Information and Communication Technology (ICT) has animportant role to play as developing countries adjust to the new era. Theseopportunities will derive from the ability of ICTs to open up parts of thesupply chain (other than basic manufacturing and processing) to developingcountries. This report presents case studies of companies that havesuccessfully used ICTs to move, for example, into higher-value activities suchas design and logistics, or to access niche markets.


The global textile and garment sector has been in a state offlux since 1 January 2005, when almost four decades of restrictions on tradeformally came to an end with the demise of the Multi-Fibre Arrangement (MFA)quota system. Many developing countries now face increasing competition anddownward pressure on prices as the global garment industry consolidates arounda relatively small number of winners.


Information and Communication Technology (ICT) has animportant role to play as developing countries adjust to the new era. First,ICT, as a general purpose technology, can improve business practices and increasethe efficiency and competitiveness of developing country firms. Secondly, ICT isthe main driver that shifts value along the value chain, enabling new businessmodels, disaggregating production chains, and creating new opportunities fordeveloping countries in the global supply chain.


These opportunities will derive from the ability of ICTs toopen up parts of the supply chain (other than basic manufacturing andprocessing) to developing countries. This report presents case studies ofcompanies that have successfully used ICTs to move, for example, into higher-valueactivities such as design and logistics, or to access niche markets. The casestudies 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, otherexamples show companies elsewhere adopting a strategy of moving into fashiondesign and specialized fabrics or raw materials, or alternatively identifyingniche markets that do not demand large-scale production. ICTs have been crucialin each case, although the type of technology needed varies from case to case.


Yet technology alone will not provide the answers forstruggling garment makers in developing countries. A suitable businessenvironment, adequate infrastructure, and indeed a fundamental comparativeadvantage are also required. If an ICT-enhanced textile and garments sector isto be an effective component of a developing country's poverty-alleviationstrategy, then the following broad questions must first be addressed by both policymakersand private investors considering their post-MFA strategies:


  • What is the right position to seek in a sector increasingly dominated by a very large scale exporter, China, and what role might ICT have in such a strategy?
  • What aspects of the wider enabling environment must be in place before investment in ICT for development makes sense?
  • What are all the factors, including ICT investment, which cause value to migrate along the global supply chain?
  • To what extent are the opportunities offered by ICT in the textile industry limited (or promoted) by natural and historical factors in specific countries?


This sectoral report seeks to use the textile and garmentsindustry to demonstrate the type of analysis needed for a realistic strategyfor ICT-enabled growth in any sector. Core tasks include understanding the sector'sexisting global value chain; assessing a country's potential competitiveness asvalue shifts along the chain; and highlighting any obstacles to growth in thecountrys domestic economic structure. This list includes tasks for the privatesector and for policy makers. Particular aspects of the broader enablingenvironment will be important for competitiveness at each stage of the textileand garments value chain, including:


 

  • Infrastructure-roads, ports, and airports, as well as telecoms and other ICT investments.
  • Policy and regulation, such as cost of access to telecoms and the internet, competition policy, banking regulations, customs clearance rules.
  • Relevant business management skills, including the ability to restructure business models and reengineer firms.
  • Other skills, sufficiently widely available that employers can hire the workers who will be needed to implement ICT-based strategies.
  • Information flows that determine patterns of trade and market access, including historical and personal links as well as officially mediated trade contacts.



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© 2008 The International Bank for Reconstruction and Development, &sec=article&uinfo=<%=server.URLEncode(1846)%>" target="_blank">The World Bank, Washington DC


An &sec=article&uinfo=<%=server.URLEncode(1846)%>" target="_blank">infoDev publication prepared by: Enlightenment Economics, Edited by: Kerry McNamara (infoDev), June 2008.


About infoDev


infoDev is global development financing program among international development agencies, coordinated and served by an expert Secretariat housed at the World Bank Group, one of its key donors and founders. It acts as a neutral convener of dialogue, and as a coordinator of joint action among bilateral and multilateral donors-supporting global sharing of information on ICT for development (ICT4D), and helping to reduce duplication of efforts and investments. infoDev also forms partnerships with public and private-sector organizations who are innovators in the field of ICT4D. The infoDev Secretariat is housed in the Global ICT Department (GICT) of the World Bank Group.