HUMAN CAPITAL DEVELOPMENT AND TECHNOLOGICAL INNOVATION AS DRIVERS OF PRODUCTIVITY GROWTH IN THE TEXTILE INDUSTRY: EVIDENCE FROM UZBEKISTAN

Аннотация

Uzbekistan’s textile industry has grown rapidly since the cotton sector reforms of 2017, yet it remains unclear whether this growth has been driven mainly by the expansion of capacity and employment or by rising productivity. This study assesses the contribution of labour productivity to output growth in the industry between 2017 and 2025 and examines the role of human capital development and technological innovation in this process. The research used secondary data from industry, national and international sources on physical output by product group, employment, exports, education, digital skills and innovation. Output per employee was calculated for five product groups, and output growth was decomposed into employment and productivity components. The results show that employment increased 3.31 times, from about 188,000 to 623,000 people, while garment output rose 7.65 times and knitted fabric output 5.11 times. Productivity growth accounted for 41.1% of the growth in garment output and 26.6% in knitted fabric, whereas output of yarn and processed cotton fibre per employee declined. Export value per employee fell by 39.6% between 2018 and 2025. Higher education coverage increased from 10.6% to 47.7%, and the country rose from 93rd to 77th place in the Global Innovation Index, but research and development spending remained at 0.1% of GDP and basic digital skills remained limited. The findings indicate that growth has been predominantly extensive, with productivity gains concentrated in downstream segments. The article argues that sustaining growth requires shifting from capacity expansion to the joint development of industry-relevant skills, management practices and process innovation.