There is currently a huge window of possibility for southern Asia come create an ext apparel jobs, as climbing wages in China compel buyers come look to other sourcing destinations. Our new report – Stitches to Riches?: Apparel Employment, Trade, and Economic advancement in south Asia – estimates that the an ar could create 1.5 million brand-new apparel jobs, of which half a million would be because that women. And also these tasks would be great for development, because they rental low-skilled workers in huge numbers, carry women into the labor force (which benefits your families and also society), and facilitate expertise spillovers that benefit the economy as a whole.But because that these jobs to be created, our report finds that apparel producer will need to become an ext competitive – chiefly by (i) increase links in between the apparel and textile sectors; (ii) moving into design, marketing, and branding; and also (iii) changing from a concentration on cotton products to consisting of those make from man-made fibers (MMFs) – currently discouraged by high tariffs and import barriers. This suggestions newly drew strong support from panels of academics and representatives from the exclusive sector and government when the report was launched mid-year in Colombo, Delhi, Dhaka, and Islamabad. Southern Asia is now moving on few of these fronts however a lot an ext could it is in done.
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Moving increase the apparel value chainStitches come Riches? find that south Asia’s numerous low-cost job supply provides it extremely price competitive (except for probably Sri Lanka). However rapidly climbing living prices in apparel production hubs, coupled with global scrutiny, are enhancing pressure on producers to progressive wages. Plus, nations like Ethiopia and also Kenya, who reap a comparable cost advantage, room entering the fray, and some East asian countries already pose a large challenge. The great news is that the policy reforms essential to keep the apparel sector competitive would likely benefit other fiddle industries and also transform economic climates (view finish of the blog).Apparel production is arranged in worldwide value chains, i m sorry cover the full range of activities that are required to bring a product indigenous its conception come its finish use. Apparel is a standard example the a buyer-driven worth chain – identified by decentralized, globally dispersed production networks coordinated by lead firms that control the highest possible value activities related to retailing, marketing, branding, and design. Buyers outsource most of the manufacturing process to a an international network of producers in short -income countries.
Figure 1: framework of the global Value Chain for Apparel
Currently, an international buyers space streamlining their sourcing strategies to reduced costs and simplify your supply chain by focusing on big and more capable suppliers who deserve to perform a wider range that activities. In fact, China’s ongoing dominance in apparel is largely as result of its relocate from a cut-and-assemble supplier to a full-package supplier.Some strategic move for southern AsiaIndia has made far-reaching strides in developing backward web links to the textile sector with its missions on cotton and also technical textiles. Plus, the modern technology Upgradation Funds plan (TUFS) provides resources investment assistance for modernizing textile production. However, India has yet come move into MMFs, meaning that apparel exports are concentrated in the spring/summer season, v factories operation for only 6.5 months (versus the worldwide average that 9).Pakistan has been less successful in integrating the apparel and also textile sectors. The did launch a policy similar to TUFS, but results to be mixed, with firms citing implementation issues and also high interest rates. While large firms have tendency to market in-house training, Pakistan lacks a national scheme for training in high value-added activities. It additionally remains heavily concentrated in noodle products.Bangladesh, which specializes in low-value and mid-market price segment apparel, must complete with high attrition and also a absence of an abilities training for employees, forcing producers to hire foreign nationals (who are more expensive) together managers. Plus, there is a lack of upward mobility for women, and a hefty concentration on noodle products.Sri Lanka has actually perhaps developed the most in moving up the value chain. Apparel specific-training institutes provide courses in textile and apparel technology, high quality control, product development, and also merchandizing – and producers have moved into design and retail, launching their own global brands choose Avirate and Amante. Feather ahead, Sri Lanka, which does create MMF products, deserve to position itself together a regional hub to facilitate sourcing for worldwide buyers.Apparel: A an initial step come industrializationHistorically, developing countries have used success in apparel production as a very first step toward industrialization. The suffer gained allows them to development from light manufacturing (apparel, footwear, and toys) to producing an ext sophisticated commodities (plastics, electric machinery, and electric parts) – as illustrated in Kaname Akamatsu’s “flying geese model” (1962) (figure 1.2). Countries like Japan and also the ASEAN 4 begin off production nondurable consumer goods choose apparel and then development to durable consumer goods, and then resources goods of higher value. Economists contend that the apparel sector (along through footwear and textiles) was important in the initial advance of countries like Germany, Japan, Malaysia, the Republic of Korea, Singapore, the united Kingdom, the united States, and much more recently China, Indonesia, Sri Lanka, Thailand, and also Vietnam (Brenton and also Hoppe 2007).
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Figure 1.2: “Flying Geese” version Depicts the procedure of Industrialization for developing Countries
For more information, check out the report.