Last year, in response to an invitation from Shomaj o Poribesh Rokkha Shongothan, I had the opportunity to meet with 26 entrepreneurs in Meherpur, with 21 of them being women. The majority of these entrepreneurs were engaged in food processing activities, such as producing pickles, biscuits, chips, spices, and cultivating mushrooms. However, it was observed that most of these entrepreneurs had confined their business operations to their kitchens, staying within their comfort zones.
Statistics reveal that women own only 7.2 percent of business establishments in Bangladesh, while approximately a quarter of the country’s small and medium enterprises are owned by women. The sectors where women predominantly operate include catering, confectionery, tailoring, handicrafts, and beauty services. These sectors are familiar to women due to their domestic experiences and require low capital investment, minimal mobility, and limited interaction with the market. Many women have expanded their home kitchens into storefronts, indicating progress within a constrained boundary rather than breaking new ground.
Venturing beyond the domestic sphere to residential streets in major cities like Dhaka, Chattogram, and district towns presents a different landscape. These areas are characterized by a cluster of businesses such as mobile-recharge shops, electronics stores, small restaurants, grocery outlets, fruit and vegetable carts, as well as clothing and jewelry shops operating within close proximity. While these businesses provide livelihoods, questions arise about their sustainability and whether they merely offer subsistence for the entrepreneurs.
Bangladesh boasts approximately 46,110 formally registered manufacturing factories, primarily focusing on readymade garments and leather goods production. A significant proportion of non-farm enterprises, estimated at around 90 percent, fall under the micro, small, or medium category, with a concentration in wholesale and retail trade. Despite the presence of 177 identified small and medium enterprise clusters across 51 districts, the economy remains heavily centered around Dhaka and Chattogram. These enterprises constitute about 90 percent of industrial units in the country and employ nearly 80 percent of the industrial workforce, yet their contribution to the GDP stands at approximately 25 percent, significantly lower than countries like Vietnam, Cambodia, and Indonesia.
The inclination towards certain business sectors is not solely influenced by gender or geography but also by a tendency towards imitation. In Chapainawabganj, for instance, I encountered seven entrepreneurs engaged in vermicompost production simply because of the profitability observed in the sector by others. The replication of successful business models reduces the uncertainty associated with venturing into new industries, leading to a crowded market and heightened competition.
The phenomenon of imitation, termed “hujug” in Bangla, signifies a trend where entrepreneurs flock towards visibly successful sectors without considering individual suitability. This trend has been witnessed in past instances, such as the share market crash of 2010-11, wherein a rush towards a booming market led to detrimental consequences for investors. The culture of imitation, while reducing entry barriers, also contributes to oversaturation within specific sectors, potentially leading to market instability.
The entrepreneurial landscape in Bangladesh is characterized by a concentration of activities in traditional trades like tailoring, trade, and a few manufacturing domains, rather than diversifying into technology, specialized services, or higher-value production. This trend is attributed not only to capital constraints but also cultural factors, as highlighted by Geert Hofstede’s cultural dimensions analysis. The cultural emphasis on inherited business legitimacy, strong collectivism, and risk aversion hinders the exploration of innovative and diverse business avenues.
To foster a more dynamic entrepreneurial environment, it is imperative for educators and business development entities to expose small-scale entrepreneurs, particularly women, to markets beyond their immediate surroundings. Addressing cultural barriers related to risk perception, legitimacy, and familial expectations is crucial, as financial interventions alone may not suffice to drive entrepreneurial diversity.
Bangladesh exhibits a wealth of entrepreneurial talent and ambition, yet there is a need to encourage entrepreneurial uniqueness. An innovative ecosystem that presents a wide array of opportunities beyond traditional sectors can empower entrepreneurs to explore new avenues and address challenges in innovative ways. By offering diverse models beyond the conventional businesses prevalent in the community, entrepreneurs can make informed choices and break free from the constraints of imitation-driven culture.
Dr. Sabrina Luthfa, an associate professor at the University of Liberal Arts Bangladesh, shares these insights based on her observations and analysis of the entrepreneurial landscape in Bangladesh. The views expressed in this article reflect the author’s perspective on the subject matter.
For more expert opinions, commentaries, and analyses, follow The Daily Star Opinion on Facebook. To contribute your articles or letters to The Daily Star Opinion, refer to our submission guidelines for further details.