Stanford Seed Project Ensures Healthier, Safer Factories
Stanford’s Graduate School of Business recently discussed a Stanford Seed project crafted by economics professor Nick Bloom that examined the impact that teaching better management skills could have on productivity, health, safety and wages in the developing world. Those skills, hopefully, translate to healthier and safer factories.
Bloom described the Dickensian conditions of a textile factory he visited outside Mumbai nearly a decade ago: “rickety stairwells, fire hazards and open machinery whirring at high speeds. Employees often received $5 a day for brutal 12-hour shifts, and accidents were commonplace.”
According to the article, between 2008 and 2010, Bloom and his cohorts performed an experiment among 28 factories in textile hub Tarapur, India. “The research team randomly assigned 14 of the plants to an intervention group that received advice from an on-site consultant for five months and 14 to a control group, left to operate as usual. For follow-up, the team visited all 28 factories every month for more than a year.”
Bloom discovered the “firms that received consulting help cut their product defects by 50 percent, reduced inventory by 20 percent, raised output by 10 percent, hired more workers and had fewer accidents.” The factory Bloom initially visited “became so successful that it opened a second factory and hired 100 additional weavers.”
As the article also points out, multidisciplinary research projects like Bloom’s can go a long way to shaping economic policy and helping NGOs “make better-informed decisions about how to spend direct aid dollars.”
“By looking at the bigger picture, the global research efforts of Seed can more effectively ease poverty and improve lives in the developing world,” the school writes. Bloom confirms the same believes, assuring that research is the key cog in any development.
“There’s no way a company would spend $20 million on an advertising campaign or $100 million on a cashew nut factory without doing any research first,” he said.”