Positive and Negative Attributes of Globalization on Textile and Apparel Sector - Research Paper Example

Globalization Executive summary Evidently, globalization has served to shape the business environment as a whole. Apparently, in the textile and apparel sector it has served to both improve the terms of business and at the same time impacted the industry negatively. On that point, the subsequent sections of this text will strive to highlight the globalization concept and also document the positive and negative attributes of the same. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Impacts of the globalization and the apparel firms in the world 5 Challenges faced by textile and the apparel firms as a result of globalization 7 Environment abuses occurring in the production and distribution of textile and apparel goods: 9 Conclusion 9 Reference 10 Table of figures Export sector Figure 1 5 Figure 2 6 Figure 3 7 Introduction Essentially, globalization can be defined as an exchange of economic activities between people, companies, and governments of different nations (Black, 2002). Apparently, these economic activities include trade, which requires investment and the help of technology. Evidently, globalization needs the support of the political machinery in different countries. Notably, since it impacts the general environment and culture in different countries, the processes of trade affect culture and the processes themselves get affected by culture and adapt (Bonacich, 1998). Furthermore, globalization increases competition and adds to the quality of goods and services produced in a country (particularly less developed countries) (Lechner, 2012). Evidently, globalization has been present for a great deal of time Moreover, with the advent of technology, specially in the fields of communication, a great amount of mutuality now exists in terms of financial dependency and economic trade (Rein, 2012).It is importat to note that there is a lot of speculation regaridng globalization recently. On that point, the growth rate of international trade which was rapid, has diminished in the past few years, especially with global economies going into recessions (Bonacich, 1998). However, globalization is still in the running and growing phase. In the past investments and technology innovations were moving from the Developed countries to the Developing or Less Developed countries (Lechner, 2012). However, that is a thing of the past now. Emerging markets are taking over the role in innovation and investments worldwide. For instance, Apple’s chief rival is not a European or even Japanese company, but South Korea’s Samsung (Arnett, 2004). Impacts of the globalization and the apparel firms in the world Apparently, it is worth noting that as the textiles industry developed in China and Japan, China began exporting textiles and is now the leading exporter in the world. Notably, globalization has altered the competition in the world, which is further fuelled by economic reforms unique to its own country (Lechner, 2012). Although, globalization aims to enhance effeciency in production through technology, this has given rise to many problems in the textile industry (Arnett, 2004). On the contrary, the major problems are poor economic conditions coupled with lack of proper infratructure to implement these technologies. Evidently, the two main impacts of Globalization in the textile industry have been lean retailing and product proliferation. On that note, lean Retailing is a concept where organizations refuse to carry inventory and expect the manufacturers to provide stock on demand. On the other hand, product Proliferation is the marketing of the same product in different varitians such as size color or uses (Rein, 2012). Figure 1 Consequently, this encourages mass production. Therefore, globalization has removed trade barriers and regulations by several countries and liberalized policies across borders. In Western Europe, England’s Industrial revolution was kicked off with textile production and now France and Italy have been juxtapositioned as the Fashion capitals of the world (Bonacich, 1998). However, there has been a distinct shift in the pattern of textile trading (Lechner, 2012). As the Western European production fell, and is expected to fall further, manufacturing activites shifted, and will further shift, to developing countries with a cheap labor wage. Germany, Italy, France, UK and Belgium total textile exports have fallen from 242% in 1991 to 13.6% in 2000 (Arnett, 2004). During the same period, China and India’s textile exports have increased dramatically (Rein, 2012). Moreover, the textile trade between Mexico and USA increased from $71 million in 1991 to approximately $ 8200 million in 2000, 115 higher than Mexicos earlier exports to USA. In the last twenty years, textile production has increased by 3.6% p.a in Asia, compared to Developed Western Nations increase of only 0.2% p.a (Black, 2002). Figure 2 However, with globalization came unemployment in Europe and USA and ssizeable employment gains in Asia and other Developing countries. International Labour Office in a new report says that “this has been accompanied by a parallel shift of production from the formal to the informal sector in many countries with generally negative consequences on wage levels and conditions of work.” (Arnett, 2004) .The total employment in the Textiles and associated sector is approximately 23.6 million all over the world, with 5.3 million workers in China (increase of 2 million since 1980) (Black, 2002) .Moreover, critics on globalization argue that globalization undermines the cultural integrity of other cultures and, is therefore, repressive, exploitative and harmful to most people in most places (Lechner, 2012). Essentially, another result of Globalization was the creation of NAFTA or North American Free Trade Agreement. This further ate into the US domestic firms with cheaper influx of goods from Mexico. Figure 3 Challenges faced by textile and the apparel firms as a result of globalization Evidently, globalization has served to impact the textile and the apparel firms and consequently, the industry as a whole. On that point, some of the challenges faced are documented as follows. First and foremost, lack of infrastructure has plated a huge role in the undermining of the industry. On that point, with most of textile exports coming from Less Developed countries to Developed Countries, there is pressure for these firms to provide products with a certain quality standard and benchmark. (Arnett, 2004) This poses a unique challenge due to poor infrastructural situation in the country of operation. Furthermore, financial constraints are other factors hindering the development of the textile industry. More often than not, the issues require these firms to continue replenish stocks more than once in a single season. On the same note, this required heavy investment in production which is not always available in less developed countries (Arnett, 2004). Moreover, in order to achieve desired profitability, firms must operate in mass production to produce economies of scale (Bonacich, 1998). Notably, there is also a requirement to invest heavily in proper machinery and move away from labor incentive production. Thirdly, the import and export surplus also possess a huge threat to the industry. On the same point, it is clear that most producers face the problem of surplus clothing which is often rejected by European and American shops and due to cheaper products available by other countries such as China and Indonesia. In simple terms, all these are a direct result of globalization in the textiles industry (Rein, 2012). Futhermore, regulations by countries that are importing the textile and apparel products has served to undermine the industry. Apparently, with the changing dynamics and power in the hands of Exporters, the importers may impose regulations on imports which may include increasing taxes and tarrifs in order to boost in-home production. In addition to the above mentioned challenges, even US apparel industry faces important challenges with the amount of imported garments in the domestic market, which keeps increasing year on year. In order to promote development in under developed country while safeguarding its domestic market, “the U.S. government has negotiated a variety of trade agreements extending preferential treatment, including duty- and quota-free access to the U.S. market for apparel and other textile products manufactured in developing countries in the Caribbean Basin, sub-Saharan Africa, and the Andean region” (Rein, 2012) Moreover, it including certain provisions, which granted China admission in the World Trade Organization, and hence China benifited form the project. Environment abuses occurring in the production and distribution of textile and apparel goods: Apparently, many environmental issues exist in the textile industry. On that note, a huge quantity of wastewater and air pollution is emitted because of textile production (Bonacich, 1998). Evidently, even during the production process, a considerable amount of energy, water and other resources are used to produce these textiles (Lechner, 2012). Moreover, due to lack of proper infrastructure and Governments ability to invest in environment well-being thus a lot of production facilities in the textiles are not as environmentally friendly as desired. In addition, equipment are old and newer ones a generally quite expensive to purchase (Rein, 2012). On the other hand, due to the sound pollution occurring by the use of heavy machineries, there is a lot of disruption in nearby communities (Lechner, 2012). In contradiction, the textile industry employs unskilled labors who are not really qualified to ensure that production is efficient and hence it leads to wastage or utilizing additional resources for production. Notably, the Resource Conservation and Recovery Act of 1976 provide certain regulations for the disposal and use of hazardous materials and other wastage that may occur during production (Arnett, 2004). Moreover, the classification of what constitutes hazardous materials, its storage period and technique and disposal are all under the above mentioned regulation. Conclusion In summation, globalization as a concept is profitable endeavor in the textile and the apparel industry. Notably, it has increased the quality of goods and services worldwide with open markets and competitiveness (Lechner, 2012). Moreover, the exchange of technologies is adding to cost effectiveness and better utilization of resources (Rein, 2012). On that point, it is evident that the textile and apparel industry has been challenged by the age old system of productions and competitive environment. Notably, globalization has come in handy in trying to address these issues (Black, 2002). Though there are many challenges facing textile and apparel firms, the firms that can quickly innovated and understood that consumer behavior paramount and thus need to satisfy the interest (Arnett, 2004). However, in their efforts to be cost effective and efficient, firms should not put into consideration a number of facts for instance the customer needs, the quality of the product among other factors. To this end, it is important to appreciate the role of globalization in the development and expansion of the sector. Reference Rein, S. (2012) .The end of Cheap China. Hoboken, NJ: John Wiley & Sons ISBN 978-1-118-17206-3 Lechner, F.J. & Boli, J. (Eds.). (2012). The Globalization reader, (4th Ed.). West Sussex, UK Wiley-Blackwell ISBN 978-0-470-65563-4 Arnett, J.J. (2002). The psychology of globalization. American Psychologist 57 (10), 774-783 Rees, K., & Hathcote, J. (2004). The U.S. textile and apparel industry in the age of globalization. Global Economy Journal, 4(1), 1-22) Bonacich, E. (1998). Latino immigrant workers in the Los Angeles apparel industry. New Political Science, 20(4), 459-473. Black, S., Brainerd, E., (2002) Importing Equality? The Impact of Globalization on Gender Discrimination. The national Bureau of Economic Research Google Books. (2003, June 21). Google Books. Retrieved March 17, 2014, from http://books.google.com/books?hl=en&lr=&id=xU-_P5GB3noC&oi=fnd&pg=PA23&dq=globalization+challenges+textile+and+apparel+firms&ots=ZCYPCORFUc&sig=Hj9hll720z6nBqYnwJVOr1dPLP4#v=onepage&q=globalization%20challenges%20textile%20and%20apparel%20firms&f=false World. (2005, January 24). World Globalization Isnt Dead Its Only Just Beginning Comments. 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