This study explored the survival strategies of apparel manufacturing in a high-wage developed economy using “Made in Ireland” as a case study. Based on a statistical analysis of 4,000 apparel items for sale in the retail market from January 2018 to December 2021, the study found that:
First, unlike the conventional views like the factor proportion trade theory and the global value chain theory, the study’s results showed that garment manufacturing did NOT disappear in Ireland as a high-wage developed country. Notably, garments “Made in Ireland” demonstrated many unique attributes, such as:
- statistically more likely to target luxury and high-end markets than foreign-made apparel imported into Ireland;
- statistically more likely to highlight their Irish cultural heritage and mention keywords such as “traditional,” “centuries-old,” “craftsmanship,” and “historical” in the product description;
- statistically more likely to focus on manufacturing specific product categories with a world reputation, including jumpers and kilts;
- statistically less likely to be seen in categories with an abundant supply from lower-cost imports, such as bottoms;
In other words, economic theories need to incorporate non-price competition factors and better explain the development patterns of a country’s garment sector, particularly in developed economies.
Second, the findings called for a rethink of the strategies supporting the garment-manufacturing sector in a high-wage developed country. Current industry practices and government policies aiming to promote garment manufacturing in a developed country primarily focus on implementing protectionist trade measures (i.e., restricting imports) or investing in modern technologies like automation. However, the study’s findings suggested new approaches. For example, using disaggregated product data at the Stock Keeping Unit (SKU) level, the study indicated that a substantial portion of garments “Made in Ireland” was sold overseas. Thus, promoting exports instead of curbing imports could be a more effective way of expanding garment production in a high-wage developed country.
On the other hand, the popularity of “Made in Ireland” jumpers and kilts in the world marketplace suggested that garment manufacturers in a high-wage developed country could survive their business by leveraging cultural heritage, history, and traditional craftsmanship instead of fancy new technologies. Likewise, to a certain extent, the value of maintaining garment manufacturing in a high-wage developed country in the 21st Century may not necessarily be about replacing imports, improving “speed to market,” or creating jobs but preserving a country’s unique cultural heritage and history.
Third, the study’s findings revealed the challenges facing garment manufacturers in a high-wage developed country like Ireland. For example, garments “Made in Ireland” were more likely to be sold with a discount, implying their price competition with foreign-made imports might not be entirely avoidable despite all the efforts from targeting the niche markets to differentiating product assortments.
On the other hand, garments “Made in Ireland” often targeted the high-end market, requiring the workforce to obtain demanding skills such as advanced sewing, craftsmanship, and a deep understanding of the Irish culture. However, the aging workforce and the shortage of skilled labor, a common problem facing developed countries, could also prevent the expansion of apparel manufacturing in Ireland in the long run. Thus, prompting the traditional Irish culture and apparel production craftsmanship, especially to attract the young generation to garment factories and be willing to pursue a career there, would be critical for sustaining the garment manufacturing sector in Ireland and other high-wage developed countries.
Ireland has a long history of making garments, and specific categories of apparel “Made in Ireland” are famous worldwide, such as jumpers and kilts. As of 2020 (i.e., the latest data available), about 340 garment factories still operate in Ireland, a notable increase from 293 in 2010 (Eurostat, 2022). Meanwhile, the output of Ireland’s apparel manufacturing sector totaled $68 million in 2020 (measured in value-added), a substantial drop from $142 million ten years ago (Eurostat, 2022).
Meanwhile, export was critical in supporting apparel “Made in Ireland” today. Statistics show that Ireland’s apparel exports totaled $270 million in 2019 before the pandemic, down about 19% from 2005 (UNComtrade). However, over that period, Ireland’s apparel exports to most developed countries enjoyed positive growth, such as Spain (up 151%), the Netherlands (up 4.5%), Germany (up 14.5%), France (up 61.6%), and Japan (up 20.2%). Further, Ireland’s top four largest apparel export markets were all developed Western EU countries (UNComtrade, 2022). Geographic proximity and the specific product structure of Ireland’s apparel exports could be important factors behind these distinct export patterns.
by Miriam Keegan (FASH MS student, Fulbright-EPA scholar) and Sheng Lu
Full paper: Keegan, M. & Lu, S. (2023). Can garment production survive in a developed economy in the 21st century? A study of “Made in Ireland”. Research Journal of Textile and Apparel. (ahead of print) https://doi.org/10.1108/RJTA-09-2022-0113