Exploring economics: the secret life of t-shirts
Exploring economics: the secret life of t-shirts

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Exploring economics: the secret life of t-shirts

3.2 Which countries benefit the most from t-shirt production?

The complexity of the global supply chain also entails that different countries and economic actors face different benefits from such transactions. You are now going to explore these differences in more detail.

Activity 20

Which countries are associated with low valued added operation? Put these countries in order of low value added (First) to high value added (Sixth).

Using the following two lists, match each numbered item with the correct letter.

  1. India

  2. Bangladesh

  3. Vietnam

  4. France

  5. USA

  6. Germany

  • a.Second

  • b.Fourth

  • c.Sixth

  • d.Fifth

  • e.Third

  • f.First

The correct answers are:
  • 1 = f
  • 2 = a
  • 3 = e
  • 4 = b
  • 5 = d
  • 6 = c

Can we account for this spread of countries among low value added and high value added operations? Why are some of the operations of t-shirt supply, notably those which add the least value, carried out in countries such as Bangladesh and Vietnam? The answer needs us to look back at the transformation process firms use in different stages of production

Labour intensive or capital intensive techniques in the production of t-shirts: how and where?

Activity 21

Right back at the beginning of this course a distinction was made between labour intensive production techniques such as fruit picking and capital intensive production such as car production. Do you think the t-shirt industry will be labour or capital intensive?

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Cotton farming may be either labour or capital intensive. While in the US technology is a feature of cotton farming, in countries like India cotton farming more often employs labour intensive techniques. The stages that follow in the supply chain are also likely to be labour intensive. Garment production tends to take place in factories with many workers. Where production is labour intensive the cost of labour is an important factor in the overall cost of production.

DD126_2

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