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Growth and the organization of production: case studies from Nairobi's garment industry

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posted on 2024-09-05, 22:41 authored by Dorothy McCormick, Grace Ongile
Most enterprises in Nairobi's garment industry begin small and stay that way. Owners of businesses selected for intensive study consider weak demand to be the major barrier to growth. Current theories of industrial organisation identify two clearly different production models: Mass production, rooted in the advantages of scale economies; and flexible specialisation, a paradigm focusing on flexibility and innovation. Analysis of market relations in Nairobi's garment industry reveals not two, but five different types of firms: custom tailors, contract workshops, specialised small producers, minimanufacturers, and mass producers. Preliminary research indicates that some types can cope with weak and fluctuating demand better than others. Contract workshops, specialised small producers, mass producers capable of tapping external markets, and high quality custom tailors have the greatest potential for success, while low-to-medium quality custom tailors, mini-manufacturers, and mass producers tied to the domestic market have the least, The analysis has important implications for the shape of Kenyan industry, employment creation, and entrepreneurship. It also suggests that interventions by government and/or NGOs need to be targeted, not at small and medium-size, firms in general, but at the most promising types of producers.

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Institute for Development Studies, University of Nairobi

Citation

McCormick, Dorothy and Ongile, Grace. (1993) Growth and the organization of production: case studies from Nairobi's garment industry. Discussion Paper 294, Nairobi: Institute for Development Studies, University of Nairobi

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Discussion Papers 294

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Series paper (non-IDS)

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Institute for Development Studies, University of Nairobi

Language

en

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