Compare this with the global IT market of US$3.6 trillion (this figure takes into account spending on all IT services and hardware), and you appreciate the critical role of fashion designers in innovating to sustain an important sector of the global economy. China has recognised this, with the government investing heavily in shifting the balance from ‘Made in China’ to ‘Designed in China’.
According to some reports, the next big issue for fashion is not China’s economic boom but China’s creativity. Armed with manufacturing skills, talent, deep knowledge of the Western fashion world and economic resources that so many economies have lost over the previous decades this signals a potentially burgeoning area for growth for China and an emerging area for competition against established global fashion centres. Given the importance of the fashion market, what can other economies do to compete?
Do creative clusters make a difference to success?
A cluster is a concentration of skills, talent and knowledge. Physical proximity lends itself to greater interaction, speed, flexibility and quality control. It also contributes to sustainable and ethical business models and practices, allows for succession, the sharing of ideas, knowledge and skills.
We know well the success of creative clusters in fostering innovation in sectors such as IT (e.g. Silicon Valley) and film (Hollywood). Do we have clusters that we can look to in fashion?
The Garment District in New York is a unique creative cluster that many believe drives innovation in the New York fashion scene. The District houses many designers from startups to luminaries, specialist manufacturers and suppliers. The local concentration of talent and resources, diversity of experience and knowledge, and variety in age and size of participants contributes to its success, because it provides an ecosystem that supports new blood that brings in fresh ideas and forces change.
Fresh ideas mean that deeply experienced players are continually innovating so that their skills and knowledge stay relevant in a changing market. The concentration of specialist skills and talent also allows new players to come into the market quickly.
Why do some clusters work and some fail?
A cluster requires an ecosystem with interactions between new and established talents. Newly constructed creative clusters or technology parks may fail if they focus on supporting a monoculture and fail to provide the diversity of experience and talent. This can be seen through the recent demise of regional car manufacturing districts, shipping ports, a number of established clusters in Italy and even legal clusters where some of the largest, established players have collapsed in recent years.
It is the inability of old firms to coexist with new firms and to surround themselves with diverse but complementary businesses that appear critical in destroying a cluster’s viability.
The success of the Garment District as a creative eco-system has been pivotal in shaping the fashion industry in New York. To this day the District accommodates roughly 600 suppliers and factories, or 75 per cent of New York’s fashion industry within one square mile (from approximately West 23rd to 42nd Streets).
Michael Porter, an expert on clusters at Harvard Business School, indicates that:
• physical proximity remains central to competition; and
• the local concentration of specialised suppliers with relationships with production networks around them provides an enduring competitive advantage for clusters over trends towards globalised sourcing and production.
As working conditions improve in low wage economies and as shipping and fuel costs continue to increase, production in New York (read: local production) has become increasingly cost effective, in addition to offering advantages to designers in speed and quality control. Coupled with increasing demand for ethical and sustainable practices, many see these factors as signalling that the garment district is yet to reach its full potential.
Success in the creative economy depends on creative industries that marry creative individuals with business managers and technologists. Government incentives and initiatives can foster innovation but the absence of diversity (new blood, fresh ideas, diverse perspectives) or any of the critical elements of art, science and business can cause a cluster to decline or fail. It could be said that the success of the New York Garment District is that it manages to balance the three crucial factors of art, science and business.