Paradigm of industry life cycle and industry life cycle shift contrast to flying geese model: with special reference to Sri Lankan readymade garment industry

Abstract

The Flying Geese model was used to explain the industrial development in latecomer economies with industry life cycle origination, growth and decline and industry life cycle shift form country to another, especially for Asian region. This paper compare the Sri Lankan readymade garment industry life cycle with Flying Geese model to verify the validity of the model refer to Sri Lanka. Similarly this paper will explore how this Sri Lankan readymade garment industry life cycle rise, fall and its effect on the comparative advantage and international competitiveness among the nations to influence for a geographical shift of the industry. Businesses engaged in high labour intensive industries like readymade garment industry often use spatial strategies for geographical relocation of the industry to countermand the rising economical and social downturn of a given country. Readymade garment life cycle shift occurs whenever a domestic country’s internal production competition intensified due to the increased number of manufacturing firms and the industry reached to its maturity. With the growth of the industry, workers will gain their collective bargaining power and wages starts to rise, health and safety cost will rise. Increased state regulations, tax and duties will increase the industrial pressure with high budget allocations for industrial good governance and social responsibilities. Severing the condition intensified domestic and international competition demand to enforce the cutting edge industrial technology with high operational and maintenance costs. Industry will tries to base with technology by replacing the labour to face and control the mounting labour and operating costs while improving the production quality and to achieve delivery deadlines. By this phase industry’s both labour cost and technical cost were grown drastically, diminishing the country’s comparative advantage by making the country no more low cost attractive production site. With the shrinking the profit margins, the brands and manufactures tend to seek low-wage, industrially unorganised, poor legitimate, fresh and alien more lucrative geographical locations to retain and safeguard their high returns margin. Increasing tendency of the globalisation during the past decade made every country to worry about the international trade and division of labour irrespective of the development level. Sri Lanka as a developing country in South Asia and ready-made garment industry as the key decisive exports manufacturing sub sector portrait a comprehensive industry life cycle and industry life cycle shift in and out of Sri Lankan border within period of less than four decades.