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[URL unfurl="true"]https://businesspostbd.com/editorial/ensuring-growth-of-small-and-cottage-industries-2023-05-28[/URL]Ensuring growth of small and cottage industries28 May 2023 00:00:00 | Update: 27 May 2023 23:44:09According to pertinent observers when the economy of a country is in shackles, it is the large industries that face most of the problems while small and cottage industries can develop in the face of adversity. It is labour-intensive, employing about 87 per cent of the total labour force.These enterprises are significant contributors to employment generation, poverty reduction, and economic growth.The sector contributes immensely to the economic growth of Bangladesh. They have a multiplier effect on the economy, as they create jobs, generate income, and contribute to tax revenue. According to the World Bank, the sector contributes around 25 percent of Bangladesh’s GDP. These industries are also significant contributors to Bangladesh’s export earnings.As indicated earlier the sector provides employment opportunities to a significant portion of the population in Bangladesh. According to the Bangladesh Bureau of Statistics, CMSMEs employ around 87 per cent of the industrial workforce and 48 per cent of the total labour force in the country. The majority of these enterprises are located in rural areas, where they create employment opportunities for women and youth. As per the statistics of the SME Foundation, there are more than 7.8 million CMSMEs in Bangladesh where 7.3 million people are engaged.And it is a misconception that small or cottage industries remain small but there are many success stories where they have ended up as macro-enterprises.However for small or cottage industries to flourish along expected lines they need adequate support from the government.There is a need for state initiatives to build a strong entrepreneur network to make the country’s small and cottage industry sectors in facing the ongoing challenges of the free-market economy. Increased competition, poor quality of product, unskilled manpower, lack of management commitment to quality, unawareness about quality through organization and lack of knowledge about quality control are the main hindrances towards making small and cottage industries profitable.Such a view was reflected in a recent interview, published in TBP, with the President of the National Association of Small and Cottage Industries of Bangladesh (NASCIB) Mirza Nurul Ghani Sovon. Shovon stated that his organisation wants the government to focus on policies and allocation aiming to help promote the growth of the sector.Relevant data shows that finance for these industries comes through the owner’s private savings and credit by financial institutions is far from enough. We believe that there is a lot of potential in Bangladesh for the progress of this industry and the country can improve its economy further through it.Improvements can be made through the easier availability of loans on soft terms. Marketing facilities should also be improved. Small-scale and cottage industries should be encouraged as opposed to establishing new large-scale industries in urban centres, where the infrastructure is already strained.It is imperative to develop the cottage industry on modern lines as it is intertwined with our cultural heritage and improvement in the economy along with the increase in foreign exchange. The government should offer incentives to the workers in the sector and establish proper institutions for training so that they give their best.For increasing investment in the country, an efficient and strong SME can certainly play its due role; but that is not enough. For increasing investment, it is also necessary to adopt policies that can induce an atmosphere of investment in the country.
[URL unfurl="true"]https://businesspostbd.com/editorial/ensuring-growth-of-small-and-cottage-industries-2023-05-28[/URL]
28 May 2023 00:00:00 | Update: 27 May 2023 23:44:09
According to pertinent observers when the economy of a country is in shackles, it is the large industries that face most of the problems while small and cottage industries can develop in the face of adversity. It is labour-intensive, employing about 87 per cent of the total labour force.
These enterprises are significant contributors to employment generation, poverty reduction, and economic growth.
The sector contributes immensely to the economic growth of Bangladesh. They have a multiplier effect on the economy, as they create jobs, generate income, and contribute to tax revenue. According to the World Bank, the sector contributes around 25 percent of Bangladesh’s GDP. These industries are also significant contributors to Bangladesh’s export earnings.
As indicated earlier the sector provides employment opportunities to a significant portion of the population in Bangladesh. According to the Bangladesh Bureau of Statistics, CMSMEs employ around 87 per cent of the industrial workforce and 48 per cent of the total labour force in the country. The majority of these enterprises are located in rural areas, where they create employment opportunities for women and youth. As per the statistics of the SME Foundation, there are more than 7.8 million CMSMEs in Bangladesh where 7.3 million people are engaged.
And it is a misconception that small or cottage industries remain small but there are many success stories where they have ended up as macro-enterprises.
However for small or cottage industries to flourish along expected lines they need adequate support from the government.
There is a need for state initiatives to build a strong entrepreneur network to make the country’s small and cottage industry sectors in facing the ongoing challenges of the free-market economy. Increased competition, poor quality of product, unskilled manpower, lack of management commitment to quality, unawareness about quality through organization and lack of knowledge about quality control are the main hindrances towards making small and cottage industries profitable.
Such a view was reflected in a recent interview, published in TBP, with the President of the National Association of Small and Cottage Industries of Bangladesh (NASCIB) Mirza Nurul Ghani Sovon. Shovon stated that his organisation wants the government to focus on policies and allocation aiming to help promote the growth of the sector.
Relevant data shows that finance for these industries comes through the owner’s private savings and credit by financial institutions is far from enough. We believe that there is a lot of potential in Bangladesh for the progress of this industry and the country can improve its economy further through it.
Improvements can be made through the easier availability of loans on soft terms. Marketing facilities should also be improved. Small-scale and cottage industries should be encouraged as opposed to establishing new large-scale industries in urban centres, where the infrastructure is already strained.
It is imperative to develop the cottage industry on modern lines as it is intertwined with our cultural heritage and improvement in the economy along with the increase in foreign exchange. The government should offer incentives to the workers in the sector and establish proper institutions for training so that they give their best.
For increasing investment in the country, an efficient and strong SME can certainly play its due role; but that is not enough. For increasing investment, it is also necessary to adopt policies that can induce an atmosphere of investment in the country.
