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5. Changes in textiles

Introduction
Scope and methodology
Technological and organizational developments
Empirical evidence from country case studies
The experience of Japan and the Asian NIEs
Emerging issues
Notes

Implications for Asian women

Pavla Jezkova¹

Introduction

This chapter is a summary of a recently completed study by UNIDO which combines inputs from research with commissioned studies covering technology changes in the textile and garment industries worldwide, plus three country surveys followed by seminars in Bangkok and Dhaka.² The study focuses mainly on the impact of changing technologies in the textile and garment sector on the female labour force in Bangladesh, Thailand and Indonesia. References to Asia's newly industrializing and advanced economies, in which the textile and garment industry has already undergone restructuring, provide a longer time perspective for the analysis. The study is one of UNIDO's responses to concerns of developing countries about the future of their textile and clothing industries.

Advanced technology has challenged the producers in developing countries by undermining their cost advantage and presenting them with new parameters of competition. Due to the nature and speed of technological innovations and the accompanying organizational changes, developing countries are finding it more difficult to keep up and the technology gap between the developed and developing countries is increasing. These trends affect not only the direction, composition and volume of international trade in textiles and garments, but also the industrialization process and labour markets at a country and regional level.

A key question for the Asian countries involved is the likely impact of these changes on the size, composition and skill levels of the female labour force. The textile and clothing sector has been one of the most important industrial employers of female labour globally. This has enhanced the social and economic status of women. Since technology has played an important role in the 'demand pull' for female labour in the textile and garment sector, changes in this demand variable are of particular concern to women.

Scope and methodology

Investment in industrial human capital can be an expensive and uncertain proposition, since there is a considerable gestation period before investment benefits can be realized. A longer-term development horizon is necessary to formulate appropriate strategies which could sustain and enhance the potential of the large female labour force which has recently emerged in the textile and garment industry. In order to grasp the present situation and predict what may occur in the future, the textile and garment industries have to be placed in a broader context of industrial development associated with technological and labour market restructuring. Empirical studies of industrial development in the Asian region have identified four development stages (see Table 5.1), characterized by changes in four parameters:

• natural and social resource endowments;
• the level of industrialization;
• technological capabilities and human resources; and
• government policy environment.³

Although the focus of the study is on technology, it is important to view all four parameters as interdependent variables which affect not only the overall industrialization process but also the development of industrial sectors and the position of women within them.

These phases do not inevitably succeed one other, but they can be recognized as common features of industrialization in the more advanced countries in the Asian region. The four-phase model provides a useful analytical tool to be applied to the empirical evidence presented in the study. In terms of their overall level of industrial development, Bangladesh would be in the first phase and Indonesia and Thailand in the second phase, with Thailand on the verge of transition into the third phase. Japan and the newly industrialized economies are in the third and fourth phase.

In the study, technology includes machinery and equipment, know-how or skills, information on new trends, and forms of organization. The role of women is considered in the light of a quantitative and qualitative assessment of women's participation in the production of textiles and garments, including where possible a discussion of the economic and social constraints which have produced gender bias. Due to the lack of data on women's contribution in terms of economic indicators such as productivity or share in the value added, more general indicators such as participation rate, occupational mobility, educational achievements, etc. had to be used.

The impact of new technology which is considered here includes any change in the position of women in the textile and garment industry, both quantitative and qualitative. The indirect impact of technologies in use in other countries on the competitiveness of Asian developing countries is as important as the direct impact from the introduction of new technologies in Asia. The. indirect impact is actually of more immediate relevance for Bangladesh, Indonesia and Thailand.

Table 5.1 Characteristics of four development stages of the textile and garment industry

Technological and organizational developments

Understanding technological transformation requires an assessment of the time sequence of innovations, the degree of their interdependence, the improvements achieved by their introduction, and the cost and employment implications. Technological innovations in the textile and garment branch are reviewed separately, since technological change in the industries differs in character and speed. Organizational changes, on the other hand, generally apply to both branches.

Technological change in the textile industry

Technological changes in the textile industry during the last forty years can be broadly divided into three phases. High-speed spinning frames and looms, with reduced vibration levels, were developed in the 1950s and early 1960s. The most radical alterations in the core technology of spinning and weaving came in the late 1960s and during the 1970s, with the introduction of rotor spinning and shuttleless looms. This was the period when new technology was sought to increase productivity and thereby to combat the cost-based competitiveness of lower wage producers from Asian countries. From the late 1970s onwards, the changes in the textile industry of the developed countries have been characterized by the introduction of microelectronics based technology and the automation of industrial processes.

The new technologies have allowed the various production stages to become one continuous process of interrelated activities, resulting in higher quality and flexibility and thus a faster response to changing market conditions. The full exploitation of these technological improvements is dependent on further complementary changes in organization and management. During the 1990s, rapid response to market conditions is likely to become an even more important force behind technological innovation and is likely to focus on increases in speed and flexibility rather than on cost-cutting.

Investment costs associated with technology improvements in the textile sector have risen considerably. About US $1 billion per year has been invested in the European Union, and twice as much in the USA, throughout the late 1980s and early 1990s. These levels could double in the coming years. The impact of automation on employment has also been significant. During the last 15 years, employment in the textile and clothing industry in the entire EU area has declined by 40 per cent, and the forecast for the 1990s is a loss of 700,000 to I million jobs in the textile sector alone. The occupational structure has also changed, with the proportion of operators and unskilled labourers decreasing while the share of technical and management staff increases. The new technologies require specialized skills in textile engineering, maintenance, design, computer science, and marketing.

Technological change in the garment industry

The pace of technological innovation in the garment industry was slow up to the beginning of the 1980s. The main innovations before 1980 were in sewing technology, with faster and more durable machines and the development of attachments for specialized tasks, which later resulted in the emergence of task-dedicated machines. In the pre-assembly phase the introduction of fast, automated cutters in the late 1970s replaced the operator-driven hydraulic die cutting machine.

The major technological changes occurred in the 1980s, when microelectronics penetrated all stages of garment production to some degree. The most significant innovations took place in the pre-assembly stage, where computer-aided design (CAD), computer numerical control (CNC) cutting systems, and computer-aided manufacturing (CAM) led to material and labour savings. In the assembly stage, which accounts for 80 per cent of the manufacturing value added (MVA) and of the workforce in the industry, technological change has so far been relatively modest. The main improvements have been microelectronic control units which are attached to the standard industrial sewing machine to handle the more complex tasks. These can either be used to speed up production on task dedicated machines or to increase the flexibility of multi-purpose machines. The major technological innovations of the 1990s are likely to build on these developments.

The introduction of computer-based technology has increased the cost of clothing machinery enormously, yet nearly sixty advanced CAD systems are already in Hong Kong, the Republic of Korea and Thailand alone, with over 60 per cent of these having been installed in the last three years.

Organizational changes in textiles and clothing

Organizational changes complement the technological drive towards greater market responsiveness. These changes affect not only production itself, but also the relationship between suppliers and buyers. The emphasis in the organization of production is shifting to a multi-skilled workforce, closer management-workforce cooperation, and increasing reliance on externally supplied industrial services. There is also a tendency towards vertical integration within the textile and garment industry. In the field of buyer-supplier relations, textile producers, garment makers and retailers are working together in design teams. Price is no longer the only important determinant of sourcing: elements such as quality, timely delivery and technical cooperation between buyer and supplier play an increasingly important role. The buyer-supplier relationship is also intensified by the reduced lead time and shortened production runs. This means that close proximity to the markets and availability of efficient international telecommunication and transport networks have become an important competitive factor for the producer countries.

Empirical evidence from country case studies

The following characteristics of the textile and garment sector were identified in the case studies of Bangladesh, Thailand and Indonesia.

Resource endowments - the textile industry

The presence of natural resources - mainly cotton, but in the case of Thailand also silk - was an important initial factor in the emergence of the textile industry in Bangladesh (when it was a part of India), Indonesia and Thailand. In all three countries the development of modern textile manufacturing, especially for export, was based on extensive use of abundant low-cost labour. This factor has made the industry an important source of employment and secured it a competitive advantage in export markets. Bangladesh and Indonesia have retained this relative advantage, but this is no longer the case for Thailand.

In Thailand, local raw material production has not grown sufficiently, and cotton yarn is now imported on a large scale, as well as man-made fibres. The quality of domestic raw silk is also hampering the modernization of handloom production, but joint R&D efforts are being undertaken by the Government and private business to introduce new varieties of raw silk suited to more advanced technology. In Indonesia, local production of man-made fibres has been facilitated by the local availability of oil and timber. While the production of man-made fibres has developed sufficiently to cover most of the textile industry's requirements, most of the raw cotton is imported.

The garments industry

The modem garments industry developed much later than the textile industry in all three countries. At the initial stage of the import substitution period, the industry benefited from upstream linkages with the textile sector in Thailand and Indonesia. In Bangladesh, with no substantial local demand for manufactured garments, the industry was export-driven from the start. Today, Bangladesh and Thailand rely increasingly on imported textiles, because local textile producers are no longer capable of providing the quantity, quality and variety of cloth required for export garments. In Indonesia, local fabric still satisfies almost 80 per cent of the industry's demand.

In all three countries the competitive strength of the garment industry has been built upon a cheap labour force, predominantly women.

The sub-sector's role in manufacturing

In Bangladesh, the textile branch accounts for some 35 per cent of MVA, down from over 50 per cent in the early 1970s. In Thailand and Indonesia (which are further along the path to a modern, diversified manufacturing sector) the textile sector accounted for 11 per cent and 10 per cent of MVA, respectively, at the end of the 1980s. The industry is still one of the largest employers of manufacturing labour in Bangladesh but has been surpassed by other industrial branches in Thailand and Indonesia. Its significance as an export earner has declined in all three countries. In Thailand and Indonesia this can largely be explained by the diversion of output to the local market.

In Bangladesh, textiles continue to be produced largely by traditional cottage industries (the handloom sector) although the pre-liberation period in the early 1960s saw a rapid expansion of integrated mills. Small-scale industries also play a very important role in Indonesia and Thailand (silk production). Indonesian microenterprises have made more technical progress than those in Bangladesh and Thailand. In Thailand, however, improvements in the organization and management of subcontracting have increased the number of home-based silk producers and contributed to the growth of the silk industry. Public ownership of large-scale enterprises is more pronounced in Bangladesh than in Thailand and Indonesia, where local and foreign investment (private or joint ventures) dominate.

The MVA share of the garment industry is quite modest in all three countries: I per cent in Bangladesh, 7 per cent in Thailand, and 1.8 per cent in Indonesia. But the trend is still upwards, and the branch is one of the major contributors to foreign exchange earnings in spite of its low MVA share, especially in Bangladesh. Cheap, mass-produced clothes remain the main export item. In the Indonesian and particularly the Thai garment industries, there is now a trend towards quality products based on local design and diversification. In all three countries, small and medium-size enterprises predominate, often subcontracting for foreign firms which are responsible for high value added, industry-related, services such as design, distribution and marketing.

Technological capabilities in textiles

Overall, technology levels in the textile industry in the three countries have not changed much since the 1960s. Technological stagnation is most evident in Bangladesh. There is as yet no sign of automation in the large-scale mills, and traditional handloom weaving predominates in the informal sector, although semi-automatic Chittaranjan looms have been introduced on a modest scale.

In Thailand and Indonesia, advanced technologies are now being introduced, especially in foreign-owned mills producing synthetic textiles. But these technologies cover only isolated aspects of production, such as spinning. There are as yet no integrated modem mills. Thai producers have partly compensated for the lack of technological progress by better organization and maintenance. Efforts are also being made to modernize the traditional Thai silk industry. In Indonesia, power looms have become common in cottage industries.

In all three countries, there is a traditional female presence in the textile industry, although in Bangladesh women were traditionally confined to yarn processing and excluded from weaving activities. This explains the unusually low share of women in the textile sector in Bangladesh, about 10 per cent compared to about 80 per cent in Thailand. No figures are available for Indonesia, but the rate can be estimated at between 40 and 60 per cent.

Small enterprises and subcontracting are important for female employment in all three countries. The introduction of a semi-automated loom in the traditional handloom sector, and the formation of female cooperatives, have created new employment for women weavers in Bangladesh. But in the 'modern' sector, outdated technology and a heavy reliance on physical strength are real obstacles to increasing female participation. The prevalence of traditional values and strong competition from men in the saturated labour market makes it even harder for women to increase their share.

In Thailand, it is too early to judge the effect of the recent modernization of the traditional silk industry on overall female employment in this sector. It is, however, possible that some of the newly-created opportunities for female factory employment, mostly for young and unmarried women, could be at the expense of women working as subcontractors from their homes. In Indonesia, the available information suggests a decrease in employment opportunities in the traditional weaving sector and in small enterprises as the result of modernization and competition from the modern, large-scale sector. The growth of the modern sector seems to have compensated for this loss so far, but this is unlikely to continue.

Technological capabilities in the garments industry

Technology levels in the garment industry are on the whole relatively low. Most Thai and Indonesian firms still use standard industrial sewing machines, and only the large Thai establishments producing high-quality clothing have introduced computers for design, special sewing operations and inventory control. Garment production in Bangladesh uses simple operator-guided electric machines, although some firms in Export Processing Zones (EPZs) are beginning to use computerized attachments. Local establishments make extensive use of second-hand machinery.

Female employment in the garments industry has grown rapidly, with the demand motivated by the presence of an untapped pool of cheap labour, particularly suited to the nature of production and the low-skill technology. This has in some instances, especially in Bangladesh, been enhanced by a 'supply push', with economic necessity forcing women to sell their labour well below the rate acceptable to men. Widespread subcontracting has facilitated the growth of female employment in Thailand and Indonesia.

Since unsophisticated mass production still predominates in the textile and garment industry, it is not surprising that the issue of human resource development receives relatively little attention in the three countries (although Indonesia does have a textile technology institute and a modest textile/garments training programme). The situation is also slightly better in transnational firms, which are more aware of the increasing importance of skills improvement.

In-plant training is generally confined to simple on-the-job training for new employees by more experienced machine operators. Where more structured training programmes are available, they tend to concentrate on the middle and high level technical and managerial staff. Women tend to be seriously under-represented at these levels, although in Indonesia a relatively large number of women occupy middle or high-level positions in the garments industry. This is primarily explained by their well-established role in traditional garment making.

The trend towards diversification and higher value-added products which is associated with technology improvements results in skill polarization. This tends to marginalize women in quantitative and qualitative terms: they are in danger not only of losing jobs, but also of being excluded from operations requiring new skills. These tendencies are not so strongly apparent as in the newly industrializing economies (NlEs), but they can be observed in the garment EPZ of Bangladesh, in the textile and garment industries in Thailand, and in the textile industry in Indonesia. No statistical documentation is available as yet, as these trends have been masked by the increase in the absolute number of employees, both men and women.

Policies in textiles

Import substitution policies formed the basis of the modern textile industry in all three countries. After Bangladesh became independent in 1972, there was a policy shift away from promoting large mills to traditional handloom production, in an attempt to cope with the serious unemployment problem. Also in Indonesia, conscious labour market policies favoured labour-intensive technologies to create much needed employment opportunities.

By the end of the 1970s, export promotion became a major focus of government policies for the industry in all three countries. The background for these policies was the need to increase foreign exchange earnings and to capitalize on opportunities arising from the textile industry relocation strategies of producers in the developed countries and the NIEs. Foreign investors have been attracted by favourable legislation and/or the provision of special facilities (such as the Bangladesh EPZ). Serious attempts to let domestic industries benefit from technology transfer connected to private foreign investment seem to have been made only in Indonesia.

The export promotion drive in all three countries stimulated the demand for cheap female labour, and the supply was increased by the decline of rural job opportunities. The result is a heavy predominance of women in the textile industry in Thailand and Indonesia. In Bangladesh, the number of women in the industry has not grown as rapidly. Men have retained their traditionally predominant role, partly because backward technologies require considerable physical strength and also because of lack of alternative employment opportunities. In addition, labour regulations allowing women to do only work which is 'appropriate to women' leave considerable scope for discrimination in hiring practices, which are still heavily influenced by traditional sociocultural values. The adherence to values which confine women to traditional roles and sanction the gender division of labour affect not only the employers' attitudes but also women's perception of themselves. This is also the case in Indonesia.

Policies in garment manufacturing

Policies for garment manufacturing in Bangladesh have been linked to the export promotion drive from the start, whereas in Indonesia and to some extent Thailand, import substitution provided the original impetus for the industry. In stimulating garment (and textile) manufacturing, the governments have exploited the international relocation and restructuring trends which resulted from technological change and increasing wage levels in the industrialized countries. The Multi-Fibre Arrangement (MFA) and Generalised System of Preferences (GSP) have facilitated an easier access to markets in developed countries for all three countries. In addition, a trade agreement with the USA in 1971 provided Thai garment manufacturers with very favourable export conditions.

It is clear that export promotion of the garment industry has created new possibilities for female industrial employment, which has grown much faster than in the textile industry, especially in Bangladesh. There is also little doubt that the growth of the industry has been built upon the dexterity, easy subordination and low wages of the female labour force. Although the governments in all three countries recognize the present and still untapped potential role of women in industry there are few signs of any significant measures to improve the qualitative aspects of the female labour force. The literacy rates and education levels of women are still well below those of men, and so is women's access to relevant technical and managerial training. Also, special rules covering working conditions for women are neither observed nor endorsed. They are often used not for the benefit of women workers, but to their disadvantage.

The experience of Japan and the Asian NIEs

The industries of the Asian NIEs have clearly left the low-wage, labor-intensive phase behind and are moving to technology-intensive manufacturing, with the attendant need for highly skilled human resources. Japan is already one step further, at the 'brain intensive' stage of development, marked by the predominance of activities based on knowledge and information taking place outside the manufacturing sector. The trend away from manufacturing towards services is already visible in the NIEs, with increasing employment in the service sector, including activities previously classified within the manufacturing sector. These activities represent highly productive inputs into the production system and have very little, if anything, in common with the traditional notion of services as low-skill, low-production activities.

The textile industry is rapidly becoming marginalized in the process, although a 'hard core' of highly sophisticated textile firms will no doubt remain. The declining share of female labour in the textile industry is indicative of changes in skill requirements, for which women seem to be less prepared than men. The textile branch is thus becoming of relatively small importance as a supplier of female jobs. Skill upgrading or diversification of the female workforce is needed if their share in the textile labour force is to be maintained.

In the garment industry, slower progress in automation has been compensated for by organizational changes and the introduction of computerized management systems. These changes have had little impact on the composition of the garment labour force, which remains overwhelmingly female. While this situation is unlikely to change in the near future, there is a longer-term need for skill improvement and diversification, in view of the industry's need to respond to changes in demand and to anticipated changes in technology.

Women can be seen to be moving into services or into the growth industries. Services would generally be the domain of those with better educational levels, which are definitely rising. In the new growth sectors and branches, women are still predominantly found at the lower occupational levels. An increase can be detected among the higher ranks of professionals, but the numbers involved remain small. A new group of generally better-skilled marginal workers also seems to be emerging: home workers and subcontractors who are dependent on information-intensive activities. The most vulnerable group is older married women doing unskilled work: their skill/education levels being too low to be of much use in the rapidly-changing economy.

The educational and training systems are responding with varying means and degrees of success in the individual economies. But women are still a minority of the students in the subjects that matter, particularly with regard to the skills and knowledge needed in manufacturing. The evidence about specific training for textiles and clothing in Hong Kong and the Republic of Korea suggests that although women's representation in some of the courses is quite impressive, their representation in the subjects required for higher technical and managerial posts remains very low.

Women appear to be better represented in education and training for services. Seen in the broader perspective of a shift towards service-dominated economies, the situation is therefore not altogether unfavourable for women, even if they have to cope with other obstacles, such as biased hiring practices, which have not been discussed here. However, there is a need to further increase the participation of women in the relevant types of education and training, while paying particular attention to those female workers in low-skill positions who are likely to be marginalized in the process.

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