INNOVATIVE MANAGEMENT PRACTICES AND THE STRATEGIC DEVELOPMENT OF SMALL AND MEDIUM-SIZED TEXTILE ENTERPRISES

Abstract

The textile and apparel industry serves as a foundational catalyst for structural transformation in emerging economies, facilitating the transition from agrarian-based production to high-value manufacturing. This research report investigates the role of innovative management practices in the development of Small and Medium Enterprises (SMEs) within Uzbekistan’s textile sector, which has undergone a radical liberalization since 2017. Utilizing the lenses of the Resource-Based View (RBV), Dynamic Capabilities (DCs), and Institutional Theory, the analysis examines how firm-level innovations—including the adoption of Enterprise Resource Planning (ERP) systems, Total Quality Management (TQM), and sustainable "lean-green" production—interact with macro-level government support and the "cluster" organizational model. The research employs a Systematic Literature Review (SLR) methodology, synthesizing data from global scholarly databases and contemporary industrial reports. Findings indicate that Uzbekistan’s transition to a private-led cluster system has achieved 100% internal processing of raw cotton, with textile exports reaching $3.9 billion in 2023. Evidence from case studies such as UzTexGroup and Betlis Tekstil demonstrates that digital workflows and international certifications (e.g., BCI, OEKO-TEX) are critical for entering high-complexity global value chains. However, the study identifies persistent challenges in logistics, specialized human capital, and energy infrastructure. The report concludes with policy implications focused on scaling dual education systems and incentivizing total factor productivity (TFP) to ensure long-term competitiveness in the global market.