Growth and the organisation of production: Case studies from Nairobi's garment industry

In: Discussion Paper, 294

Abstract

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 and flexible specialisation. 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, mini-facturers, and mass producers. 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-manifacturers, and mass producers tied to the domestic market have the least. The analysis 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. (DÜI-Hff)