Tapping the potential of informal sectors

Photo: Star

Although Bangladesh has achieved a lower middle-income status, there are not enough jobs in the formal sector to absorb 1.8 million young people entering the labour force each year.  According to ILO estimates, 88 percent of Bangladesh's labour force is employed in the country's informal sector. As a hotbed for learning and innovation, it provides opportunities for acquiring skills and work, particularly for disadvantaged groups who fail to complete basic general education.

According to a recent Cornell study on Dhaka's informal mobile phone repair market, repair work is a critical, technological vocation that goes unrecognised in the Bangladeshi economy. Moreover, it highlights innovative practices in the informal economy where technicians improve engineering knowledge of mobile phones by engaging in hands-on, crafts-based innovation through repair work. Unlike formal repair services offered by brand companies such as Nokia and Symphony, informal repairers focus on repairing rather than replacing damaged mobile parts. Using problem-solving abilities, acquired knowledge and skills, they address complex problems related to the design, function and durability of sophisticated, fast changing mobile phone technologies. Moreover, these workers often do not attain technical degrees; instead, they rely on years of apprenticeship and highly skilled practice gained through working in the informal or semi-formal sectors.

Informal mobile repair activity is closely linked to Dhaka's bhangari or scrap collection trade.

Bhangari shops often import cheap, high-quality, rubbish electronics from countries such as China with the aim to re-manufacture, repair or dismantle the goods. Dismantlers, in particular, separate useable from non-usable components. In turn, as most mobile phones in use in Bangladesh are manufactured outside the country, informal mobile phone repairers rely heavily on bhangaris for key accessories such as spare batteries, replacement screens and so forth. Interestingly, these activities display how both repairers and bhangari traders recognise hidden value in broken electronics; additionally, they creatively add value to products by keeping them functioning over time.

Repairers also collaborate with each other to deal with issues of newer, fast-changing mobile phone models. Moreover, they draw on global resources to study the devices by regularly browsing the internet; workers often overcome language and literacy barriers by turning to circuit diagrammes published on international online forums.

China is widely known as the leading producer of knock-off goods. The economy, however, has quietly established itself as a strong global competitor by bringing innovative products to the market. Instead of focusing on technological breakthroughs, China emphasises on accelerated innovation i.e. incorporating new, commercially viable ideas that add value to existing, sophisticated technologies. It is highly prominent in the country's Shanzhai or "no brand" cell phone manufacturing industry. On the surface, Shanzhai phones copy the exterior designs and trademarks of brand name cell phones. On closer inspection, the producers harness user feedback to develop the final product. While some improvements are minor, studies indicate that Shanzhai phones have functions and technologies that rival Samsung, Apple and Sony's products. Given the influx of cheap Chinese handsets in the Bangladeshi mobile phone market, repairers are advantageously positioned to improve their skills and knowledge by studying these distinctive forms of Chinese innovation. On another level, local mobile phone manufacturers can benefit from tapping into the repairers' skills, knowledge and networks and thus, expand Bangladesh's mobile manufacturing industry.

 With nearly 126.87 million mobile phone subscribers across the country, as per Bangladesh Telecommunication Regulatory Commission (BTRC) estimates, Bangladesh is one of the fastest growing mobile markets worldwide. While smartphones account for 20 percent of all handsets in the country, demand for both smartphones and feature phones that lack cutting-edge functionalities, has persistently grown over the past few years. Mobile phone imports, however, have been sluggish as the Bangladeshi government raised its taxes from 10 percnet to 21.75 percent in the past fiscal year. In turn, the high tax on mobile imports has been a boon for local mobile producers such as Walton group.

According to The Financial Times, with assembly lines based in Bangladesh, Walton has captured nearly a third of the domestic market share by selling about 140,000 smartphones per month; since last year, it has also started exporting mobile phones to Saudi Arabia, Nepal and Qatar. Like its Southeast Asian peers, the company, however, counts on Chinese engineers to design its mobile products. Instead, Walton can employ large pools of repairers in its assembly lines to harness skills, further bringing down production costs and reduce its dependence on Chinese workers.

Bangladesh's informal mobile phone repairers are not an isolated case; rather, they represent the largely invisible yet skilled labour present in the informal economy. Sadly, however, Bangladesh continues to brand the sector as highly unproductive. The government and private enterprises need to actively study the sector and create stronger links with the informal economy so that it can promote new opportunities for industrial growth. These initiatives can create pathways for existing workers to shift away from the informal to the formal sector.

The writer is a graduate of Mount Holyoke College.