Information and Communication Technology (ICT) has an important role to play as developing countries adjust to the new era. These opportunities will derive from the ability of ICTs to open up parts of the supply chain (other than basic manufacturing and processing) to developing countries. This report presents case studies of companies that have successfully used ICTs to move, for example, into higher-value activities such as design and logistics, or to access niche markets.

The global textile and garment sector has been in a state of flux since 1 January 2005, when almost four decades of restrictions on trade formally came to an end with the demise of the Multi-Fibre Arrangement (MFA) quota system. Many developing countries now face increasing competition and downward pressure on prices as the global garment industry consolidates around a relatively small number of winners.

Information and Communication Technology (ICT) has an important role to play as developing countries adjust to the new era. First, ICT, as a general purpose technology, can improve business practices and increase the efficiency and competitiveness of developing country firms. Secondly, ICT is the main driver that shifts value along the value chain, enabling new business models, disaggregating production chains, and creating new opportunities for developing countries in the global supply chain.

These opportunities will derive from the ability of ICTs to open up parts of the supply chain (other than basic manufacturing and processing) to developing countries. This report presents case studies of companies that have successfully used ICTs to move, for example, into higher-value activities such as design and logistics, or to access niche markets. The case studies demonstrate the variety of strategies available to developing country producers. Whereas Chinese manufacturers have focused on serving major retailers through large scale production and speed-to-market through an emphasis on logistics, other examples show companies elsewhere adopting a strategy of moving into fashion design and specialized fabrics or raw materials, or alternatively identifying niche markets that do not demand large-scale production. ICTs have been crucial in each case, although the type of technology needed varies from case to case.

Yet technology alone will not provide the answers for struggling garment makers in developing countries. A suitable business environment, adequate infrastructure, and indeed a fundamental comparative advantage are also required. If an ICT-enhanced textile and garments sector is to be an effective component of a developing country's poverty-alleviation strategy, then the following broad questions must first be addressed by both policymakers and private investors considering their post-MFA strategies:

• What is the right position to seek in a sector increasingly dominated by a very large scale exporter, China, and what role might ICT have in such a strategy?
• What aspects of the wider enabling environment must be in place before investment in ICT for development makes sense?
• What are all the factors, including ICT investment, which cause value to migrate along the global supply chain?
• To what extent are the opportunities offered by ICT in the textile industry limited (or promoted) by natural and historical factors in specific countries?

This sectoral report seeks to use the textile and garments industry to demonstrate the type of analysis needed for a realistic strategy for ICT-enabled growth in any sector. Core tasks include understanding the sector's existing global value chain; assessing a country's potential competitiveness as value shifts along the chain; and highlighting any obstacles to growth in the countrys domestic economic structure. This list includes tasks for the private sector and for policy makers. Particular aspects of the broader enabling environment will be important for competitiveness at each stage of the textile and garments value chain, including: