The ‘Industrial R&D’ versus ‘R&D subsidy’ in textile sector

August 14, 2006 at 1:25 pm | Posted in Arsalan's Dawn Article | Leave a comment




Research and Development (R&D) is the main philosophy behind successful industries. From idea creation, developing product, marketing and enhancing operations, R&D plays important part in each steps. Without R&D the industry become stagnant and loose competitive advantage. That’s why it has become an important area of concern for developed countries. Despite they have high cost of industrial operations and manufacturing, but the industry is still thriving because of R&D culture.


Industrial R&D comprises following activities:


         Development of new materials and products.

         Enhancing existing materials and products.

         Development of new technologies.

         Enhancing of existing technologies.

         Management and market research.

         Industrial operations and supply chain research.



The R&D project starts with a precise project description. It includes enlisting of project resources, time, budget and milestones. After the successful completion, a complete audit is performed which evaluates the R&D project. The outcome of a R&D project is a publication which details all the project activities, milestones and results. These publications are then used by peers (industry and academia) for critical analysis. By this a complete benefit of R&D activity is realized which in-turn benefits the industry as a whole.


After a long time Pakistani government and leaders realizes the importance of industrial R&D. This issue was on the front agenda in economic policy making in last financial year and also in current year of 2006 – 2007. Textile sector including garments and finished goods were included in the R&D scheme. An export subsidy was given to these sub-sectors under the name of R&D subsidy. However, for the implementation of a successful R&D process, all combined necessary resources are required. Only one resource will not serve the purpose. Money in this case is available to companies for research through this subsidy. What about the other resources, i.e. researchers, machines, materials, previous research literature database, etc. which are important pre-requisites to start R&D activity.


As a matter of fact no textile industrial units would be willing to spare its machines and raw materials for R&D purpose. It is considered a huge loss to dedicate such resources for research as it decreases daily production efficiency and increases wastages. Attaining short term goals is a top priority for managers, executives and share holders, they will not be confident to follow this line of action which requires long term planning.


Researchers, which comprise the intellectual content in the R&D activity, are short in the industry. There are hardly any managers in the industry dedicated to research and development. All of them are devoting their 100% time to complete the core activity of the company i.e. production. Furthermore, in existing textile institutes in the country, there is a huge shortage of professional researchers.


Under these circumstances, it is quite unclear how the government realizes that the initiative for industrial R&D could be triggered through subsidizing exports.


Furthermore, there is not any kind of detail that how many R&D projects are completed or are still in pipeline on the base of which the textile R&D subsidy is claimed in financial year 2005-2006 by exporters. Neither there are any details and publications on the R&D results to-date. In the absence of any R&D activity in the industry, this subsidy could only function as a normal export subsidy or industrial survival subsidy.


The way this subsidy is dragged to next financial year is also questionable. Despite of the absence of any industrial research policy, again millions of rupees are planned to disburse.

There should be a central controlling authority looking after industrial R&D and working in close partnership with research institutes.  Close monitoring of R&D budget and that it is being spent in a proper way must be ensured. A pragmatic research is the core dogma, if applied can boost the value of textile products and industrial operations.


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