Although Bangladesh has developed industrial production capacity, it lags behind competing and comparable economies in terms of technological sophistication and high-value addition. While almost all of the country’s exports consist of manufactured goods, a large share of them are still low-technology products.
Despite the expansion of industrial capacity and export potential, a significant gap remains in technology-intensive production and productivity, which is also reflected in the latest Competitive Industrial Performance (CIP) Index of the United Nations Industrial Development Organization (UNIDO). The index measures countries’ relative positions in industrial production, export capacity and technological advancement.
In UNIDO’s 2026 country classification, Bangladesh, India, Indonesia and Vietnam have been placed in the “Emerging Industrial Economies” category. The organisation has included in this category economies that have demonstrated sustained progress in industrial production. From 2000 to 2024, manufacturing value added per capita in countries in this category increased by an average of 8.7 percent a year.
Bangladesh lags behind competing and comparable economies in the same category in the CIP Index. According to UNIDO’s CIP 2026, Bangladesh ranks 62nd among 153 countries, with a score of 0.043 against a global average of 0.064. Vietnam ranks 30th, Indonesia 38th and India 39th. All three countries have higher scores than Bangladesh.
Alongside overall industrial capacity, Bangladesh also lags in terms of technological sophistication. In 2024, 93.6 percent of the country’s manufacturing value added came from low-technology activities. Medium-technology activities accounted for 1.9 percent, while high-technology activities contributed just 0.8 percent. Bangladesh ranks 117th in terms of the share of manufacturing value added generated by medium- and high-technology activities. It similarly ranks 146th in terms of the share of medium- and high-technology products in exports.
Bangladesh also has a significant gap with competing countries in the technological structure of its exports. Medium- and high-technology products account for just 3 percent of Bangladesh’s manufactured goods exports. The corresponding share is 35.2 percent in Indonesia, 41.5 percent in India and 54.1 percent in Vietnam. In other words, compared with similar economies, Bangladesh’s exports remain largely dependent on low-technology products.
Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), told Bonik Barta, “Overall, Bangladesh’s export earnings have increased, but there has been little progress in technology-intensive productivity. In one of our major competitors, Vietnam, the share of low-technology products has declined while that of high-technology products has increased. Bangladesh, in contrast, remains largely stuck in low-technology production. This is why we’re falling behind in competition.”
The economist said foreign investment has played a major role in Vietnam’s progress. “Vietnam is a country with an industry heavily reliant on foreign investment. As a result, its technological capabilities have advanced rapidly. Our export-oriented industries, in contrast, have been established mainly through investment by local entrepreneurs. Even so, the contribution of garments to our export earnings has increased.”
“Structural reforms and policy changes are needed to improve productivity and upgrade technology. Instead of providing blanket incentives to everyone, targeted support could be provided to investors in high-value-added sectors such as light engineering and semiconductors. This would help increase industrial diversification, technological capacity and productivity,” he said.
But Bangladesh is ahead in terms of the share of manufactured goods in total exports. Manufactured goods account for 99.6 percent of the country’s total exports. The corresponding share is 92.8 percent in Vietnam, 80.4 percent in Indonesia and 67.6 percent in India, meaning Bangladesh’s main weakness is not a lack of an industrial base, but its inability to transform the existing industrial base into technology-intensive and high-value-added production.
Bangladesh is also ahead of some competing countries in terms of manufacturing value added per capita. In 2024, manufacturing value added per capita in Bangladesh was $615, higher than $341 in India and $518 in Vietnam. But the figure was $815 in Indonesia. In UNIDO’s index, Bangladesh ranks 84th in terms of manufacturing value added per capita, with a score of 0.020 against a global average of 0.074.
Alongside India, Vietnam and Indonesia, Bangladesh’s export products also have to compete with those of Turkey and China in the global market. China ranks second and Turkey 26th in the global industrial competitiveness index.
Industry stakeholders say policy continuity, uninterrupted energy supply, political stability, security, inflation control, and lower financing and infrastructure costs are essential for strengthening industrial capacity and reducing costs in the manufacturing sector. Developing a technically and professionally skilled workforce in line with the needs of industry is also crucial to increasing productivity.
Highlighting the shortage of technology and skills, Anwar-Ul-Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries (BCI), told Bonik Barta, “Education systems around the world have become increasingly AI- and technology-driven, but we haven’t been able to bring our universities and educational institutions to that level. Our education and professional skills aren’t aligned with the current needs of industry. The necessary link between education and industry has also not been established.”
He added, “If we could produce the necessary skilled workforce and professionals, the situation in various sectors, including light engineering, could have been different. The shortage of skilled workers is hindering the development of these sectors, and we remain heavily concentrated on low-value products. The ready-made garment sector also needs to move towards higher-value-added products. There’s no alternative to a skilled workforce to achieve this.”
Amid this reality of Bangladesh lagging behind competing countries in technological capacity and skills, National Productivity Day will be observed today.
At a roundtable held at the conference room of the Ministry of Industries yesterday to mark the occasion, Industries, Commerce and Textiles and Jute Minister Khandakar Abdul Muktadir said, “To increase productivity in the country, overlapping or duplication of similar activities among government development projects must be stopped. For this, before taking up new projects under the Annual Development Programme (ADP), it’s necessary to use technology to verify whether their objectives or activities overlap in any way with existing projects.”
Emphasising the need to scrutinise new ADP project proposals through an AI-based system, the minister said, “If software can identify whether any other ministry or agency is already implementing a project for the same purpose, it’ll improve the efficiency of government spending and reduce waste.”
Highlighting the realities of the global market, he said, “Increasing productivity is important not only for Bangladesh but for every country. If a product can’t be produced competitively, international markets will be taken over by other countries. So alongside protecting the market, domestic industries must develop the capacity to compete within a specific timeframe. To advance the country’s industries and economy, we must ensure realistic planning, effective use of technology, a skilled workforce and accountable leadership.”