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close this bookWomen Encounter Technology: Changing Patterns of Employment in the Third World (UNU, 1995, 356 pages)
close this folder5. Changes in textiles
View the document(introductory text...)
View the documentIntroduction
View the documentScope and methodology
View the documentTechnological and organizational developments
View the documentEmpirical evidence from country case studies
View the documentThe experience of Japan and the Asian NIEs
View the documentEmerging issues
View the documentNotes

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.