Introduction

The global textile industry is a vibrant, dynamic sector that has continually adapted to economic, technological, and societal shifts. At the heart of this evolution is the migration of production hubs, driven by factors like labour costs, trade policies, and technological advancements. This article examines the historical and ongoing industrial transfer in the textile sector, regional dynamics, and the trends shaping its future.

The Industrial Migration in the Textile Sector: Past and Present

1. The 20th Century Shift: From Europe and North America to Asia

During the early 20th century, Europe and North America dominated the textile industry:

• The U.S. textile sector peaked in the 1940s, employing over 2 million workers and contributing significantly to industrial growth. Textile hubs like Manchester in the UK and North Carolina in the U.S. were pivotal in supplying domestic and international markets.
• Rising labour costs, stricter regulations, and the globalization of trade led to the first wave of industrial migration in the 1960s and 1970s. Production moved to Japan, Hong Kong, and later to South Korea and Taiwan, where labour was cheaper and governments offered incentives.

2. The Rise of China and South Asia

By the 1990s, China emerged as the "world’s factory":

• Government investments of over $15 billion in textile parks and infrastructure catalyzed this shift.
• Between 2000 and 2010, China accounted for 50% of global textile exports, with its labour-intensive sector employing over 20 million workers.
• Simultaneously, Bangladesh and India became major hubs, offering ultra-low labour costs and benefitting from favourable trade agreements like the Generalized System of Preferences (GSP).

3. The Shift from China to Southeast Asia and Africa

Since the 2010s, rising wages in China (an average monthly wage of $150 in 2005 to $975 in 2023) and environmental regulations have prompted companies to relocate production:

• Vietnam, Cambodia, and Indonesia have seen substantial growth, with Vietnam’s textile exports reaching $38 billion in 2022.
• In Africa, Ethiopia has become a growing hub, attracting $2 billion in FDI over the past decade. The government has created industrial parks like Hawassa, housing 20+ factories, to boost its textile exports.

Quantitative Analysis of Industrial Transfer

Capital and Factory Relocations

• Between 2000 and 2020, over 25,000 textile factories closed in Europe and North America, with approximately $120 billion in production investment redirected to Asia.
• Vietnam, for instance, has received nearly $5 billion in FDI for textiles since 2015, driven by the EU-Vietnam Free Trade Agreement.

Labor Dynamics

• In 2022, 75% of the world’s garment workers were located in Asia, with Bangladesh employing 4.5 million workers in its garment sector alone.
• Ethiopia’s garment workers earn an average monthly wage of $26, significantly lower than the $200-$300 typical in Southeast Asia, making it attractive for new investments.

Factors Driving Industrial Transfer

1. Labor Costs

Low wages remain a primary driver. For example:

• The cost of producing a T-shirt in Bangladesh is 40% lower than in Vietnam and 90% lower than in the U.S.

2. Trade Agreements

Countries with preferential trade agreements often attract investment:

• Bangladesh benefits from duty-free access to the EU under the Everything But Arms (EBA) initiative.
• Mexico leverages the USMCA agreement to export textiles to the U.S. with minimal tariffs.

3. Infrastructure and Policy Support

• China’s textile industry boomed due to large-scale investments in industrial zones and efficient logistics networks.
• Ethiopia’s government provides tax breaks and duty-free import of machinery to attract textile manufacturers.

4. Environmental and Social Concerns

• Stricter environmental regulations in developed countries have pushed textile production to regions with more lenient policies.
• However, growing global awareness is pressuring even low-cost hubs to adopt sustainable practices.

Future Trends in Industrial Transfer

1. Continued Diversification

• Africa and South Asia are likely to see more investments due to their young labour force and untapped potential.
• The Middle East is also positioning itself as a key player, with Turkey and Egypt focusing on high-value textiles.

2. Automation Mitigating Labour Costs

• Automation in textiles, including robotic cutting and sewing, is reducing reliance on low-cost labour.
• For instance, China is investing in automation that could reduce textile production costs by 30% by 2030, potentially reversing the need for relocation.

3. Sustainability Driving Localization

• The push for sustainability is encouraging reshoring and nearshoring in Europe and North America.
• Brands like Patagonia and Levi’s are exploring circular production models, which may limit the need for long, global supply chains.

4. Emerging Mega-Hubs

• Countries like Kenya, Morocco, and Myanmar are poised to become key textile hubs due to strategic location, low wages, and government incentives.

Conclusion

The textile industry’s history is one of constant evolution, driven by the need to adapt to economic, technological, and environmental changes. The industrial transfer from Europe and North America to Asia has defined the past few decades, but the future holds even more complex dynamics. With automation, sustainability, and shifting consumer preferences shaping the landscape, the industry will continue to diversify geographically while embracing innovation. For businesses and policymakers, understanding these shifts and adapting to them will be key to thriving in this ever-changing sector.