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Demographic dividend: Let’s seize the opportunity

The readymade garment (RMG industry is a unique industry in Bangladesh to play a pivotal role in utilizing the dividend for the greater benefit and prosperity of our nation and economy it is considered and managed – as a burden or a resource. This aptly applies to Bangladesh as the country is passing through a golden era in terms of demographic dividend. In this year 2021, we have celebrated 50 years of independence which is a matter of great pride for us.

Demographic-dividend-Bangladesh-RMG
Figure: The dividend in the textile and RMG industry is immense. 

As a young nation, we have a number of achievements that make us proud, and our economic progress in the last 10 years has made Bangladesh a development surprise to the world. We have been able to consistently maintain a GDP growth of over 8 percent in the last few years before Covid-19 hit the whole world. Alike the previous years, it can be projected that manufacturing-based industries will lead the growth momentum in the upcoming years as well.

Population and demography are critical for the sustenance of labor-intensive industries like the RMG. Among all other resources like infrastructure, water and energy, human resource is the most critical resource based on which Bangladesh’s economy has flourished so far. The foundation of the export-oriented, manufacturing industries is human resources, and it will remain our main strength to gear up the economic development in the coming years.

We are living in the era of demographic dividend. Out of 163 million people, around 63.2 million are in our labor force. In addition, every year around 2 million people are joining this labor force. This portrays the picture of a young and energetic nation, which is essentially a key comparative edge and strength for future of the manufacturing-led industrialization.

This is particularly so for the RMG industry which directly employs 4.4 million workers and indirectly around 10 million workers, who contribute to earning $ 34 billion through export.

Based on the current industrial portfolio and given the scope of sector diversification, the vision for higher growth would require more people in this sector, and most importantly, would require efficient, multi-skilled and technology adaptation.

Now given the fact that we are living in an era of demographic dividend, this will not last forever. As per the United Nations, the demographic dividend era has started in Bangladesh in 1978 and will start decelerating in 2033, so we have already passed 78 percent of our demographic window of opportunity. That means the availability of the younger population will start to decline from 2033, so we have 12 years to utilize this window of opportunity before our population starts aging.

Let me add here that as per a recent survey report by the Asian Centre for Development (ACD), the average age of garment workers is 25.9 years, so a shift in workers’ age profile will be inevitable in the next 15 years.

Since we are planning our investments, the government along with the private sector needs to set the priorities within the skills development agenda ahead and strategize the capacity-building initiatives.

A general assessment is that so far we could not make adequate use of our demography. 29.8 percent of our youth are not in education, employment, or training (NEET). On top of it, Covid-19 has brought an unprecedented challenge to our economy. Over the past one and half years, there has been almost no new investment and employment in the industry.

However, as we are trying to cope up and turn around from the damage caused by the pandemic, we have to address the root cause for not being able to properly utilize the demographic dividend, and how best we can take the advantage of the remaining time. To my observation, few gaps need to be addressed in the first place.

These include: (i) lack of market-driven skills training, (ii) the competency levels of skills produced by different initiatives do not largely match with the industry requirements, (iii) technical and vocational education could not be popularized so far, (iv) lack of enterprise-based training, and (v) lack of academia-industrial linkage.

We need to consider these macro issues while endowing future investment in manufacturing. Moreover, we need governments’ fiscal and non-fiscal interventions to encourage enterprise-based training. Furthermore, we have to focus on the fourth industrial revolution, technological up-gradation and building future skills that will add more value and efficiency to the industry.

To attain this, we need a skilled and efficient workforce in the manufacturing sectors. To train our human resources, along with the government, we all need to work within our capacity and take outbound initiatives to train people on different skill categories.

In that case, we can follow the model from countries like China, Vietnam, South Korea and Thailand, who have taken their growth and standard of living to a new height by effective use of demographic dividend.

Not only workers but also we have a shortage of proper professional skills in mid-level management. Every year our educational institutions produce a good number of graduates, but they lack certain professionalism and skills.

In addition to grooming up the professionals, we also believe that sensitizing and raising awareness of the entrepreneurs and top management will also be helpful to sync with contemporary management philosophy and global developments.

BGMEA established the Innovation Centre where management training will be provided to mid-level professionals and there will be occasional sessions for top management.

Faruque-Hassan-BGMEA-Bangladesh-apparel-technological-innovations
Author: Faruque Hassan is the running President of BGMEA and MD of Giant Group.

The refresher programs would include business, finance, market development, management process and marketing to inspire the top management, while the technical people will be trained in different categories like innovation, efficiency enhancement, virtual pattern making, 3D designed, environmental sustainability, worker management relationship, grievance handling, workers wellbeing, occupational safety and health, and leadership development.

The readymade garment industry is unique in Bangladesh to play a pivotal role in utilizing the dividend for the greater benefit and prosperity of our nation and economy. Because we still hold, only a 6.8 percent share of the world apparel market and we have immense potential to grow further.

We have do have the people, but not the right skills and efficiency. Proper utilization of the demography through upgrading skills could only accelerate our journey to economic development.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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