Industrialists’ low spending on workers R & D alarming

MOST industries in Bangladesh spend less than Tk 500 per year on research and development (R&D) per worker, a scenario that may hold back a country aiming to become a manufacturing hub and a developed nation in less than two decades.

Raising competitiveness and productivity through R&D and innovation are deemed as vital for nations that want to ensure sustainable wage growth, create jobs and stay ahead of competition in export markets.

A higher R&D spending also leads to higher innovation, which contributes to higher per capita income.

But in Bangladesh, the overall R&D investments stood at 0.03 per cent of gross domestic product (GDP) in 2022-23, according to data from the planning commission.

It was 0.54 per cent in Vietnam, 0.70 per cent in India, and 2.55 per cent in China, World Bank data showed.

In Bangladesh, the low spending on R&D is alarming.

However, the country’s pharmaceuticals and allied industry spends the most among all industries, with per worker expenditure standing at Tk 23,735.

Some sectors such as recycling, beverage, wood, wood-based products, motor vehicles, trailers and semi-trailers, repair and installation of machinery and equipment don’t spend any penny.

The share of firms’ spending on R&D in each sector remains alarmingly low.

The ratio is even lower for the garments industry as factories channel only 2 per cent of their expenditures to R&D.

The manufacturing sector largely focuses on low-tech products and it continues to be a significant contributor to the GDP growth.

The lion’s share of industry involves export, including that of readymade garments, says a Centre for Policy Dialogue (CPD).

Productivity per worker in Bangladesh is less than that of our competitors. The need for a skilled workforce will be crucial for the country after the graduation from the group of the least-developed countries in 2026.

However, the agriculture sector is credited for higher R&D, which has made the country almost self-sufficient in food production.

Experts believe that the government should think of an alternative plan if existing workers become jobless because of the adoption of advanced technologies in the manufacturing sector.

And align all universities and old colleges with the industries for R&D effectively.