Researchers from Denmark’s Aalborg University are now participants in a project to accelerate the internationalisation process, improve the occupational health and safety capability and ensure the sustainability of garment companies in Bangladesh. The programme has received 10 mn DKK from Danish International Development Agency (DANIDA). Garment is the lifeblood of the Bangladeshi economy earning 83 per cent of the country’s total export revenue.
Bangladesh faces intensive competition from countries like Cambodia, Vietnam, Myanmar and Ethiopia as global brands search for cheap labour, low-cost location and shorter geographical distance, says Bakhtiar Rana Mohammad, Associate Professor of International Business and Strategy, who is one of the AAU researchers involved in the project. While foreign retailers continue to offer low price for sourcing, cost of production in Bangladesh is rapidly increasing, which is not only limited to labour but also involved with occupational health and safety (OHS) arrangement and cost of doing business, he says. This condition poses a big challenge for the Bangladeshi garment industry where firms do not tend to focus on managerial capability development and innovation across the activities in value chain, he says.
Rana is currently working on three research projects. The first one deals with how and why local garment suppliers are locked-in the upgrading process and what role institutions and business system play in this regard. The second deals with why Bangladeshi suppliers internationalise to Ethiopia and how institutions, buyers’ business model and suppliers’ entrepreneurial capability influence the internationalisation process. The third is on how garment suppliers’ capability development is influenced by foreign buyers’ business model and governance in relational mechanism.
On March 7 Rana and his fellow researchers organised an international scientific conference on ‘sustaining garments’ in Dhaka in collaboration with the Ahsanullah University of Science and Technology, according to a report from the university. In Rana’s opinion Bangladeshi garment firms cannot sustain for long if they continue to rely on cheap labour only. They should instead opt for ensuring other competitive advantages in the supply chain, design and production, such as innovation in developing special type of fabric, using green technology in production and recycling and developing own brands for international markets, he adds.