Skill-based Competence and Competitiveness in the Garment-manufacturing Firms of Ghana.

Skill-based Competence and Competitiveness in the Garment-manufacturing Firms of Ghana.

ABSTRACT

 

This study examines the skills competence of workers in the garment firms and skills- based competitiveness of the garment industries of Ghana. A total of 34 garment firms made up of 27 firms registered with the Association of Ghana Industries and seven firms registered with the Ghana Free Zones Board, as well as 205 workers of the garment industries were selected for the study. The Explanatory Sequential Mixed Method Approach was used for the study in which the quantitative process was first used, followed by the quantitative process. Data were gathered using questionnaires and followed by interviews of some selected workers and management of garment firms. The quantitative data was analysed using Pearson Product-Moment Correlation and Simple Linear Regression while the interviews were analysed using Thematic Analysis. The results show that the garment firms in Ghana have high levels of skills gaps and shortages in critical skills areas of garment production, such as in computer- aided design, machine repairs, and quality assurance, among others. As a result of the skills gaps and shortages many of the garment firms are operating at a competitive disadvantage. Therefore, it is recommended that the garment firms should collaborate with academic and training institutions to increase the skills capacity of garment workers. Garment firms should also adopt competitive manufacturing strategies such as the use of technology, low-cost and added-value manufacturing among others to increase competitiveness. Finally, the Department of Labour should conduct periodic labour skills analysis so that up-to-date information about labour competencies, challenges and opportunities are known to academics, policy makers and industrial who depend on such information for human resource planning. The labour analysis can be done through some sort of liaison with COTVET and AGI as partners.

CHAPTER ONE

INTRODUCTION

 

 

1.0   Background of the study

 

Ghana’s manufacturing sector, like that in most developing countries, is dominated by firms in garment manufacturing. According to official government statistics, more people are engaged in the garment industry than in any other sector of manufacturing companies (Japan International Cooperation Agency 2008, Ghana Statistical Service, 2016). Specifically, over 242,000 people are engaged in the industry because four out of every five females that choose vocational education opt for training in garment manufacturing (Ghana Statistical Service, 2016). The majority of these firms, however, are micro or small enterprises with low capitalization and operate mostly in the informal sector with standard equipment. Such enterprises unable to compete globally (Quartey, 2006).

 

In 2001, the government initiated a major step towards industrialisation of the sector to make the industry competitive, increase employment, earn more foreign exchange and achieve high-value addition to the overall economy. This was through the Presidential Special Initiative (PSI) (Ghana News Agency (GNA), 2001). In spite of that step, the industry to a large extent is currently decoupled from the global production process due to the collapse of the PSI (JICA, 2008). Some firms still cater for domestic and worldwide production at a relatively small scale, but none of them can be said to be linked to the global production value chain (which was the original aim of the PSIs).

 

Some reasons were put forward to explain the inability of the garment sector to industrialize. These include the effect of import of second-hand clothes (JICA, 2008; Rodgers 2016), low-added value of garment manufacturing (Ghana Statistical Service,

 

2013), low skills (Hinshaw, 2012; Attenkah, 2008), and others such as gross under capitalization, unstable government policies, high operating cost and difficulty in accessing financial assistance from banks and other financial institutions (Quartey, 2006; Aryeteey, 2008). Thus, undoubtedly, the garment industry in Ghana is still faced with these challenges at the time when the global level of garment production is very competitive.

 

Despite the challenges, about 40% of all firms in the manufacturing sector of Ghana, according to the Ghana Statistical Service (2016), are garment firms, and these firms must possess the capacity to produce and compete nationally and globally because the garment industry is highly competitive (Cao, Berkeley, & Finlay, 2014). Admittedly, while there must be ways to solve or address the challenges in the garment sector, it is also important to focus on the skills which the current firms possess and determine their ability to compete both nationally and globally. This is because the garment manufacturing industry is highly labour intensive. With increasing globalization and a volatile production process, manufacturing firms with the support of their home countries rely on skills competency as a competitive advantage (Partnership for 21st Century Skills, 2008; International Labour Organization, 2014 and U.S. Council on Competitiveness, 2016). Investment in skills involving labour that must be abundant and moderately priced, therefore, is seen as a necessity for firms to respond to changing production systems that require mass products within the shortest possible time (Bernstein & Johnson, 2007; Daniels, 2007; Morris & Reed, 2008).

 

To compete globally, the garment-manufacturing firms in Ghana must invest in skills competitiveness to bid for international contracts. However, this can be done only after a comprehensive analysis that identifies and explores the dynamism of skills demand,

 

gaps, shortages and supply supported by policies that ensure opportunities for skills training, retraining and upgrading to guarantee skills-led competitiveness. Unfortunately, there is an empirical gap of both literature and evidence on skills levels in the various occupational categories in the garment sector of Ghana, beyond anecdotes. There are, however, a few publications that have discussed the labour market of Ghana and have mainly provided anecdotal evidence on the nature of skills levels in the job market (Boateng & Ofori-Sarpong, 2002; Baah-Boateng & Baffour- Awuah, 2015 & Hinshaw, 2012). None of these publications have focused specifically on the garment sector nor provided specific evidence of skills levels of the various occupational categories in the sector, hence, there is an absence of empirical knowledge on skills levels and its effect on the competitiveness of the garment sector.

 

The garment industry of Ghana was a major component of the manufacturing sector of the country. In the past, it employed the highest number of people and had the largest number of establishments in the manufacturing industry of Ghana (GSS, 2003; GIPC, 2004; JICA, 2008). However, within the context of global garment production, the Ghanaian garment industry is largely delinked from the global value chain. This situation, according to some analysts, is mostly the result of numerous problems including second-hand imports, the lack of government support and low skills, among others, that plague the industry (Quartey, 2006; Aryeteey, 2008; Attenkah, 2008; Hinshaw, 2012). The situation appears to be so dire that now the industry is contributing only 3% added value to the national economy (GSS, 2003).

 

1.1   Statement of the problem

 

Garment firms in Ghana that are currently operating have to compete at both national and international levels where skills-led competitiveness is the prime driver of

 

competitive advantage. According to the Global Competitiveness Index (2016), high skills levels are perceived to be the topmost drivers of competitiveness in all manufacturing firms around the world. Unfortunately, there is limited literature on skills levels of the various occupational categories in the garment sector of Ghana. Empirical gaps exist on how the industry is competitive at the national, global and firm levels and the extent to which skills drive such competitiveness. This empirical gap, if unaddressed, has serious implication on the ability of Ghanaian businesses to compete in the global industry and generate economic and employment benefits, as expected and so the study sought to provide useful insights that address the gap.

 

This study, therefore, sought to analyse skills from two important perspectives: institutions that use the skills and individuals that possess the skills. At the institutional level, the study ascertained the extent to which skills levels affect businesses – be it through skills gaps or skills shortages and subsequent effect of these on competitiveness at national, global and firm levels using the Resource Based View theory (Barney, Wright, & Ketchen, 2001). Similarly, at the individual level, the study sought to ascertain if factors affecting workers, such as career-incongruences or job satisfaction, have any effects on skills shortages and thus create recruitment challenges for the garment firms, using Holland’s Vocational Interest Theory (1997). Beyond filling the gaps in skills literature of the garment industry in Ghana, this study was to identify possible skills gaps and shortages in the garment-manufacturing sector, determine the relationship between skills levels and competitiveness, and competitive performance of the skills available in the garment industry.

 

1.2   Aim of the study

 

The aim of this study was to determine the competitive performance of garment manufacturing firms in Ghana based on the analysis of skills and job satisfaction of workers.

 

1.3   Specific objectives

 

The specific objectives of the study were to:

 

1. Examine skills gaps and shortages in the garment firms of Ghana (if any)

 

2. Determine the level of skills-based competence in the garment firms of Ghana

 

3. Establish the level of firm competitiveness in the garment sector

 

4. Examine the relationship between workers’ Career-interest Congruence and job satisfaction, and skills shortage in the garment firms
5. Determine the competitive levels of skills towards national and global skills competitiveness
6. Analyse skills-based competitiveness in the garment firms

 

1.4   Significance of the study

 

It was anticipated that the study would:

 

1. Provide information on skills levels in the garment manufacturing industry of Ghana for skills providers/financiers such the Skills Development Fund, the Labour Dept. of Ghana and other employers to plan and implement education and training provisions related to skills gaps and
2. Inform academic and non-academic training institutions such as Technical Universities, Universities, and the Gratis Foundation, among others, on skills gaps and shortages that exist in the garment industry so that they can mount programmes to address them or train prospective

 

3. Determine skills competence and skill based competitive advantage of Ghanaian garment manufacturing firms so that the information can be used by the Ghana Investment Promotion Centre (GIPC) in promoting garment manufacturing of
4. Document and highlight for policy consideration, the career interests and satisfaction levels of workers and how workers’ satisfaction affect productivity by creating shortages of qualified personnel in the garment

 

1.5   Definition of terms Skills:

Ordinarily, most people understand the concept of skills to mean the ability to do something or the capacity to carry out a task or sets of tasks. However, according to Green (2011), in the academic study of skills, the term skills can have different concepts for Economists, Sociologists, and Psychologist, among others. For example, although Economists and Psychologists equate skills to ‘competence’, A Psychologist’s primary interest lies in the generation and function of the components of the ‘competence’ while Economists focus on measuring the market valuations of the said ‘competence’. Therefore, to avoid ambiguity, this study adopts the definition of skills put forth by Cowan (1997) which defines skills as a measure of the amount of a worker’s expertise, specialization, wages and supervisory capacity.

 

Related to the meaning of skills, are concepts, which as explained by Green (2011), can also be as confusing as the concept of skills itself. Therefore, some of the skills concepts used in the study are explained as follows:

 

1. Skill Gaps refers to a situation when a labour force has a lower level of skill than is necessary to meet business objectives (Pye, 2004). Skills gaps are analogous to critical skills as explained by Morris & Reed, (2008)
2. Skill Shortages: this refers to the lack of adequately skilled and or qualified individuals accessible in the available labour market (Pye, 2004).Skills shortages are also analogous to Scarce skills, as explained by Morris & Reed, (2008)

• Generic Skills: refers to skills that are commensurate across a wide range of (although not necessarily)

1. Job Specific Skills: refers to skills that are technical to a particular job, based on education, training or
2. Occupational Skills Category refers to the job title in which the job description requires a particular set of skills acquired through training or

 

1.6   Structure and organisation of the study

 

This thesis is organized in six chapters. The first chapter (Chapter One) provides a brief background and justification of the study. It includes a listing of terminologies and their meanings, as used in this study. Chapter Two explores pertinent Ghanaian and international literature that is relevant to the variables and objectives of this study to help provide the context to the study and interpret findings. In Chapter Three, the philosophical underpinnings, the research design and the general methodology for the study are discussed. Chapter Four is the results and discussion section of the study where all the quantitative and qualitative results are presented and discussed. Finally, in Chapter Five, the conclusion, limitations and recommendations of the study are presented.

 

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References

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