The global textile and garment sector has been in a state of flux since 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.
This study demonstrates how the process of using ICT to help a developing country firm establish a position in the textiles and garments value chain often falls into one of two specific approaches.
The study is organized as follows:
- Section 1 provides a brief overview, including the quota and tariff regime and an introduction to the main trends affecting the supply chain.
Section 2 takes a more in-depth look at the value chain and how it has evolved in recent years.
Section 3 explains what types of ICT are used in the industry, and what barriers exist to uptake.
Section 4 takes a detailed look at the reasons for China’s dominance in the sector, and considers which low-income countries look most vulnerable in the post-quota era.
Section 5 uses Mauritius as a detailed case study to demonstrate how a country whose exports may be under threat from Chinese competition might analyze its position in the industry.
Section 6 draws together the lessons learned about the role of ICT in maintaining and enhancing a competitive textiles and garments sector, using other examples from Cambodia, Thailand and Uganda.
Section 7 provides conclusions.