Introducing energy efficient technologies in small- and medium-sized enterprises in the apparel industry: A case study of Sri Lanka

Abstract

The energy cost contributes to a significant percentage of the total operational cost of the apparel industry. The energy cost of Sri Lanka, which is higher compared to most of the competitors, hence would make the country less price-competitive. While large apparel manufacturing companies have implemented the introduction of energy-efficient technologies at a relatively early stage, while small- and medium-sized enterprises (SMEs) are still experiencing various barriers and obstacles, due to lack of finance, knowledge, technology and motivation. This paper analyses the factors that influence the diffusion of energy-efficiency technologies in the apparel industry. We conducted a survey study of the current situation of SMEs in Sri Lanka and analysed the opportunities and challenges in the diffusion of energy-efficient technologies. Based on the empirical findings, we propose a new framework for facilitating improved access to information and finance, which will require close collaboration among various stakeholders including SMEs, industry associations, financial institutions, universities, and energy service companies. The proposed framework will eliminate information and finance barriers for the diffusion of energy-efficient technologies in SMEs in the apparel industry in Sri Lanka.