Toward a framework for a national system of innovation (NSI) for the readymade garments sector of Bangladesh

Bangladesh is the second largest exporter of the readymade garments (RMG) in the world. The growth of the industry was stimulated by quota free exports to developed countries including the USA and the EU and under a protective regime. The competitiveness of the industry largely hinges on cheap labour and most firms produce low value apparels using imported raw materials. As there was limited incentive for most RMG firms to pursue innovation, hitherto, the sector has remained a low-technology-intensive industry. In recent years the competitiveness of the Bangladeshi RMG sector has been impacted by a number of factors including the abolition of quota free export facilities and the rapid transformation of the global clothing industry from a labour-intensive and low-technology-sector to a capital-intensive and high-technology sector. The aim of this study is to assess the potential impact of these challenges on the sector and propose a national system of innovation (NSI) for the RMG sector to promote firm- and institutional-level collaborative R&D and innovation activities, enhance the flow of international technology transfer and thereby improve international competitiveness.