Industrial Diversification in Bangladesh: Opportunities and Challenges
By 2014, Bangladesh had leveraged its abundant and low-cost labor to spur economic growth and attract both domestic and foreign investment. However, Bangladesh faced a new challenge as it needed to strengthen and modernize its economy through diversification of industry sectors and development of a highly skilled workforce.
To address these challenges, the Milken Institute, in partnership with the Bangladesh Enterprise Institute, convened a two-day Financial Innovations Lab at the Singapore Management University in August 2014. The event brought together representatives from government, investors, and leaders in finance and economic development to analyze best practices for economic modernization. Lab participants from Singapore discussed lessons learned in their country as it transitioned from a labor-intensive economy to one increasingly based on capital factors of production and high-skill industries. Lab participants jointly concluded that Bangladesh was aptly poised to diversify its sectors and attract new types of foreign direct investment and further suggested that, to do this, the government must address certain barriers that have limited both foreign interest and domestic expansion of industries. Specifically, participants called for private sector governance structures, clear goals and a focus on bottom lines. Government actors were called upon to focus on concrete policies and enforcement measures to help further support this industrial diversification.