A glocality perspective towards valorizing textile circular economy: unravelling the challenges and coping mechanisms

Designing a sustainable textile circular economy (CE) calls for an efficient and effective valorization of post-consumer used textiles and clothing (T&C) (Dissanayake and Pal, 2023). In recent decades, the global trade volume of post-consumer T&C has made an unprecedented rise and is predicted to increase from US$ 96bn in 2021 to US$ 218bn by 2026 (Dissanayake and Pal, 2023). European Environment Agency’s Circularity Metrics Lab estimates that the exports from the European Union (EU) has nearly doubled since 2005, with around 1.4 million tonnes annually since 2015, and most exports going to Africa and Asia (Circular Metrics Lab, 2025).

While, on the one hand, the increase in production, consumption and disposal of fast fashion products implies a promising trade growth of post-consumer T&C from global north (GN) to the global south (GS), a rising criticism is in terms of the social and environmental impacts, specifically for the waste generation and exports of low-value textile waste to GS (Ekenga et al., 2018), often termed as “waste dumping”. Embedded within such dispersed reverse supply chains for post-consumer T&C are global fashion retailers playing a significant role for closing the loop as well as non-profit organizations, multinational sorting companies, traders and recyclers around the world. Joined through a complex industrial network spanning GN and GS, these actors valorize post-consumer T&C through various R-principles such as reuse, repurpose and recycle.

A GN-south (GNS) structure of the post-consumer T&C industry is motivated in particular by industrial systems thinking and the possibilities to drive out suboptimizations that otherwise occur in the various embedded circular supply chains. Economies of scale and economies of scope are here the main decisive factors, given that the post-consumer T&C industry is characterized by price-sensitive competition and extensive use of manual labour for conducting reverse logistics operations. Used T&C trade between GN and GS is particularly valuable due to its considerably high unit price (compared to other globally traded used materials such as paper, metals or plastics). In addition, used T&C trade has the potential to find a new resale market in GS, thus extending the garment use life and indirectly reducing the environmental impacts of virgin textile production and its consumption (Dissanayake and Pal, 2023). As a result, the industry has always been a global “system of provision”, stretching GN to GS. To further strengthen textile CE in and as a global industry, a number of international trade initiatives are launched by various multi-lateral organizations, such as UNIDO, ILO and ITC. Despite the socio-economic impacts of global post-consumer T&C industry via job creation, growth of informal sector and social welfare – key indicators of just transition (Dissanayake and Pal, 2025), currently stricter trade policies such as waste shipment regulations and Basel Convention have put the global value creation under coerce.

Far from the global efforts, we have in recent years seen emerging local (or regional) perspectives on value creation, in particular in the GN as a result of “bottom-up” innovations. For instance, locally oriented circular business models have grown rapidly, faster than the fashion industry as a whole. We also see that in GN, significant progresses and investments are made in technologies such as automatic sorting and recycling to further boost local and regional value chains. Hand-in-hand with these efforts, there is an ongoing massive drafting of textile CE policy packages, for example, the European Commission is currently planning, drafting or revising legislations related to Extended Producer Responsibility, Eco-design for Sustainable Products Regulation, among others. These initiatives aim to keep the post-consumer T&C and boost valorization, within the EU border. Recently, McKinsey (2022) reported that a within-EU textile-to-textile recycling industry can be economically viable to create 15,000 new jobs by 2030. However, despite these ongoing innovations and impending regulations, GN lacks capacity and cost-effective solutions to valorize the entire volume of post-consumer T&C generated in Europe. Zooming in on the recycling of textile waste and subsequent manufacturing operations, this part of the global supply chain tends to be highly localized or regionalized, predominantly in GS. In fact, these operations are often conducted in geographically consolidated locations in GS, where related and complementary companies along a value chain of a specific industry sector operate. Panipat is one of world’s largest geographical clusters in textile recycling and is also known as the “cast-off capital” because of being the global centre for recycling textiles.

Keeping in mind these two views, of GNS and GN-GS, this perspective paper argues that solution for designing a textile CE lies not in taking a “weight-balance” approach but in integrating the prevailing global as well as local interests, i.e. a glocal perspective on value creation is needed. Such a perspective comes with potential dilemmas given global and local configurations are poles asunder when organizing supply chain structures, engaging actors, establishing governance mechanisms and navigating policy landscapes, yet they can yield new opportunities for enhanced value creation if managed appropriately.

Based on insights gained from our previous research, we, first, outline two fundamental archetypes of glocality challenges that hinder valorization potential in the post-consumer T&C industry: paradoxical and consolidation challenges, each arising at both value chain and policy levels, and, second, comprehend two archetypes of coping mechanisms (Figure 1). Table 1 provides an illustrative example of each archetype, and accordingly we prescribe wider research questions that seek attention.

Paradoxical challenges arise when local (or regional) and global value creation interests oppose and compete with each other. Typically a relatively small value gain from one results in a larger value loss in the other. Thus, a “plus–minus” relationship exists that hampers an optimal value creation of the entire system. It may be caused by opportunistic behaviour among the post-consumer T&C industry actors often due to lack of actual knowledge and understanding of global value creation processes, i.e. individual actors may act “in good faith” without understanding the negative implications globally.

Consolidation challenges are characterized by the simultaneous, mutual loss of global and local value creation, i.e. a “minus–minus” situation is present where both global and local interests suffer from limited alignment. It could arise due to a number of reasons, such as lack of transparency, information sharing and systems thinking, which results in a limited overview and unnecessary costs for involved actors and limited long-term planning. Alternatively, individual actors in the supply chains may be aware of the opportunities for improved value creation, but do not have the capacity and/or power to exploit the opportunities observed.

Orchestration mechanisms in glocal value chains can manage paradoxes and systematic consolidation, where the “minuses” can be removed to improve alignment. A number of orchestration “tools” need critical investigation; for instance, it is important to explore how can emerging technologies, such as digital platforms and electronic marketplaces, be effectively leveraged to improve coordination, control, visibility and joint visioning among supply chain actors. What role do supply chains and service intermediaries play in bridging the supply chain and data gaps between locally oriented businesses and global operators, and how can this be optimized for improved information sharing and decision-making? Further exploration is also needed to understand the impact of design science research interventions on resource pooling and sharing of necessary competencies and knowledge for better seizing of glocal value creation opportunities. We raise the grand question to the interested researcher pool: How to orchestrate glocal post-consumer used T&C value chains in order to manage and mitigate the paradoxes and misalignments and effectivize textile CE?

Harmonization mechanisms at the policy level revolve around the coordination of regulations and facilitation of trade, by removing barriers, and standardization in conjunction with policy design requirements (Barrie et al., 2022). Policy harmonization can create level playing ground for the value chain actors through increased collaboration within and across supply chains to foster improved win-win opportunities and, in addition, holds a key to facilitate many of the strategies at the value chain level, not the least in conjunction with digitalization, where support of various investments is needed (e.g. McKinsey, 2022), but also in physical infrastructure such as automatic sorting facilities. Policy harmonization can be facilitated via new collaborative forums to enhance alignment glocally within the T&C industry and also horizontally. Other specific instruments include revising harmonized shipping codes for used textiles to add more granular segregation between rewearable, recyclable and waste textiles. Policy study is particularly crucial for designing appropriate instruments that can enable eco- and safe-design, market surveillance mechanisms, among others. Overall, of crucial importance for harmonization is to understand how textile policy frameworks through operational target setting, eco-innovation, shared governance and cost coverage can drive more inclusive and sustainable transition of textile CE. We provide a critical question for deeper investigation: How to enable policy harmonization for integrating GN and GS within one ecosystem boundary?

In conclusion, this perspective paper argues on the need for establishing immediate research coverage on glocal supply chain design, focusing on more adaptive organization and configuration of circular value chains – that is of critical essence to reduce the circularity divide (Barrie et al., 2022). We perceive two principal glocality challenges predominantly arising at both value chain and policy levels due to conflict and misalignment of different operating systems, a local one, wherein GN and GS are decoupled, versus a global one, where GNS acts as coupled links. The outlining of the two coping mechanisms to embrace as concisely illustrated with a “bird’s-eye” view, acknowledge a co-opetitive mode of operation, that is competitive coexistence of global and local (glocal) instead of a “winner-takes-it-all” ballgame. Varying degrees of hybrid global-local configurations along the value chain and among policy landscapes are deemed existentially crucial (Burini et al., 2025) and goes beyond a static view of circular supply chains and taking a transformative – a more adaptive and integrated – perspective as proposed by Wieland (2020). South-South and Triangular Industrial Cooperation (UNIDO, 2025) and equivalent collaborative approaches can enable stakeholders in the GN and GS share knowledge, technology, skills and resources, fostering mutual growth in an equitable manner. Thus, in this perspective paper, we raise pertinent questions (and not necessarily describe them all) in need of further research that is of relevance to drive practice and generate policy attention to facilitate a systems thinking addressing the glocality challenges.

We deem that this perspective would bring valuable contribution to CE researchers who are working, or are interested in studying the circular transition of the global textile industry. In addition, the conceptual framework of glocality challenges and coping mechanisms proposed in the paper holds broader relevance for other industrial contexts that share similar configuration and structure as the textile industry and thus is of scientific implication for other CE researchers as well. We further deem that our perspective paper can entice more research on understanding global-local (glocal) supply chain configurations and dichotomies from multi-disciplinary perspectives, such as supply chain strategies, economic geography, resource conservation and CE, organizational sustainability and business models.

The authors would like to thank the Kamprad Family Foundation (Project no. 2020-0105) and Formas (Swedish Research Council for Sustainable Development, Project no. 2022-02222) for funding the extensive research which led to the conception of this perspective. During the research the authors have bounced the idea with various researchers, circular textile value chain actors and multi-lateral organizations such as the International Trade Center (ITC) promoting textile CE cross-border, and their invaluable inputs are highly appreciated.