Innovation in the Textile Sector of Lahore (Differences between Exporters and Non- Exporters)-2021

The Innovation and Technology Centre (ITC) of the Lahore School of Economics conducted a survey in 2018/2019 to observe the growing trends in innovation and technology upgradation in the exporting and non-exporting firms from the textile and readymade garment sectors in Lahore. The purpose of this survey was to observe the extent, quality and impact of innovation activities on the performance and profitability of the innovating exporting and non-exporting firms. The data consisted of 125 firms involved in manufacturing readymade garments and other textiles, including 87 exporting and 38 non-exporting firms, collected during the period of September 2018 to December 2018. In the surveyed exporting firms, 40% of those firms were selling 100% of their output abroad, with majority of them exporting to Europe followed by worldwide.       

Looking at the results of innovation in the textiles sector, most of surveyed exporting firms revealed that their revenues increased, cost of production decreased, quality of products improved as the result of innovation. Whereas, a majority of both exporting and non-exporting firms reported that they didn’t have to retrain their employees and did not face resistance from the employees as the result of innovation. Moreover, both exporting and non-exporting firms did not have to reduce their prices as the result of innovation.

The two greatest barriers faced in the textile sector by both exporting and non-exporting while trying to perform innovation were lack of financing and lack of innovation opportunities. Thus, it can be concluded that more incentives for innovations could be given by providing more sources of funding for the innovating firms in the form of aid from the government and with the assistance of financial institutions.

Link to the Report: https://itc.lahoreschool.edu.pk/downloads/Innovation%20Report%202021V2.pdf