a year ago

Manufacturing sectors need to upscale skills

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The Bangladesh Institute of Development Studies (BIDS) recently released a survey-cum-study report that found the country's 10 major manufacturing sectors lacking in the required skills-to the extent of an average 30 per cent. Senior Research Fellow of BIDS Dr Kazi Iqbal disclosed the statistics while presenting the research findings on the 'Labour Market Studies for SEIP (Skills for Employment Investment Programme) on Skill Demand, Supply and Mismatch' at a dissemination seminar held in the capital the other day.  

The 10 sectors include agro-food processing, healthcare, hospitality and tourism, RMG and textile, constructions, leather, light engineering, shipbuilding, IT and electronics, while the five other potential sectors are furniture, jute, pharmaceutical, plastic and renewable energy.  

Regarding sectoral studies, a total of 1,138 enterprises and 7,018 workers were surveyed. As for the country's number one manufacturing sector and earner of the highest export revenue-- readymade garments, the picture is no less worrying. The study revealed that 53.74 per cent out of the 119 RMG enterprises surveyed under the study face skill gaps in general. The study covered 117 agro processing enterprises with 41,546 employees and found a total export-to-output ratio per enterprise around only 3.0 per cent. 

In the labour categories of the construction sector, other than the employees for senior management and support staff, the remaining workforce suffers from skill gap, according to the report. Evidence from the service sector like tourism and hotels suggested that soft skills can be taught; hence it should be a part of intensive training programme. The report said that alignment of education and skill development with industrial policy was important to lessen the skill gap.  

The rate of annual training in the surveyed sectors is lower-- only 1.35 per cent than the national average of 3.65 per cent. Training programmes have been suggested to gradually move towards technologically sophisticated industries as the skill gap was higher for the professionals and technical personnel. 

The level of skills now available in the manufacturing sector may be said to be moderate, at its best. In the past decades moderate skills somehow served the country, as low wage was considered an important factor for competitiveness. Low labour cost was believed to fetch competitiveness, especially in manufacturing not-so-upscale products for exports. However, these days, gone is the perception that low labour cost can guarantee competitiveness. For a country like Bangladesh which for the past decades has been thriving primarily on low wage, time is ripe to part with the low wage-driven approach and upscale skills in manufacturing to stay competitive in the days ahead. The draft of the country's Second Perspective Plan (2021-2041) prepared by the Planning Commission projects this impression in the strongest of words, "In the unfolding industrial universe of the future, Bangladesh firms will face stark reality that competitive advantage founded on low labour cost cannot be guaranteed for all time." The report also said local companies will have to focus on innovation to maintain a competitive edge instead of relying on traditional advantages that have paid off so far. "Without such efforts, entrepreneurs need to be warned that the current competitive advantage in labour-intensive garment exports could be lost in (the) future," the report warned. 

Developing skills is an open-ended issue. Although it's initially the job market at home and abroad that comes to mind, the idea of skill development is integral to the making of efficient human resource that besides taking care of itself can contribute to the economy in myriad forms and shapes. It is here that skill is essentially a matter of developing the population, preferably the youths, in various areas of activities. While higher skill is a matter related to the educated groups, less educated groups are the potential target for hands-on skill development. 

The key issue is about developing a national culture for nurturing and developing skills that can only turn humans into resources. This is because, as yet, there is no known or lately innovated shortcut to skill development. Being a continuous process, it calls for persistent and comprehensive planning. Stray efforts in the name of skill development do not pay in the long run. Examples are aplenty of development programmes and industrial productivity languishing in deficiencies mostly from a lack of sufficient skills on the part of the manpower engaged at various tiers. As a result, we are yet to see any noticeable improvement in meeting the prevailing skill-gaps in various spheres of productivity. There has not been any stocktaking of quantifiable achievements from various programmes undertaken by the public and private sector, so far.  

While deficiencies in skilled human resource at home is made up by large intake of foreigners in various productive sectors, export of unskilled workers abroad is destined to fetch very little in wages and salaries. In both cases, it is the lack of value addition that ultimately costs the country dearly. 

It has been found that the country's garment sector alone hires the services of thousands of foreign personnel to supervise the day-to-day running of the factories. Most of the jobs, as reports say, are not at all high-tech, but require thorough knowledge about machinery and equipment. According to reports the country spends around $5.0 billion a year on overseas employees. 

The BIDS survey report, though uncomforting, is not demoralising in that by pointing out the deficiencies in some precise details, it has brought to focus a picture that needed to be understood and looked into for improvement.  

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