Are You Falling Behind?

elebrating technical development with the

Textile World
Innovation Award provides an opportunity to observe the highest level of technology in a
global textile industry.

US-based investment in technology is another matter. Business Week recently reported that many
US factories are falling behind, saying: “It becomes a vicious cycle. With few prospects for big
returns, it’s hard for many manufacturers to justify money for new equipment. That, of course,
means they’re hamstrung as they try to lift productivity, which makes them an even poorer prospect
for further investment.” And with regard to investments made overseas: “Fact is, as fast as
American factories have improved productivity and cut costs, foreign competitors in Asia and Europe
have charged ahead even faster.”

Whether or not you believe it is fair to criticize US manufacturing’s capital investment
challenge without pointing to trade fairness issues, it is clear that improvements in technology,
innovation and investments are happening globally. Textiles continues to evolve as an essential
manufacturing industry and as the engine of economic growth for many developing countries.

With the US shake-out of so many plants, the challenge remains to focus on the future. That
focus must move past the promise of significant policy changes from the US government and stake a
claim in the future of textiles.

Easier said than done? You bet. But for US firms, little choice remains. Focus on the niches,
chase value-added, rationalize operations, scratch out a margin any way possible, and don’t forget
to take seriously new demands on sales and marketing. Yes, the industry needs to learn new ways to
reach its customers.

US textile manufacturers don’t deserve a kick in the teeth, but few critics want to hear the
problems the industry has faced in recent years. As Business Week states: “[M]any manufacturers
shifted to an end-game strategy in the second half of the 1990s. Rightly or wrongly, they skimped
on capital spending and innovation, assessing that the payoff just wasn’t there. Between 1995 and
2001, when the most recent data [end], the stock of equipment and software used by manufacturers
increased by only 19 percent. That’s far smaller than the 43-percent increase in the rest of the
private sector. And while manufacturers spent $109 billion of their own funds on research and
development in 2001, some 67 percent of that was in high tech, pharmaceuticals, medical equipment,
or autos. On average, other manufacturing industries devoted less than 2 percent of domestic sales
to R&D.” That is not an impressive view of domestic manufacturers, and it begs the question: Is
your company falling behind?

There is a passion and a will in the US textile industry to move forward — to find a way into
the future. It is impossible to cut your way to growth — or cut your way to innovation. And
innovation is key to success — and key to survival.