22-11-2012, 05:06 PM
The Global Textile and Garments Industry: The Role of Informati on and Communic ati on Technologies (ICTs) in Exploiti ng the Value Chain
The Global Textile and Garments.pdf (Size: 3.64 MB / Downloads: 168)
Executive Summary
The global textile and garment sector has been in a
state of flux since 1 January 2005, when almost four
decades of restrictions on trade formally came to an
end with the demise of the Multi-Fibre Arrangement
(MFA) quota system. Many developing countries now
face increasing competition and downward pressure
on prices as the global garment industry consolidates
around a relatively small number of winners.
Information and Communication Technology
(ICT) has an important role to play as developing
countries adjust to the new era. First, ICT, as a
general purpose technology, can improve business
practices and increase the efficiency and competitiveness
of developing country firms. Secondly, ICT
is the main driver that shifts value along the value
chain, enabling new business models, disaggregating
production chains, and creating new opportunities
for developing countries in the global supply chain.
These opportunities will derive from the ability of
ICTs to open up parts of the supply chain (other
than basic manufacturing and processing) to
developing countries. This report presents case
studies of companies that have successfully used
ICTs to move, for example, into higher-value
activities such as design and logistics, or to access
niche markets. The case studies demonstrate the
variety of strategies available to developing country
producers. Whereas Chinese manufacturers have
focused on serving major retailers through largescale
production and speed-to-market through an
emphasis on logistics, other examples show
companies elsewhere adopting a strategy of moving
into fashion design and specialized fabrics or raw
materials, or alternatively identifying niche markets
that do not demand large-scale production. ICTs
have been crucial in each case, although the type of
technology needed varies from case to case.
Global Trade in Textiles
and Garments
The global textiles and garments industry forms an
important component of world trade flows,
particularly for some developing and least developed
countries where clothing accounts for a large
proportion of total exports. In 2004, world exports
of textiles were valued at $195bn and of clothing at
$258bn, representing 2.2% and 2.9% respectively of
total world merchandise trade (WTO, 2005).
Developing countries produce half the world’s textile
exports and nearly three-quarters of the world’s
clothing exports (UNCTAD, 2005).
Trade patterns in textiles and garments are similar
although textiles tends to be a capital-intensive
business, while garment-making is labor-intensive
and usually relies on a low-cost workforce. For
textiles, the European Union is the biggest exporter
(if including intra-EU trade), followed by China.
However, India, Turkey, Pakistan, Indonesia,
Thailand and Mexico all rank among the top 15
textile exporters, according to WTO trade statistics.
Overall, Asia accounted for 45.1% of world textiles
exports in 2004. The EU and the US are the biggest
importers of textiles, followed by China, which
needs fabric for its large garments industry.
Jobs and Poverty
Reduction
Measuring employment in the textiles and garments
sectors is difficult because of the large number of
small enterprises and numerous home-workers.
More than 40 million workers are estimated to be
employed directly in the global textile and garment
manufacturing industry, of whom around 19
million are in China. The textiles and garments
sectors account for a very high proportion of total
manufacturing jobs in a number of countries where
poverty-alleviation is a central issue. These include
Cambodia (80.1% of total manufacturing jobs),
Mauritius (72.8%), Sri Lanka (49.2%), Bangladesh
(35%), Pakistan (42.9%), Madagascar (45%),
Turkey (34.3%), Morocco (27.3%), Guatemala
(27.1%), Romania (25.3%), India (21.9%) and
China (18.9%) The fast growth of textiles and
garments manufacturing in Asia and other developing
countries has had a dramatic effect on employment
in the industry in developed countries. The
World Bank and IMF have estimated that barriers to
textile and clothing trade have cost 35 jobs in
developing countries for every job saved in rich
nations (de Jonquieres, 2004). The removal and
reduction of quotas since 1 January 2005 therefore
offers the scope for job creation in poorer countries
which will no longer be restricted by quotas.
Balanced against this, however, are the serious job
losses in those low-income countries whose garments
industries only emerged as an unintended
consequence of the quota system and which are now
suffering factory closures.
Consumer Pressure
Ethical standards and workplace conditions at
supplier factories have become more important
following consumer protests about “sweat shops”
and child labor in the textiles and garments industry.
Prompted in some cases by negative publicity, many
companies now subscribe to Corporate Social
Responsibility programs and Codes of Conduct
which cover their suppliers and subcontractors.
Independent audits are carried out to ensure
compliance on a range of health, safety and environmental
issues. Some developing country suppliers
resent the extra costs that this involves, but large
US and EU buyers are increasingly refusing to place
orders without such systems in place, and there is
some acceptance of a connection between improved
conditions and productivity. International Labour
Office (ILO) involvement, such as in the Better
Factories Cambodia scheme, has helped to give
certain nations a “no-sweat shop” image that has
proven a competitive advantage and attracted
business. Several big name clothing retailers have
now become more pro-active and open over
workforce conditions. Eco-labeling is becoming
more popular with consumers in the US and EU,
and presents a new challenge to developing country
manufacturers. However, these voluntary schemes
too can be used effectively as marketing tools. At the
moment, eco-labels tend to target niche markets,
but it is possible that as public awareness increases
they will present a new barrier—or opportunity—
for manufacturers selling into developed country
markets.1