Innovation for growth

Friday, 4 March 2011 02:44 - - {{hitsCtrl.values.hits}}

In an intensely competitive global market, apparel industry leaders have acknowledged that they need to focus on innovation to expand growth. To this end they are urging suppliers to not only infuse more funds into research and development, but also to implement easy payment schemes so that more factories can upgrade their technology by breaking up their investment.

As with other industries, apparel is concentrating on finding ways to multiply peace dividends with many companies considering new ways to increase efficiency. While technology is one way to improve output in a labour intensive industry, the other is to find cheap sources of labour. Already nine companies have applied to obtain land grants in the north and east, a move that is founded on the one hand with the intention of finding cheap labour and on the other benefiting from the Government’s tax concessions. It is interesting that tax incentives offered by the State are garnering interest to a large extent from the local private sector as well showing the potential for smaller home-grown projects as well.

Industries can flower only when given strong nurturing from a number of quarters. Businessmen are thinking of innovation and efficiency to piggyback on expanding markets that are veering away from the traditional US and EU outlet into emerging markets. The industry is lobbying for access into Japan, China, Brazil and even India to increase their imports and gain a toehold in these massive markets. Experts believe that the future lies in Asia and it is to neighbours that apparel has decided to turn to.

The Government has to facilitate this role by providing the right infrastructure for investments in the north and east as well as other areas. This is a short-term measure but of real importance when considering the need for investment in these once war-torn areas. Due to the restructuring of the Board of Investment (BOI), billions of rupees have been left to languish while businessmen wait impatiently for the go ahead. Some warn that the longer the waiting period, the more likelihood that these investments might find their way to overseas markets.

Large-scale industries such as apparel can be used for a multitude of good in the reconciliation and rehabilitation process. As local companies, they can be allowed to invest after special processing in a temporary branch set up under the BOI or a supporting institution. Bringing together people of different communities and smoothing over decades of mistrust and suffering to create a platform for understanding is a worthwhile goal indeed. Add to this the potency of building community relationships through CSR programmes and raising livelihood standards, it completes the case for investment in most parts of the country.

In the long term the Government has to look to finding ways to increase exports, whether through bilateral treaties or easing infrastructure constraints. Promoting research and development in apparel would spur other industries to follow and stitch a bright future for themselves. Sorely depending on an industry that is just beginning to taste growth to take care of itself is insufficient. The Government must follow up on its promises and make sure that the expansion is sustainable and Sri Lanka’s largest contributor of foreign exchange enjoys holistic growth.