So, how do we break this LOOP OF FRUSTRATION?
One of the most difficult questions to be answered. And, probably my answer will not be a complete one; but I am convinced, it will not be far from the one needed in field for our promising sector today. By the way,
‘It’s Easier to do diagnosis than prescribing medicine.’
Before we start the solution process, it will be wise to do a SWOT of ‘Bangladesh footwear industry’ before looking for solutions to weakness and threats; before taking action to transform opportunity into strength. By the way, is there a SWOT ever done on ‘Bangladesh footwear industry’ keeping sports footwear into consideration? I have never heard of any.
‘This is the harsh reality of our sports footwear industry, a simple SWOT has never been written, let alone an action plan!’
(do not hesitate to let me know if there is one existing already, would love to enrich my knowledge)
Here are my (humble) recommendations:
1. INVITE FDI: Equivalent investment from Local and global
FDI is equally important as local investment for an industry to grow inside a country; inequivalent investment can not help the balanced upbringing of an industry.
FDI brings technical resources, technology and buyers; and local investors provide infrastructure and workers (human) resources; together the conditions of growth is written. Today, how many FDI (foreign direct investment) we have in sports footwear industry? 1! The FDI comes with ready buyers; this is a common means to bring buyers into the playing field (used by RMG in many cases).
‘In ideal scenario it should be at least be 7:3, in our case it’s almost 10:0.’
The FDI comes with ready buyers; this is a common means to bring buyers into the playing field (used by RMG in many cases).
One of the top footwear group (the biggest!) from Vietnam signed MOU with a ‘footwear body (!) from Bangladesh’ in 2018 and could not yet finish their primary feasibility study to set up factory as they did not get necessary information-cooperation yet! Any country with similar opportunity would have facilitated it with all means.
2. INCENTIVE: Invest to create long term benefits
Incentive declared for sports footwear exporters on the export value is a great initiative by government to ensure long term development of industry; and the investors need to make sure, these incentives are being used for right reason – to create long term competitiveness as manufacturer.
‘Incentive won’t be give forever.’
Example: If a factory is having a minute cost of $0.03 and producing at 45% of efficiency; amount of incentive can be invested in resources to improve the efficiency from 45% to 75% (over few years) to create long term competitiveness. Incentive is not offered to give discount to buyers to attract them in short term; we must remember,
3. DEPENDENCY: Create self dependency soon
a. Build component Network (Lower dependency on China): COVID19 was a good lesson to understand how dependency can be killer. And, it’s a killer in long term also. Create self dependency.
One of the means to reach it, a Consolidation of needs of total component, semi finished (sole..) and tools for footwear Bangladesh must be done; and do ‘target’ purchase to allow factories to invest and plan for investment matching expected ROI. A mutual initiative by private and govt can make it happen only.
b. Initiative to build common development center (an wild idea):
Building individual PDC (Product development center) can be too expensive for medium and small factories. A common development center can be established by market leaders @ the service of the industrial growth. The center can sell service to all,
‘Development package @right price.’
I came to know and initiative of govt about product development center in 2018; then, did not find any update in last 2 years. Is it in progress? Anyone can share an update? Why don’t we communicate enough?
4. DEVELOPMENT PLAN: Prepare long term plan
|a. Vision (10/20 years)
|: Our dream for tomorrow (2041)
|b. Investment (why, what, when, how)
|: Our plan for 5 years (2027)
|c. Each of investment (Solution)
|: One stop solution to facilitate FDI & Local investment.
|d. Human resource (Skill up)
|: Train and improve management resource
|e. Create network (and recognition)
|: Uplift individual and sectoral recognition.
‘How many if us have represented Bangladesh Sports footwear in a global forum? Are we ready to represent? Are we invited even? How many?’
f. Footwear newsletter (Age of communication): Why don’t we have a magazine or newsletter to share what is going on in the market? What is coming in next 6 month and what is our goal in 10 years? Is there an website even to share information about the sector?
g. Develop green (Green is future) : We must prepare to produce green product with green resources (energy and infrastructure). Green requirements has arrived and it’s going to stay forever; let’s prepare it better.
5. ASSOCIATION: A body can represent sport footwear in real sense
Have we represented enough for sports shoe? An independent association did not exist for the first 20 years of the industry (1997-2017). Well, we can’t change the past.
‘I am not worried about the non-achievement in past; Worried that we don’t have a plan for future.’
Can we do better in next 10 years? The biggest challenge is to create an environment of collaboration and cooperation to focus on long term strategy in favor of the industry (forgetting individual short term benefits).
Like any other ecosystem, a behavioral excellence in certain topic will be equally important,
|- BALANCE TO CREATE between>
|Govt and Private collaboration
|FDI and Local Investment
|Loan act Vs Collective action
|Personal benefit Vs Collective gain
|Short Term goals Vs Long term Strategy
Again, as many answers, this answer is not complete. I don’t think, i can give a complete diagnosis sitting outsite the circle of activity. But I can share what it looks like, I can always share my thought on the problem and propose solution.
The writing does not have an objective to ‘educate’ anyone on the problem or even on the solution. Rahter, if it helps some of us to look at us in a new light from a new perspective, perfect. That’s what we need to do now.
We must realise if the industry grows, our personal growth and benefit will be a consequence only; we will grow with the industry equally and rationally. Can we be as big as our dreams? Or a little bigger?
(This article is the part of Author’s upcoming e-book ‘Defining competitive advantage of Bangladesh for Footwear’)Author
Hossain Tawhid Imam
A manufacturing industry passionate working as STRATEGIC INDUSTRIAL BUYER with the responsibility to build and deploy worldwide mid and long-term purchasing strategy for Footwear Industrial Division of DECATHLON.