Structural change: The dominant feature in the economic development of the German textile and clothing industries

The textile and clothing industries are good examples to analyse emerging industrial trends in international co‐operation and to map the globalisation effects on outward processing, jobs and technology. The research focuses on the development of economic indicators and is based on the results from consulting and research projects, as well from enquiries in the German textile and clothing industries, which are exposed to intensive cost competition and trying to find a new position within the process of globalisation. A reduction of demand, a change in consumption patterns, the modification in the retailing system, the development of personal income and a global shift of production have triggered the decline of the domestic production of textiles and clothing. Emerging producers from eastern, developing and newly industrialising countries are now the main suppliers for the German textiles and clothing market. The German clothing companies defend a rest market and use intensively the outward processing in low‐wage countries. As a result of the tremendous differences in production costs, the demand for clothing textiles shifted globally towards low‐cost places of clothing production. The outward processing from industrialised countries established a very efficient, well‐organised global production network in low‐wage countries, enabling new potential for economic development. This research focuses on the view of producers in industrialised countries. The analysis shows that the future of textiles and clothing companies is not in producing but in the management of markets, organising a global supply chain of subcontractors and in retailing. The experiences within the global outward processing network shows very high innovation and learning rates in low‐wage countries, enabling a serious potential towards a self‐contained economic development. The economic and social liberalisation within the EU region and the out‐phasing of the WTO in 2005 will give new power to the globalisation process and will influence the structural change of industry. This paper is written as a rational position sensing of the German textile and clothing industries prior to the out phasing of the WTO regulations and the 2005 liberalisation of the EU textile and clothing sector.