dyes, etc.) and obtain testing on material inputs and finished products –none of which are currently available locally. It will also allow firms to utilize common machinery for designs and prototyping where it is not economical for them to purchase this equipment themselves. It will also allow firms to obtain training for both management and staff, and receive onsite business advisory services to ensure they maximize the absorption of the new technologies and training. Therefore three General Engineering Technology Centre (GETCs) and a Design And Technology (DTC) are being established under the EC4J Project to reduce the lead time for the export-oriented industries of the targeted sectors and beyond by dissemination of upgraded technology, support R&D and providing demand-led capacity building of the industries.
Two Suitable sites have already been chosen considering the clusters proximity and stakeholders recommendations where one of them is at the Bangabandhu High Tech Park, Gazipur to address the footwear and electronics clusters need; and the second one is at the Mirsarai Economic Zone, with giving priority to General Engineering Industries like Automobiles, Battery and Accumulators and Dye and Moulds of the other light engineering industries. Before the Technology Centers are operational, skills need to be enhanced in specific areas for the effective delivery of interventions. Since the Technology Centers are expected to take up to four years to complete, this component will engage existing training institutions to provide services based on a need assessment of specific areas of skill requirements. The component will finance the provision of such training activities related to skills enhancement through the development of course modules, training-of-trainers, and the like. Some of these technical colleges could eventually become close partners of the Technology Centers. Training activities will also support gender sensitization and awareness-raising at factories and training institutes with specific training modules developed not only for female workers but also for the development of female managers, where applicable.
Productivity Enhancement Program