Improving product development amongst small businesseses in Bangladesh

The craft sector employs more than 1 million people in Bangladesh, and is largely made up of small producers. Over 80% of the workers in the handicrafts sector are women, many of whom live in poor, rural areas. Employment opportunities for these women are extremely limited, and craft-making offers them a chance to earn a small income.

Bangladeshi craft producers have a wealth of indigenous skills, techniques and raw materials. However the craft sector has not experienced the growth seen in other sectors in recent years. This was a worrying trend. The export market (especially Europe) is a key market for handicraft producers in Bangladesh and accounts for 80% of total sales. In order to retain and increase export market share small businesses need to understand the importance of product development and market trends.

Research with European buyers showed that small businesses in Bangladesh were struggling to meet their product development needs in the following key areas:

• Understanding international market requirements
• Offering products that meet the tastes of international customers
• Ensuring consistency in terms of quality, price and lead items

The project enable handicraft producers in Bangladesh to become more competitive. Specifically, the project focused on enabling handicraft-producing enterprises to:

• Understand the importance of product development to their competitiveness
• Increase the capacity of their staff to undertake product development activities
• Understand when and how to access external help if necessary

Immediate results include:

• Small businesses report that they are now market-led in their approach to product development, the range of people involved in product development are working better as a team, and individual skills e.g. design, packaging have been improved
• 5 new training courses (attended by 98 people) and 5 new information products were developed
• Demand has been stimulated for product development training and consultancy – participants paid a locally appropriate rate for all workshops. Participants want future training and consultancy, and are prepared to pay up to 20% more.
• The supply of product development services has been stimulated - the capacity of six staff from a local University has been built to offer mentoring in product development and quality assurance to local businesses and their students

In the long-term, increased sales will lead to benefits for the producers, including increased incomes and/or more regular employment, and these in turn will lead to economic benefits for the wider beneficiaries of the project as more income is available to spend on food, education and health services.

This project was funded by the European Commission and grant-making trusts.