By M. Rokonuzzaman, Ph.D
The Ready-Made Garments (RMG) industry has become the main source of manufacturing employment in Bangladesh. Approximately 4.4 million jobs have been created, generating more than $28 billion in export revenue. The medium-term growth prospect of the nation hinges on the expansion of this vital sector. Although we are optimistic about the prospect of experiencing accelerated growth, primarily due to the growing labor cost of China, we should also take into consideration the effects of technological development on the as well. Like all other production processes, the RMG sector is also the target of technology infusion to produce better quality products at lower costs — which would ultimately reduce its reliance on labor.
Many production operations like shoe making, where manual works are still playing the major role in manufacturing, are poised to experience major transformations due to robotics. For example, to deal with the high labor cost in Germany, Adidas shifted manufacturing plants to China, in the 1980s. But to deal with growing labor cost in China, instead of relocating the plant from China to other lower labor cost country, the company rather figured out that relocating the plant back in Germany could be a cheaper option. By employing far fewer people and more robots, Adidas has built a plant in the Bavarian town of Ansbach. Adidas’ robotic shoe manufacturing plant in Germany is now up and running. The planned Atlanta factory is expected to produce 50,000 pairs of shoes in the second half of 2017 — almost entirely by robots. Although this number is insignificant to the sportswear company’s current outsourcing of 300 million pairs of shoes to China and other countries in Asia, where shoes are manufactured mostly by hand, but, it could be likely the beginning of a major transformation which could see human labor being replaced by robots in major manufacturing industries.
The RMG production goes through a long chain of production activities, known as the value chain. Every link of the value chain, starting from cotton harvesting to finishing of apparels, has been going through a constant technological transformation. Relentless efforts are in place to delegate roles from humans to machines to improve quality and reduce the costs. As a result, most of the steps of the garment production process are already automated, from picking cotton to spinning yarn to cutting clothes. Even button fixing jobs, which used to be done by hand, are being performed by machines. Technological progression is constantly taking place to reach to a state to piece together all the different materials to create an entire item of clothing, like a pair of jeans or a t-shirt.
Although we still need a significant amount of human labor to produce the finished product, this amount has been declining over the years. The basic economics of production has been driving these increasing role delegations from humans to machines. Such progression is not only demanding less labor, but it is also pushing the ceiling of labor wages down. Those days are not far away when it might be economically more attractive to produce finished products with robots, next to supermarkets selling those products in the USA, Germany or Japan. There may come a time when, like Adidas, buyers will likely find to it cheaper to source finished garments from onshore production facilities, employing mostly robots, than labor intensive suppliers from Bangladesh.
Recently, there has been reporting that a common hurdle to clothing automation—the challenge of working with weak, flexible fabrics— has been successfully overcome with an industrial robot to sew together a t-shirt. In the recent past, the Pentagon awarded a grant to Softwear Automation, a Georgia Tech spinoff, to create computer-controlled sewing machines. The Walmart Foundation and Walmart Stores are investing in academic R&D to figure out how to get robots to take over the sewing process. The new administration in Washington will likely accelerate the trend of technology progression to re-shore (as opposed to offshore) RMG production facilities. There is no doubt that such tech development efforts will have huge implications on millions of people in Asia and Southeast Asia, especially women. According to the International Labor Organization, almost 90% of garment and footwear workers in Cambodia and Vietnam are at risk of losing their jobs to automated assembly lines.
There is no denying the fact that technological progression has been supplementing labor in RMG factories, even in Bangladesh. Many of the garments factories in Bangladesh are using laser cutting or automated button-fixing machines as a substitute for human labor. The driving force is very plain and simple: the economics of production; produce better quality products at lower costs in less time is the survival strategy. Such progression does not appear to be too far from reaching the tipping point when onshore robotic-based apparel production becomes the cheaper option for major buyers. The obvious question is: What should Bangladesh be doing?
Bangladesh will likely see employment freezing leading to lay off in the RMG sector as technology will be taking over roles at a faster rate than the arrival of new work orders. Such trend will likely continue to cease the work orders flowing from buyers of western countries to offshore factories to produce RMG products to be sold in those countries. Such undesirable outcome will have serious negative implications on our economy.
Despite the growth of RMG industry over the last couple of decades, Bangladesh has not become successful in creating new manufacturing opportunities. Agriculture can no longer absorb additional labor. Rather technology integration in the Agriculture sector should be accelerated to increase productivity and reduce the cost of production to maintain the financial viability of the sector. Due to the likely change in globalization policies, it would be harder for Bangladesh to penetrate in new manufacturing sectors for export. Moreover, due to the growing debt payment obligation, it would be harder for the nation to offer conventional incentives like tax reduction and cash subsidies to counter the technology pressure to protect the labor-intensive jobs. Bangladesh should rather take smarter steps to leverage the progress already made in the RMG sector.
Instead of just applying conventional tools like tax and fiscal incentives to deal with the technological force, Bangladesh should rather figure out ways to take advantage of the technology itself. So far Bangladesh has taken the advantage of low-cost labor by participating in the global RMG trade. Technology is opening the opportunity for Bangladesh to engage a growing number of university graduates in the area of Engineering and Computer Science. It’s time for Bangladesh to support the growth of the local innovation capacity to innovate technology solutions to increase the competitiveness of the local RMG production. For example, although the RMG industry is facing significant competitive pressures, more than 10% of the single largest cost item, that is fabrics, is wasted. The urgency to find ways to lower such wastage to reduce the cost of production has been stressed to improve or sustain the competitiveness of the RMG sector, without facing the necessity of keeping wages low. Investigations find that current wastage rate could be significantly reduced, as low as 5% from current 10%, by improving the detection and classification accuracy to as high as above 95% (the remaining 5 percent will be taken care of by human inspector) by integrating machine vision solutions in the inspection process. Innovative solutions for lowering costs of RMG production without restricting wage growth will open the door for increasing salary of the low-income groups of people working in the sector, without losing the low-cost advantage.
Instead of ignoring the technological progression eroding the labor requirement in the RMG sector, the smarter response for Bangladesh should be to engage its Engineering and Computer Science graduates to innovate technological solutions to maintain and/or improve the competitiveness of the industry. It’s an opportunity for Bangladesh to deploy knowledgeable workers along with manual labor to reap multi-dimensional benefits from the RMG sector. Such policy options will also lead to greater innovation in the economy which is a must for Bangladesh if it wants to grow into a middle-income country in the future.
The writer is an academic, researcher and activist. He works as a Professor at the Department of Electrical and Computer Engineering at North South University and can be reached at zaman.rokon.bd@gmail.com.
