The quick and the dead
Australian designers are among the most enthusiastic exporters in the world. But domestically its speed to market that defines the good, the bad and the ugly, as Tim Harcourt discovers.
Speed is a key competitive advantage for Australia's Textile, Clothing and Footwear (TCF) industries, according to Professor Roy Green, the chair of the Federal Government's industry inquiry into the sector.
In an exclusive interview with your correspondent, Green was upbeat about the industry's prospects despite competitive pressures in the global economy affecting many TCF businesses in Australia.
"Developed countries like Australia can't compete in the commoditised TCF markets of developing countries, instead our sources of competitive advantage are knowledge, quality and rapid response," he explained.
Green used two local examples to make his point. In the footwear industry, developing countries used "low cost, routinised mass production", while Australia has the advantage of "flexible specialisation and mass customisation", he said. This meant a company like Robins in Western Sydney, which markets its products under Sandler, Easy Step and Widestep brands, "can act flexibly and react quickly to customer needs much quicker than there low cost, mass produced rival".
Robins has been designing, manufacturing and producing footwear in Australia for more than 100 years and has concentrated its production arm in the suburb of Belmore. An investment in technologically advanced plant equipment, extensive program of workforce training and development and 'quick response' manufacturing systems means it has developed a strategy of quick response and self-sufficiency. Something its international competitors have yet to encroach upon.
Green also noted: "Industry players like [David Jones womenswear buyer] David Bush constantly tell me that they want five to six bites of the cherry not one, and only Australian players - not Chinese factories - can provide those services in that time."
This is perhaps one of the key reasons the department store has long maintained its strategy as the "home of designer brands", enlisting local dynamos such as Alex Perry, Kirrily Johnston, Collette Dinnigan, Sass & Bide, Willow, Ginger & Smart and Akira Isogawa.
Support for Professor Green's optimistic view about Australian TCF's strategic future come in the form of two eminent economists in the US.
Professor Jagdish Bhagwati of Columbia University has talked about the natural "division of labour" in the international trade where developed countries concentrate on quality and innovation in high value sectors whilst the developing world accesses mass production. Bhagwati pointed out in the Financial Times recently, that this global movement of the TCF trade is not new: "...as with Japan in the 1930s, when $1 blouses flooded the world, India and China today are growing and exporting rapidly."
In essence, the future of Australian fashion lies not in the proliferation of mass market goods but in the emphasis on innovation and the development of expert capabilities.
The second academic in tune with Professor Green is Professor Michael Porter of the Harvard Business School. Porter's theory of comparative advantage shows that global supply chains' proximity to customers and the quality of the relationships forged matters most in developed countries. So for Australia, proximity, quality, constant innovation and speed is the key to the economic success of our fashion industries.
It may well be that, according to Porter, the power of proximity will be more important than the tyranny of distance when it comes to TCF competitiveness.
However, despite Professor Green's optimism that Australia has the right strategy for TCF, he is concerned about the need for the local industry to be more aware of ethical, environmental and labour standards in production and distribution. Professor Green predicts that Australian industry must develop world class ethical, environmental and labour standards in its products as those conditions will be the main source of competitive advantage in the future.
"We've seen with Hugo Boss' boycott of wool involving sheep mulesing that ethical standards matter a lot to consumers. This is just the tip of the iceberg," he said.
By Tim Harcourt