Sialkot contrasts sharply with the rest of Pakistan in terms of manufacturing and export activity. The number of individuals involved in manufacturing [proportionate to population size] is over four times higher, the number of manufacturing establishments is six times higher, and the exports are eighteen times higher compared to the rest of the country. Equally contrasting is the profile of manufacturing establishments. The proportion of manufacturing workers employed in the large firms nation-wide is 27 percent, compared to less than one percent in Sialkot. The proportion working in small enterprises is over 90 percent in Sialkot versus about 60 percent in the rest of the country.
Papermaking in Sialkot dates back to the time of the Mughal Emperor Akbar and it was Raja Man Singh who, as the Governor of Kabul, initiated the industry. Sialkoti paper, also known as Man Singhi paper, was famous all over the world.
As with industrial clusters elsewhere in the world, the birth of Sialkot’s surgical industry can partly be explained by what Paul Krugman [U.S. economist] calls an "historic accident". The Damascene craftsmen of Sialkot (koftgars or koftars) were famous during the Mughal period for their fine swords and daggers, but the introduction of rifle in 1857, put them out of work. The opportunity for alternative work arose in 1905, when some broken equipment at the American Mission Hospital in Sialkot afforded a chance to adopt their skills. Encouraged by the hospital staff, they gradually started manufacturing replicas of originals. Before long, orders were received from other mission hospitals in British India. By 1920, Sialkot was exporting to all parts of the British empire including Afghanistan and Egypt and was later selected for supplying surgical instruments for the Allied forces in World War II. The Metal Industries Development Centre (MIDC) was established in 1942 to act as a supply and inspection agency for the Allied forces. Although the surgical instruments manufacturing factories were mostly owned by Hindus, the craftsmen were mostly Muslim and the industry was not affected by the partition of British India. At present, the surgical instruments manufacturing industry in Sialkot is one of the world's largest surgical instruments manufacturing industrial clusters second only to Tuttlingen, Germany. However, the quality of workmanship and raw materials are the issues that have been hindering the progress of this niche industry which is also likely to face increasing pressures from the rapid advances in the field of surgery (e.g., minimally-invasive endoscopic surgery).
According to a myth, the sport goods industry started in Sialkot because an English man broke his tennis racket and, since an immediate replacement was not possible, he asked a local to repair it. The man did a perfect job and the sports goods manufacturing industry took root in Sialkot. Recorded history of the industry goes back to 1895 when the city started becoming famous for its tennis racquets. By 1903, cricket bats were being crafted from imported English willow and exported to different parts of South Asia and beyond. In 1922, a local manufacturer was awarded the British Empire Export Award for supplying footballs to the British Army. Over the years the industry grew to include a variety of wood and leather-based sports equipment, and diversified into related industries such as sports apparel and riding equipment and even the Scottish bagpipes. International collaborations with the well-known sports brands like Adidas (Germany), Puma (Germany), Nike (USA), Dita (UK), Slazenger (UK - owned by Puma now) do exist but the issue of 'child labour' in this, predominantly, manual labour-oriented industry remains a controversial factor which has, sometimes, led to a lost of market share to the new entrants in the sports goods industry in Thailand, Korea and China.
The vast majority of firms in this city are family owned and managed. There are few professionals; firms are staffed by craftsmen who learned their trade by serving as apprentices to other craftsmen. Sialkot has a high degree of exposure to the international economy with entrepreneurs participating in numerous trade fairs abroad and hosting visits of foreign buyers. Even the smallest of exporters is likely to boast of a fax machine and a mobile phone to maintain contact with the outside world. This exposure to the international environment is gradually leading to the realisation that firms will have to become more professional in order to compete favourably in years to come. Issues like ISO 900 certification have led to a realisation that local industry has to spend a greater effort on worker training and quality assurance than what has been done historically.
Firms typically prefer to subcontract rather than make investments in equipment and manpower, which would be necessary for in-house manufacturing. Even among the workers working within the firm, many are piece-rate craftsmen rather than salaried employees. Firms subcontract anywhere from 20% to 80% of their manufacturing to vendors. For instance soccer ball exporters often subcontract upto 90% of their value-added to cottage industries with only material cutting , final testing and packaging being performed in-house.
The preference for subcontracting and piece-rate workers over vertical integration and the development of a loyal workforce is the natural outcome of the fierce entrepreneurial spirit, which is characteristic of the citizens of this city. When asked about his ambitions, a young craftsman stated that " I would like to own my own workshop and become an exporter or maybe get exported[ i.e. migrate ] ". This entrepreneurial spirit results in low company loyalty; not many want to remain as employees in someone else’s organisation. As soon as a person has saved enough to buy the most rudimentary equipment, he wants to get started in exports. Wide spread sub-contracting, strong socio-economic networks of support, and the entrepreneurial spirit in the city results every year in the birth of hundreds of companies such as the Suddle Group described below in the boxed insert.
Sialkot’s industries are in many ways typical of industrial clusters in many parts of the world. Clusters are defined as geographical concentrations of related industries. Growth results from agglomeration effects as specialised skills and services are developed within and attracted from without the cluster. The presence of numerous final firms and multiple sources for ancillary services and inputs results in fierce competition and local rivalries. It also results in pool of specialised manpower, in rapid diffusion of information, and in low barriers to entry due to easy access to the resources within the cluster. As Marshall put it " The mysteries of the trade become no mystery; but are as it were in the air...if one starts a new idea, it is taken up by the others and combined with suggestions of their own; and thus it becomes the source of further new ideas.
Papermaking in Sialkot dates back to the time of the Mughal Emperor Akbar and it was Raja Man Singh who, as the Governor of Kabul, initiated the industry. Sialkoti paper, also known as Man Singhi paper, was famous all over the world.
As with industrial clusters elsewhere in the world, the birth of Sialkot’s surgical industry can partly be explained by what Paul Krugman [U.S. economist] calls an "historic accident". The Damascene craftsmen of Sialkot (koftgars or koftars) were famous during the Mughal period for their fine swords and daggers, but the introduction of rifle in 1857, put them out of work. The opportunity for alternative work arose in 1905, when some broken equipment at the American Mission Hospital in Sialkot afforded a chance to adopt their skills. Encouraged by the hospital staff, they gradually started manufacturing replicas of originals. Before long, orders were received from other mission hospitals in British India. By 1920, Sialkot was exporting to all parts of the British empire including Afghanistan and Egypt and was later selected for supplying surgical instruments for the Allied forces in World War II. The Metal Industries Development Centre (MIDC) was established in 1942 to act as a supply and inspection agency for the Allied forces. Although the surgical instruments manufacturing factories were mostly owned by Hindus, the craftsmen were mostly Muslim and the industry was not affected by the partition of British India. At present, the surgical instruments manufacturing industry in Sialkot is one of the world's largest surgical instruments manufacturing industrial clusters second only to Tuttlingen, Germany. However, the quality of workmanship and raw materials are the issues that have been hindering the progress of this niche industry which is also likely to face increasing pressures from the rapid advances in the field of surgery (e.g., minimally-invasive endoscopic surgery).
According to a myth, the sport goods industry started in Sialkot because an English man broke his tennis racket and, since an immediate replacement was not possible, he asked a local to repair it. The man did a perfect job and the sports goods manufacturing industry took root in Sialkot. Recorded history of the industry goes back to 1895 when the city started becoming famous for its tennis racquets. By 1903, cricket bats were being crafted from imported English willow and exported to different parts of South Asia and beyond. In 1922, a local manufacturer was awarded the British Empire Export Award for supplying footballs to the British Army. Over the years the industry grew to include a variety of wood and leather-based sports equipment, and diversified into related industries such as sports apparel and riding equipment and even the Scottish bagpipes. International collaborations with the well-known sports brands like Adidas (Germany), Puma (Germany), Nike (USA), Dita (UK), Slazenger (UK - owned by Puma now) do exist but the issue of 'child labour' in this, predominantly, manual labour-oriented industry remains a controversial factor which has, sometimes, led to a lost of market share to the new entrants in the sports goods industry in Thailand, Korea and China.
The vast majority of firms in this city are family owned and managed. There are few professionals; firms are staffed by craftsmen who learned their trade by serving as apprentices to other craftsmen. Sialkot has a high degree of exposure to the international economy with entrepreneurs participating in numerous trade fairs abroad and hosting visits of foreign buyers. Even the smallest of exporters is likely to boast of a fax machine and a mobile phone to maintain contact with the outside world. This exposure to the international environment is gradually leading to the realisation that firms will have to become more professional in order to compete favourably in years to come. Issues like ISO 900 certification have led to a realisation that local industry has to spend a greater effort on worker training and quality assurance than what has been done historically.
Firms typically prefer to subcontract rather than make investments in equipment and manpower, which would be necessary for in-house manufacturing. Even among the workers working within the firm, many are piece-rate craftsmen rather than salaried employees. Firms subcontract anywhere from 20% to 80% of their manufacturing to vendors. For instance soccer ball exporters often subcontract upto 90% of their value-added to cottage industries with only material cutting , final testing and packaging being performed in-house.
The preference for subcontracting and piece-rate workers over vertical integration and the development of a loyal workforce is the natural outcome of the fierce entrepreneurial spirit, which is characteristic of the citizens of this city. When asked about his ambitions, a young craftsman stated that " I would like to own my own workshop and become an exporter or maybe get exported[ i.e. migrate ] ". This entrepreneurial spirit results in low company loyalty; not many want to remain as employees in someone else’s organisation. As soon as a person has saved enough to buy the most rudimentary equipment, he wants to get started in exports. Wide spread sub-contracting, strong socio-economic networks of support, and the entrepreneurial spirit in the city results every year in the birth of hundreds of companies such as the Suddle Group described below in the boxed insert.
Sialkot’s industries are in many ways typical of industrial clusters in many parts of the world. Clusters are defined as geographical concentrations of related industries. Growth results from agglomeration effects as specialised skills and services are developed within and attracted from without the cluster. The presence of numerous final firms and multiple sources for ancillary services and inputs results in fierce competition and local rivalries. It also results in pool of specialised manpower, in rapid diffusion of information, and in low barriers to entry due to easy access to the resources within the cluster. As Marshall put it " The mysteries of the trade become no mystery; but are as it were in the air...if one starts a new idea, it is taken up by the others and combined with suggestions of their own; and thus it becomes the source of further new ideas.
