STED: Initial Findings on the Agro-Processing SectorTripartite Workshop on Skills for Trade and Economic Diversification in Bangladesh

Dhaka, September 8, 2011

Erik von Uexkull

ILO Trade and Employment Programme

Con Gregg

ILO Skills Department

Outline of presentation

• Why Agro-Processing Sector?

• Sector Characteristics

• The Global Market and Trade Challenges: • The Global Market and Trade Challenges: Three Scenarios� Business as Usual

� More of the Same

� Upgrade

• Implications for Capability Needs and Skill Demand

Why Agro-Processing Sector?

• Contribution to export diversification

• Strong potential for direct and indirect

employment creationemployment creation

• Importance of skills and training of workers

• Linkages with existing ILO technical assistance

�TVET project

�ETE project

Project Builds on 2010 TVET Study

• Focus on exporting agro processing sectors

• Covers all skill levels

• What comes next after initiatives following

TVET 2010 study are implemented?� Competence-based training for three priority occupations – Baker,

Food Technician, Packaging Technician

� Industry Skills Council

� Centre of Excellence

� Management development

� Operations efficiency / Kaizen

Sector CharacteristicsSector Characteristics

Note about Data

• Mostly quoting 2005/6 because that is date of

last Labour Force Survey

• 2010 Labour Force Survey under analysis by • 2010 Labour Force Survey under analysis by

statistics office

�Overall employment by sector

�Occupational composition of each sector

GDP Contribution...Total GDP:

4.5 trln. Taka

Data Source: Bangladesh Bureau of Statistics, 2005/6

... Employment ContributionTotal Employment:

47 mln.

Data Source: Bangladesh Bureau of Statistics, 2005/6

Firm level characteristics ...

400

500

600

Domestic

Exporter

0

100

200

300

400

# of companies in

sample

avg. Number of

permanent staff

avg. Sales (mln.

Taka)

avg. Wage ('000

Taka)

Data source: World Bank Enterprise Survey Bangladesh 2007

... Innovation ...

Data source: World Bank Enterprise Survey Bangladesh 2007

... and Skills Needs

Data source: World Bank Enterprise Survey Bangladesh 2007

Global Market and Export ChallengesGlobal Market and Export Challenges

Exports• Only small fraction of agro-processing products

destined for export (~3% of total output)

Data Source:

COMTRADE

Total Agro-

Processing

Exports:

38 bln. Taka

Competitive Position in Export Markets

• Price

• Market positioning � Premium / mid-market / low end

� Low value added / high value added

• Product differentiation

• Regulatory approvals – standards and compliance

• Quality perceptions – safety etc.

• Trade rules – market access

• Access to sales and distribution channels

• Branding

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