Saving garment industry

Changes to the garment industry’s business model are threatening the livelihoods of millions of people

COLOMBO – For many years, discussion of the global garment industry has been dominated by the following question: Where were your clothes made, and by whom? But today, there is a more relevant question: How were your clothes made, and by what?

What you wear is going high-tech, whether you know it or not. After decades of labor-intensive production by workers in the Global South, artificial intelligence (AI) and robotics are replacing humans on the factory floor. But, while these shifts will bring new benefits to consumers—such as faster delivery and custom clothing—they will come with costs. Changes to the garment industry’s business model are threatening the livelihoods of millions of people in low- and middle-income countries, and how these economies adapt will have far-reaching implications.

Today, more than half of the world’s textile exports, and about 70 percent of its ready-made apparel exports, come from developing economies. In Asia, some 43 million people are employed in the garment, textile, and footwear industries, with women accounting for three-quarters of the workforce. From China to Bangladesh, textile and apparel manufacturing has facilitated female empowerment and lifted entire generations out of poverty. Simply put, the end of these jobs would be devastating.

But keeping them will not be easy. To understand what businesses in the Global South are up against, consider the competition they face. For example, last year the online retailer Amazon was granted a patent in the United States for an “on demand” apparel manufacturing system that can customize orders and optimize production from anywhere, for less. The company has already won permitting approval for its first production plant, which will be in Norristown, Pennsylvania.

These moves come two years after Amazon announced its own clothing line. And, with futuristic inventions like AI analysis of fashion trends and even a “blended-reality” mirror to dress online shoppers virtually, Amazon’s engagement in—and influence on—the clothing business will only deepen.

In many ways, these innovations will be good for the textile and apparel industry. Not only will they make shopping more fun; they will also increase production efficiency and lower costs. Major brands will eventually be able to respond more quickly to consumer tastes while keeping inventories low and limiting the production of excess clothing. In fact, it may be only a matter of time before high street fashion brands swap the “made in” labels from developing countries for “Made by Amazon Manufacturing Services.”

The trouble is, all of these changes will mean fewer jobs for many people. As factories face closure, communities will lose income and economies will teeter. The question now is what policymakers should do about it.

For many industries, navigating what the World Economic Forum’s Klaus Schwab has called the Fourth Industrial Revolution means regulating technology. But in the textile and apparel trade, that alone will not solve the problem. Instead, the industry must adopt a more human-centric, globally conscious approach to business. New technologies should be evaluated with human costs in mind—measured in terms of lost incomes, shattered livelihoods, and uprooted families.

Moreover, technology companies must do better at collaborating with apparel manufacturers to manage future platforms. As traditional factory jobs evolve, technology-servicing roles will become more important. Just as sewing machines break and need calibration, so, too, will the apparel printers and packaging systems of the future.

Finally, to help ease the transition from manual to modern manufacturing, businesses and governments must begin improving current employees’ tech literacy. If today’s workforces are to remain relevant in the economies of tomorrow, employees will need the skills to contribute.

And yet, to make any of this possible, leaders in developing countries must come to terms with a hard truth: large pools of cheap labor are no longer a strategic advantage in the global economy. Industrial reinvention is urgently needed. Governments should advocate for trade agreements that cushion the impact when manufacturing jobs are lost, while laying the groundwork for the transition to more tech-heavy industries.

From factory floors to government offices, bold measures are needed if the Global South is to remain relevant to the global garment industry. Change is not coming to the world of apparel manufacturing; it is already here.

Heshika Deegahawathura is a business consultant at MAS Holdings, one of South Asia’s largest apparel manufacturing companies