Last year, at the invitation of Shomaj o Poribesh Rokkha Shongothan, I met 26 entrepreneurs in Meherpur, 21 of whom were women. Nearly all of them were in the food processing business, including making pickles, biscuits, chips, spices, and cultivating mushrooms. But none of them had stepped outside their kitchen—their comfort zone.
Women own only 7.2 percent of Bangladesh’s business establishments, while roughly a quarter of the country’s SMEs are now women-owned. Most of these women work in catering, confectionery, tailoring, handicrafts, and beauty sectors. These are trades women already know from their domestic experience and which need low capital, low mobility, and limited confrontation with the market. Many have simply extended their kitchens into shopfronts. It is progress, but progress within a boundary, not beyond one.
Going beyond the domestic setting and onto any residential street in Dhaka, Chattogram, or a district town, a different scene unfolds: mobile-recharge shops, electronics shops, clusters of small restaurants, grocery stores, fruit and vegetable carts, clothing and jewellery shops are all crowded within a hundred metres of each other. With these, many are able to make a living. But are these ventures themselves sustainable or just enough to sustain?
There are at least 46,110 formally registered manufacturing factories in the country, mainly producing readymade garments and leather goods. A World Bank report finds that about 90 percent of non-farm enterprises are micro, small, or medium, and concentrated in wholesale and retail trade. Geographically, the economy remains heavily Dhaka- and Chattogram-centric despite there being 177 identified SME clusters across 51 districts. Micro, small, and medium enterprises make up roughly 90 percent of our industrial units and employ close to 80 percent of the industrial workforce, yet contribute only about 25 percent to GDP, far below those of Vietnam (at 45 percent), Cambodia (at 58 percent), and Indonesia (at 59 percent). Bangladesh has an enormous quantity of entrepreneurship, and a narrow quality of it.
This pattern is not only guided by gender or geography, but also by imitation. I met seven entrepreneurs in Chapainawabganj, all producing vermicompost because “everyone else is making a profit in this business.” Once a technique works locally, it lowers the uncertainty of entry. That is, replicating a proven path feels safer than experimenting with a new venture.
When Desh Garments’ partnership with South Korea’s Daewoo succeeded, hundreds of firms entered the industry. After Desh Garments’ Daewoo-trained workers spread out and other firms copied the model, the number grew significantly between 1984 and 1999. Today, factories in this sector make near-identical goods and producers have little left to compete on but price—a squeeze that cost 46 factories and 25,000 jobs in 2019 alone, and has dragged real apparel prices down by roughly a fifth over the past decade.
So, imitation can build an industry but it also breeds crowding and associated demerits when everyone follows the same path and competition intensifies.
This tendency, in Bangla, is known as “hujug”: a fad-driven rush towards whatever is visibly working, regardless of considerations for individual fit, thus clustering entrepreneurs within a few sectors. And this has played out disastrously before. The 2010-11 share market crash saw the DSE index nearly double in a year before collapsing 21 percent within weeks, wiping out many small investors who had rushed in on borrowed money. Hujug culture lowers entry cost, but it also guarantees overcrowding and, if unprepared, an eventual collapse.
Why does entrepreneurial energy in Bangladesh funnel so heavily into trade, tailoring, and a handful of manufacturing verticals, rather than spreading into technology, specialised services, or higher-value production? Part of the answer lies less in capital availability and more in culture, specifically the pattern captured by Geert Hofstede’s cultural dimensions. Bangladesh scores 80 on the Power Distance Index, one of the higher scores worldwide. In a high power-distance culture, business legitimacy is inherited more than invented as sons take over fathers’ shops and family reputation anchors a venture’s credibility. Thus, departing from an established, socially sanctioned line of business carries real reputational risk. Entering trade or tailoring is less a creative choice than a socially safe default.
That tendency is reinforced by Bangladesh’s very low score on Individualism: just 20 out of 100, indicating a strongly collectivist society. Business decisions are rarely made by isolated individuals weighing personal risk and are instead almost always made within the extended family. A novel idea that most relatives cannot quite make sense of gets no social cover. On top of this sits a moderately high Uncertainty Avoidance score of 60, so people lean towards tried-and-tested methods over anything ambiguous. Instead of investing a few years for possible returns, people look for practical and short-term ideas which offer quick returns. This does not mean that Bangladeshi entrepreneurs are unambitious. A masculinity score of 55 signals a genuinely achievement-oriented culture, and two decades of growth and export performance prove ambition is not in short supply. However, what is missing is diversification, which could help ambition flow.
The deeper problem, then, is not that women choose food processing or that farmers choose vermicompost, or that a street fills with the same kind of shops. The issue is an entrepreneurial culture leaning on the safest visible model, one that, for women, carries an added layer of socioeconomic pressure. Educators and business-development organisations need to actively expose smallholders, especially women, to markets beyond what is locally familiar. Access-to-finance interventions (the standard prescription) will do little on their own if the cultural calculus around risks, legitimacy, and family sanctions goes unaddressed.
Bangladesh has neither a shortage of entrepreneurs nor of ambition. It has a shortage of permission for entrepreneurs to be different. A good innovation ecosystem opens up more possibilities than any one entrepreneur could find alone, making it easier to solve numerous problems in new ways. By presenting a wider range of models to entrepreneurs than the pickle jars, biscuit tins, or vermicompost heaps that their neighbours have already mastered, it offers something the hujug culture never can: a genuine choice about which door to walk through.
Dr Sabrina Luthfa is associate professor at the University of Liberal Arts Bangladesh.
Views expressed in this article are the author's own.
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