COMING BACK? Capability and Precarity in UK Textiles and Apparel
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COMING BACK? Capability and Precarity in UK Textiles and Apparel Julie Froud, Steven Hayes, Hua Wei and Karel Williams Alliance Manchester Business School & School of Materials, University of Manchester March 2017 COMING BACK? Capability & Precarity in UK Textiles & Apparel COMING BACK? Capability and Precarity in UK Textiles and Apparel A report funded by the British Cotton Growers’ Association Work People’s Collection Fund University of Manchester | Alliance Manchester Business School and School of Materials 1 COMING BACK? Capability & Precarity in UK Textiles & Apparel Contents Executive Summary………………………………………………………………………………………………………………7 Chapter 1 The UK textile and apparel industry: background and current context ................. 10 1.1 Introduction............................................................................................................................ 10 1.2 Like British manufacturing (only worse) ................................................................................ 12 1.3 Understanding heterogeneity and theorising sustainability ................................................. 20 Chapter 2 Different national stories: German reinvention and Italian resistance ................. 28 2.1 Introduction............................................................................................................................ 28 2.2 British textiles & apparel (worse than German or Italian textiles & apparel) ....................... 29 2.3 German reinvention: adding technik ..................................................................................... 33 2.4 Italian resistance: internalising low wage production ........................................................... 36 2.5 Replicable success? ................................................................................................................ 40 Chapter 3 Capabilities and co-ordination in British carpets ................................................. 43 3.1 Introduction............................................................................................................................ 43 3.2 The UK carpet industry: a sub-sector with a core of larger firms .......................................... 44 3.3 Building and co-ordinating marketing and productive capabilities ....................................... 49 3.4 Implications ........................................................................................................................... 56 Chapter 4 Sustainability in a low density cluster in West Yorkshire woollens and worsteds 58 4.1 Introduction............................................................................................................................ 58 4.2 The ecology of woollens and worsted production: a low density cluster ............................. 60 4.2.1 Mapping the cluster ........................................................................................................... 60 4.2.2 The legacy of decline – a low density cluster ...................................................................... 64 4.3 Understanding sustainability in a low density cluster .......................................................... 69 4.3.1 Productive capabilities underpin high end, high value and heritage products .................. 69 4.3.2 Marketing capabilities and price premia ............................................................................ 71 4.3.3 Supportive capital allows productive and marketing capabilities to be renewed ............ 77 4.4 Implications: sustaining the cluster ....................................................................................... 79 University of Manchester | Alliance Manchester Business School and School of Materials 2 COMING BACK? Capability & Precarity in UK Textiles & Apparel Chapter 5 UK apparel: precarity by default.......................................................................... 82 5.1 Introduction............................................................................................................................ 82 5.2 Conditions of precarity .......................................................................................................... 83 5.2.1 The UK apparel market – rising demand and falling prices ................................................ 84 5.2.2 The vanishing middle market and the disinterested consumer ........................................ 88 5.3 Conditions of survival: achieving gateway marketing capabilities ........................................ 92 5.3.1Sustainability through aligning capabilities ......................................................................... 92 5.3.2 Precarious struggle with inadequate capabilities ............................................................... 94 5.3.3 Seeking sustainability by developing missing capabilities ................................................. 96 5.4. The challenges to (and possibilities for) sustainability ........................................................ 97 5.4.1 Challenge 1: the supply chain is a block on ‘Made in Britain’ ............................................. 97 5.4.2 Challenge 2: limited capabilities inside the firms and few resources outside .................. 100 5.4.3 Experiments in strengthening the infrastructure ............................................................. 102 Chapter 6 Revaluing the mundane: industrial policy for textiles and apparel ..................... 104 6.1 Two concepts of industrial policy......................................................................................... 104 6.2 Industrial policy rediscovered .............................................................................................. 105 6.3 Textiles sector policy for jobs ............................................................................................... 108 6.4 Conditions of sustainability for sub-sectors ......................................................................... 110 6.5 Conclusion ............................................................................................................................ 115 Appendix 1 Notes on key definitions and data sources ............................................................. 117 Appendix 2 Interview list ............................................................................................................ 121 Appendix 3 Cluster comparison between West Yorkshire, UK; Oberfranken; Germany and Toscana, Italy .............................................................................................................................. 123 Appendix 4 Financial performance of selected woollens and worsted cluster firms with turnover (£) and pre-tax profit margin (%) ................................................................................ 124 Appendix 5 Comparison between textiles and apparel on number of firms, turnover, aGVA and total employment, 1995-2014. .................................................................................................. 125 Appendix 6 The geographic concentration of apparel production .......................................... 126 Appendix 7 Marks and Spencer: from ’90% of our goods are British made’ to ‘Best of British’ University of Manchester | Alliance Manchester Business School and School of Materials 3 COMING BACK? Capability & Precarity in UK Textiles & Apparel Appendix 8 Top 25 Clothing exporters and importers in the world in 2014 ............................. 129 Appendix 9 Concentration of apparel manufacturing: UK, Germany, Italy, Spain, Portugal, Romania, Bulgaria, Poland and Turkey ...................................................................................... 130 Appendix 10 Company profiles for Chapter 5………………………… ................................................ 133 University of Manchester | Alliance Manchester Business School and School of Materials 4 COMING BACK? Capability & Precarity in UK Textiles & Apparel List of Figures and tables Figure 1.1 Total net capital expenditure as a percentage of turnover: a comparison of the UK economy, manufacturing textiles and apparel………………………………………………………………………13 Figure 1.2 Average Weekly Earnings* (not seasonally adjusted**): textiles & apparel compared to other manufacturing divisions 2000-2016…………………………………………………………………………14 Figure 1.3 Greater Manchester skill levels in low pay sectors………….……………………………………….5 Figure 1.4 Textile industry* and total manufacturing output** 1948-2015 (seasonally adjusted*** 2012=100)……………………………………………………………………….…………………………………16 Figure 1.5 Index of production of the UK textiles and apparel industry 1997-2015………..……….16 Figure 1.6 UK T&A industry employee jobs 1978-2015 (yearly average, including full-time & part-time), in thousands……………………………………………………………………………………………….………..17 Table 1.1 Size distribution of UK manufacturing establishments…………………………………………….18 Table 1.2 Size distribution of UK textile and apparel firms, 1998 and 2015…………………………….19 Table 1.3 Size distribution of UK textile and apparel firms, respectively, 2015……………………….19 Table 1.4 What’s in the UK textile and apparel industry in 2014………………………………….………….21 Table 1.5 Alignment of conditions for sustainable cost recovery in UK textiles and apparel……24 Figure 2.1 UK, Germany and Italy Textiles industry output 1995-2011……………………………………29 Figure 2.2 European textile and apparel output in 2012 ………………………………………………….…….30 Figure 2.3 UK, Germany and Italy Textile Export Real Value, 1975-2013 (Million US$)……….…..31 Figure 2.4 Investment