Global Value Chains in Apparel: Still a Path for Industrial Development?

Publication Type: 
Page Numbers: 
222-239
Total Pages: 
18
Month/Season: 
Published On: 
2015

Industrial development and export diversification into higher value added products and away from primary commodities remains a major development objective for low-income countries (LICs). Several industries have played an important role in this process. This chapter discusses the specific case of the apparel sector (often also referred to as garment or clothing sector) in the contemporary context of global value chains (GVCs). 1 The apparel sector has traditionally been a gateway to export diversification for LICs and is generally regarded as a first step for developing countries embarking on an export-oriented industrialisation process (Gereffi, 1999). In most developed countries and newly industrialised economies (NIEs), it was central in the industrialisation process (Dickerson, 1999). Historically, this was the case in the UK, the USA, Germany, Japan, and in the NIEs of Hong Kong, Taiwan and South Korea. More recent cases are Malaysia, Thailand, Indonesia, Sri Lanka, China, Vietnam, Bangladesh, Cambodia and Mauritius. Given its low entry barriers (low fixed costs and relatively simple technology) and its labour-intensive nature, the apparel sector absorbed large numbers of unskilled, mostly female, workers and provided upgrading opportunities into higher value added activities within and across sectors, most importantly textiles. Hence, apparel sector development can have important short-term effects by providing employment, incomes and foreign exchange and long-term effects by furthering export diversification, industrial development and linkages to other sectors.