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Technology Adoption in the Sialkot Sport Gloves Industry: A cross comparison between Small, Medium and Large Enterprises

Saba Fazal and Azam Chaudhry, Lahore School of Economics

The last two decades have witnessed a remarkable spread of technology in all spheres of economic activity. The change has been so rapid that firms are finding it difficult to keep pace with ever-changing market situations. The issue of technology adoption and technology mapping is particularly relevant for export-oriented manufacturers who face tough competition in international markets and must maintain a competitive edge by adopting latest product and process technologies to meet the requirements of upscale global markets. It is generally believed that Pakistani firms have lagged behind their competitors in international markets in terms of technological advancement and consequently Pakistan’s exports continue to remain concentrated in low value-added and low quality product segments. However the question of technology adoption and technology mapping by export-oriented manufacturers has received little attention in the empirical literature. This study is an attempt to explore the determinants of technology adoption and technology mapping on Sialkot gloves industry in Pakistan. According to Woodside and Biemens ( 2005), the term technology adoption refers to the decision-making process of an individual firm Technology adoption is a complex phenomenon and depends in large measure on firm characteristics and the economic environment under which the firms operate On the other hand, Technology mapping is really about determining the current technological and competitive position of a firm, and identifying areas of future investment that will yield long-term competitive benefits

In Pakistan, the export of sports goods increased from $177.055 million in July-January (2012-13) to $176.505 million in July-January (2011-12), according to the data of Pakistan Bureau of Statistics (PBS). Among sports goods, the highest increase of $25.06 million was witnessed in the trade of gloves, exports of which increased from $57.796 million in 2012 to $72.280 in 2013. At the same time, the exports of footballs decreased by 2.81 percent during the period 2013-12 to 2012-11 decreasing from $79.206 million to $76.679 million while the exports of other sports goods also decreased from $39.503 million in 2011-12 to US$ 27.796 million in 2012-13.

In our paper, we will map the gloves’ production process and also calculate differences in productivity across firms with respect to level of technology adoption and firm size. We will then see if the use of different types of technologies across firms in each stage of the production process can explain productivity differences across firms. We will calculate the total factor productivity, total revenue productivity and labor productivity. The productivities will help to make a cross comparison between small, medium and large enterprises on the basis of technical change, firm size and export destinations.

Besides this, we will also look at host of other factors that affect technology level and firm size in gloves production such as access to finance, research and development, level of management, firm age, owner’s education and export destinations. To have a better analysis we have gathered data from twenty small, medium and large sports gloves industries.

Bio

Saba Fazal Firdousi has recently completed her Post Graduate majoring in Economics from Lahore School. Now, she is working as Junior Teaching Fellow and industrial researcher at Technology Management Center, Lahore School. Her main area of focus is on designing cost structure models, feasibility studies, process and technology mapping for small and medium enterprises in Pakistan.

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posted by S A J Shirazi @ 3/24/2016 01:24:00 PM,

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