Manufacturing guy-at-large.

Pietra Rivoli on progress in developing economies

Added on by Spencer Wright.

NPR's Planet Money... rocks. Their t-shirt saga in particular has been an excellent piece of long form journalism (and, incidentally, also a great example of how crowdfunding is primed to shake up revenue streams in journalism).  This week's installment included an interview with Pietra Rivoli, and the segment below struck me on a few levels. I think the lesson here can apply not only to economies, but also to companies whose primary product is a low value commodity. If your business is converting one commodity to another, one possible way to make a big jump in your revenues is to control the supply chain in one direction (raw materials) or the other (finished goods).

Below, Pietra Rivoli being interviewed by Alex Blumberg. 

If we want to try to figure out: Is [the Bangladeshi economy] stuck? Or is it moving, inching slowly forward? What kinds of answers would you be expecting to hear from people to indicate one direction or another? 

Well, if you think of where Bangladesh is in the t-shirt story, it's in this cut-and-sew phase. So there are backward linkages from there, back to yarn and fiber, and there are forward linkages from there, to the retail complex, to the department stores in New York. And in order to not be stuck, you either have to expand the backward linkages or the forward linkages. And I think the interesting question is, What are people thinking about that? What kind of prospects are there, for capturing value moving in either direction?

You mean these cut-and-sew factories that we're going to be visiting - why aren't they doing their own spinning? Or why aren't they doing their own retailing going forward?


If you're not following Planet Money, you should be. It rocks.