Factors influencing the location and distribution of small scale informal industries in Dhaka city

Abstract

Small-scale informal industry is the most significant component of all type of industries in both urban and rural areas of Bangladesh because it contributessignificantly in the national economy of the country. In Dhaka city, these industries are mainly involved in the production of different items which are used for official and domestic purposes.The study has identified 08 (eight) categories of small-scale industries namely weaving workshop (banaroshi/zamdani), karchupi workshop, shoe factory, tailoring, wooden industry, automobile engineering/repairing workshop, welding workshop, engineering/lathe machine workshop. These industries are located at the study area of Dhaka city like Sutrapur, Shyampur, Lalbagh and Pallabi Thana. These 08 (eight) categories of small industries have the most concentration at those 04 (four)Thanasof Dhaka due to some factors and reasons. The specific objectives of this research are- to study the distribution and characteristics of small-scale industries; to identify the factors influencing the location and distribution of small-scale industries and to provide some policies and recommendations for the development of small-scale industrial sector of Dhaka.In this research process, 4 (four) Thanas are randomly selected as study area from the total 21 (twenty one)Thanas of Dhaka city. Here, 08 (eight) categories of small industries (total 775)are also identified randomlywhich covered above 5 per cent of 1,769 different categories of small industrieslocated in Dhaka. These 08 (eight) categories of small industries are located at these 04 (four) Thanas. In both cases, the simple random sampling technique is used with 95 per cent confidence level. However, the simple random sampling technique is used for selecting the 170 respondents to conduct the structured questionnaire survey who are 22 percent of the total 775 eight categories of small industries and 17 (seventeen) another respondents who are 10 per cent of 170 respondents for AHP analysis. In Dhaka, most of the small industries were established at the end of the year 2000 and few industries were established before liberation war, 1971. Around half (49.4 per cent) of these industries are established ongovernment owned land or space.The important aspect is that most of the small industries are located at Thanas of south part in Dhaka city. But the major concentration is found at 04 (four)Thanas like Sutrapur, Shyampur, Lalbagh and Pallabi among the 21 (twenty one) Thanas of Dhaka. Again, the highest concentration is found at the Pallabi Thana.In the study rea,59.4 per cent industries are occupying semipucca structures and 66.5 per cent industries have plot size of below 1 kathaand only 3.5 per cent have above 02 (two)katha of plot size. One of theimportant characteristics is that except 1.8 per cent,all industries operate 06 to 12 months of the year. The small industry owners are not well educated.Nevertheless, the workers have notechnical education or in some cases, they have no working knowledge of daily production process from any institution. Another aspect is that, the surrounding environment of 21.2 per cent industries is polluted by emissions produced by these industries. The 08 (eight) factors which influencesmall industries to locate and distribute at these four Thanas of Dhaka are identified based on the opinion of industry owners. These factors areavailability of skilled workers in the area; low cost of workers in the area; industry located near to the raw material/s; low transport cost to supply the finished products; low house rent or land cost in the area; easy access to roads to go market; linked to other similar industry in the area; tax free government land. A priority ranking among these 8 (eight) factors was made following the Analytical Hierarchy Process (AHP)analysis in ascending order based on the industry owners’ preference of choice to these factors.According to this AHP analysis, the rank 01 factor is ‘availability of skilled workers in the area’ which is more preferable than the other seven factors by the industry owners. However, the identified 06 (six) reasons for locating these industries at these o4 (four) Thanasareowner/ s practice this work from heritage; raw materials are close to industry; market is close to the industry; availability of skilled worker; availability of transport to carry the raw material and finished product; wholesalers buy from this place.In this research, it has alsoidentified some problems and constraints regarding operation of the industries. These are - mismanagement of production process; less technical knowhow of laborers; insufficient supply of raw materials; low infrastructural facility; less market accessibility; availability of unskilled laborers etc. Finally, a set of recommendations were drawn for further development of this sector.