Enrique Dans
Published in

Enrique Dans

IMAGE: Tero Vesalainen — 123RF

The textile industry: a stitch in time…

The outstanding growth of the textile industry in recent years has largely been due to the availability of cheap labor for what are still fundamentally manual processes. The fast fashion phenomenon, supported by very low unit costs, has speeded up production cycles and changed the industry as we know it: over time, European and North American brands have moved their production to Asia and developed the economies of countries with an abundance of cheap labor, which in turn have progressively raised their production costs.

First Taiwan and South Korea, then Thailand and China, and finally, when those countries also saw their labor costs rise, to Bangladesh, a huge economy of 165 million people with very low average per capita incomes. Between 2000 and 2010, exports of finished textile products from Bangladesh tripled and the industry helped lift millions of people out of extreme poverty. Today in Bangladesh, the textile industry employs more than three million people directly and makes up 81% of the country’s exports.

What we are now seeing is the emergence of two trends: on the one hand, companies like Crystal Group, which manufactures for brands such as H&M, Gap, Uniqlo or Victoria’s Secret, says it won’t be automating and will continue to rely on cheap labor. On the other hand, companies such as Mohammadi Group, a giant that has been diversifying its activity and acquiring increasingly sophisticated machinery, is progressively incorporating robotization and automation. The new robots of textile production are able to take over tasks that until very recently were considered intrinsically human. Companies like Softwear claim to be able to manufacture a shirt in 2.5 minutes, with machines doing 90% of the work and doubling productivity per shift.

What are the likely consequences of the progressive automation of the textile sector? As technology improves, we are going to see change in an industry often criticized for its use of cheap labor, but which at the same time has played a key role in developing many emerging economies. Analysts estimate that Bangladesh needs a further two million jobs to maintain economic growth and that the textile industry has long been the main economic engine capable of generating those jobs. However, according to the World Bank, the pace of job creation has dropped from the approximately 300,000 a year between 2003 and 2010 to around 60,000 a year. That shortfall is due to automation: between 2013 and 2016, exports increased by almost 20%, while employment growth was just 4.5%. At the time, automation reduced workers’ chances of improving their conditions: in the event of conflict, manufacturers simply choose to automate. According to some analysts, if Bangladesh is unable to offer job opportunities to young people, it could face major social unrest.

At the same time, with little need for cheap labor, Western textile brands may well bring manufacturing home, in the process meeting demands for more sophisticated value creation and more focused on proximity, while also improving their logistics models. Amazon’s recent acquisition of Body Labs offers the potential for highly accurate online sizing systems, ushering in affordable, made-to-measure clothes that no longer rely on manual labor.

The textile industry could well be the next laboratory for a future increasingly dominated by machines taking over production processes that until very recently nobody was interested in spending money on automating. Soon, we will see brands incorporating these types of strategy in their production plans, their communication and their corporate social responsibility, with all that this entails: a sector that has not been exempt from change over recent decades, that has seen huge economic empires emerge, and that could undergo huge change in the future, impacting on geopolitics and the global economy. How will fashion labels change? For better or worse, and for whom? Watch this space…

(En español, aquí)

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