Textile industry in Taiwan seems to have declined recently. According to the “Overview of Textile Industry in Taiwan in 2019”, which was released by the Taiwan Textile Federation in June, 2020, points out that the gross production from 2005 to 2019 decline 27.7%. The data is from the bureau of statistics, minister of economics.
|Industry \ Year||2005||2010||2015||2019|
Besides, the export of textile and textile products have also declined, as shown in Figure 2.
Facing this decline, the government provided some policies to support the development of the textile industry. For example, in 2019, the industrial development bureau in the ministry of economics organized three projects related to the textile industry, which were executed by the Taiwan Textile Research Institute (TTRI). These three projects are focused on smart manufacturing, integrated resources to optimize the industry development, and branding and technology transfer, respectively.
However, how much effect these policies can make? Or a further question might be “When the textile industry in both Taiwan and local industry cluster get decline, what does it mean?” This article will focus on the textile industry in Hemei Zhan (Township, “鎮”) in Changhua county, whose ‘manufacture of textile products” is the 1st highest (in NT$ 6.8 billion) in total values of production per year in Taiwan, and “weaving of textiles” is the 2nd highest (in NT$ 8 billion). Based on the case study, this article aims to provide a framework to organize the literature and point out the issue behind the decline.
To review papers discussing about the textile industry in Hemei Zhan, a short search query is used. Google scholar is selected to search journal papers, while National Digital Library of Theses and Dissertations in Taiwan (NDLTD) is used to collect the theses and dissertations.
The searching query contains two parts, which are Hemei (location), and textile or weaving (industry), in both Chinese and English. The exact query is as follows: (“和美” or “Hemei”) and (“紡織” or “textile” or “織布” or “weaving” or “weave”).
To filter the literature, two steps of selection is applied,
First, Select by title: the title of the article should contain the following 3 topics:
Category: economic development (in a board sense)
Industry: textile industry cluster
Location: in Hemei Zhan
Some of the article seems to relate to these 3 topics, but the keywords are not appeared in the title. In such cases, they were selected, and examined in the 2nd step
Second, Select by abstract: The abstract of the articles filtered from the 1st step are all read and decide if the content is related to the 3 topics mentioned above.
The result of the literature is shows in Table 2.
Table 2 Searching result of the literature review
|Result of the searching query||206||639|
|Candidate after 1st step||23||13|
|Selected article after 2nd step||5||7|
After excluding 4 overlapping articles, 8 articles are chosen. To figure a general understanding of the literature related to this topic, the articles are analyzed by time, category, and research method, a brief scan of each article are also conducted below.
In figure 3, it is obvious that most of the publication is around 2000, only 1 article published in 2014. However, the categories of these article are not converged, they are spread from sociology, geography, management, and cultural study (figure 4). There are 5 for the articles use qualitative research method, 2 articles use quantitative method, and 1 article used both.
To provide a brief scan, the literatures are separated to 3 parts as follows,
- Cluster quantitative research (2 articles): from the management
- Qualitative research in industry view (3 articles): from the management, geography, and sociology
- Qualitative research in society view (3 articles): from the sociology and cultural study
In Lei, Han-Sheng, and Chin-Hua Huang ‘s work, questionnaires are introduced to answer “the mechanisms underlying the competitive advantage of clusters described by Porter (1990).” (Lei and Huang, p.862, 2014) And this paper points “the degree of networking does play a mediating role between geographic cluster and competitive advantage” (Lei and Huang, p.852, 2014), and also “both degree of networking and betweenness position are conducive to the pursuit of competitive advantage.” (Lei and Huang, p.852, 2014)
In Wen-Chi Hung’s work, the thesis pointed out the relationship between the networking ties and other variables, like firms’ quality, flexibility, delivery capability, cost reduction, etc. However, the characteristic of the textile cluster in Hemei Zhan is not well studied in this work. (Wen-Chi Hung: 2002)
Based on the idea of industrial restructuring, Wang, Qiong-Zu’s work discussed about how the textile industry in Hemei Zhan facing the changing global economic. It indicated that in 1960s, with the support from the policy and the US aid, the textile industry starts to soar. In 1970s, Taiwan was in the Top 4 for exporting textile product.
However, after 1980s, the textile industry in Hemei get to decline due to the loss of young employee, and also the challenge from China and Southeast Asia. Facing this challenge, most of the firms are not invest aboard, but choice to close the factory, update the equipment, changing producing network, and recruit immigrant labor. The author claimed that is because most of the firms are small and medium enterprises (SME), which are relative hard to invest oversea.
While some factories decide to close due to the lack of capital, or the president of the firms are relative old, and prefer not to make changes, some of the firms successfully upgrade machines, and produce more products with higher quality. No matter which results the firms get in, the author concludes the tie between the families, local society and the factories are get loosen. (Wang, Qiong-Zu: 2000)
In Chuagu feng chia’s work, both case interview and structure interview by phone are used, which is the only one use both qualitative and quantitative research method in this literature. Focus on the investment point of view, this thesis indicates the reasons why the firms in textile industry in Hemei Zhan want to invest aboard are due to the reducing labor cost, accessing textile raw material, utilizing old machine, relative low environment regulation. And the geographic proximity and the language issue are also get concerned during choosing the countries for offshore. (Chuagu feng chia: 2003)
In Team and Boss, Chieh-Hsuan Chen indicates the decline of the textile industry in Hemei Zhan is due to the firms didn’t catch the mainstream of the development of both the nation and the textile industry. However, since this argument is used as supporting the main discussion about the team and boss in the SMEs context in Taiwan, the author didn’t provide evidence to support this idea. (Chieh-Hsuan Chen, p.59, 2001)
In Wei-guo Jeng’s work, the mainly approach are literature approach and interview. While the history of textile industry in Hemei Zhan get introduced, the industry itself is also analyzed in a family point of view. As conclusion, Jeng pointed that the development of the textile industry is strongly related to the local family, which can be observed by the aggregate of the textile industry cluster in some of the tradition inhabited place. Besides, the raise of textile industry provides the politic power to the family in this industry, which then form the new leader class after the World War II. (Wei-guo Jeng: 2004)
In Chao, Hui-Lin’s thesis, she analyzed the relationships of productive networks of the small enterprise in Hemei Zhan, which is characterized as so called “Shier- Lih” (協力). In this thesis, she stated the economic exchange form in this network is “delayed payment” (延緩性支付), which is due to the economic network embedded in the social network, and the profit exchange based on the social relationship (人情). (Chao, Hui-Lin: 1993)
In Local Society, Chen, Jie-Ying points out the industrialization of the textile industry in Hemei Zhan is more likely to the tradition mindset, which is simply pursuing better economic in household, and the operation logic emphasizing social relationship (人情). Thus, the firms shows a passive attitude on accumulating capital. (Chen, Jie-Ying: 1997)
Based on the literature review, two points are discovered to refine this study.
- Out of date: Only 1 article are in the 2010s. Since this article focused on the cluster study based on the Hsinchu Science Park and the textile cluster in Hemei Zhan by quantitative method, the question about how to interpret the decline of textile industry in Hemei Zhan was not responded. Thus, the previous searchable study related to this research’s concern is around 15 years before.
- Relevant approach: In the 8 articles, Wang’s geography thesis in 2000, which discussed about the restructuring of the producing network in Hemei Zhan, closed to our research the most. In Wang’s work, it points out the decline of the textile industry in Hemei is due to the loss of young employee, and also the challenge from China and Southeast Asia. And the changing in the textile industry in Hemei Zhan for facing this challenge, is called industry restructuring.
From the points above, this article aims to provide a framework based on the similar idea of Wang’s thesis and try to integrate both the previous literature and up to date information. With this approach, it is expected to explore the complexity behind the simple truth of the decline of the textile industry.
To provide a comparable case study, using framework to generalize the issue first, then specify to specific case might be a possible approach. In Wang’s thesis, it indicates that facing the challenges from the deduction of labor cost, and the competing from China and Southeast Asia, the textile industry got restructuring in 1980s. (Wang, Abstract, 2000)
Based on this idea, the framework is conceptualized as the following statement, “In the environment, how the actor reacts to the phenomenon?” In the issue stated in Wang’s work, it can be organized as “in 1980s, how the textile industry in Hemei Zhan reacts to the industrial restructuring due to the challenges from the deduction of labor cost, and the competing from China and Southeast Asia.”
The statement is composed by 3 parts, which are the environment (1980s), the actor (the textile industry in Hemei Zhan), and the phenomenon (industrial restructuring). The rest of this section will provide a investigation of these 3 parts.
In this case, the actor is the textile cluster in Hemei Zhan, which most of the firms in are small and medium enterprise (SME). Thus, to specify the actor, 3 dimensions of the parameters are use, which are firm, geography, and netchain. The explanation of each dimension is as follows,
- Firm: This dimension is used to specify the size of the firms. The dimension of this case is SME.
- Geography: This dimension is introduced to compare the difference between locations. And for this dimension, this study is specified as the firms in Hemei Zhan.
- Netchain: To specify the position of the firms in the supply chain, this dimension is introduced. (Figure 5) To interpret both the vertical interdependencies along the supply chain, and the horizontal inter-organizational relationships in a network, the idea of netchain analysis is adapted. In Lazzarini, Chaddad, and Cooks’ work, they integrate the supply chain analysis and network analysis to conceptualize a new analysis idea called netchain, which is claimed to provide “all types of inter-organisational interdependencies” (Lazzarini, S., Chaddad, F., & Cook, M., p.19, 2001)
In this research, the netchain is the textile cluster.
A 3 dimensions figure is shown in figure 6.
While the actor part use 3 dimensions to specify, the environment is based on the scale dimension. The scale dimension is separated to 3 levels, which are micro, meso, and macro. For each level, a few sub-levels are introduced. For example, there are 3 sub-levels, which are nation, region, and globe, in the macro level.
Based on the scale and sub-scale, different analytic framework is used to specify the environment. For example, the PEST analysis, which focus on the political, economic, social, and technological factors, can be introduced to specify the macro level of the environment. (Ho, J. K. K. :2014)
While the environment and actor parts are used to characterize cases, the phenomenon part is introduced to make the cases comparable. Figure 7 provide a conceptual framework to show how the phenomenon part make the comparison possible. This framework points that when under the same phenomenon (phenomenon A in the figure 7), how different cases (which are different in the environment and actor part) perform differently. 4 issues are stated to make the comparison.
- Issue A is used to specify the phenomenon. In this research, it is “what is the reason cause the decline of the textile industry at Hemei Zhan?”
- Issue B and C provides how different cases perform differently facing the similar phenomenon. (For issue B, it is “what are the strategies for the other cases in Phenomenon A adapted” which are the other cases used to compare with the Hemei’s case. And issue C is “what are the strategies for the textile industry at Hemei Zhan adapted”, elaborated how the Hemei’s case respond to the phenomenon A.
- Issue D is the comparison section, which aims to “compare with each other.” Academic finding is expected based on the comparison process.
The next 3 sections will provide a primary investigation from 3 different parts.
In Tang, Zhi-Hong and Su,Zhi-Qing’s work, they cited the development stage of the industry in Taiwan as follows,
(Tang, Zhi-Hong and Su,Zhi-Qing :2015).1945–1952: the post-war reconstruction period
1953–1972: light industry development
1973 – 1983: the development of heavy and chemical industries
1984 – 1990: the development of strategic industries
After 1991: the development of high-tech industries.
In 1950s, the national government use the “import-substitution” strategy to support the textile industry in Taiwan, aims to reduce the high cost of importing yarn and cloth. The textile industry in Taiwan started to soar and become the 2nd largest export industry in Taiwan. From 1960s to early 1980s, the textile industry grew and get into mature.
In the early 1980s, the textile industry becomes the largest export industry. The literature points that in this period, the successful of the export policy of the textile industry is because the industrialized countries focus on developing high-end product to face the increasing labor, while the textile industry in developing countries are still premature and needs large amount of low-quality semi-product or product. Thus, the textile industry in Taiwan gets the opportunity to export products in the international market.
After 1980s, the new industrialized countries started to join the global economic, and their lower labor cost attracted foreign investment to build factories in these countries. Facing this change, some firms in Taiwan also invested aboard, or upgraded equipment to both increase quality and quantity. However, 80% of the weaving firms in Taiwan were SMEs, which are hard to invest oversea due to the restriction of capital. While some of the SMEs could upgrade machines, others only could lose the competence or left the market.
In Hemei Zhan, the textile industry also declined dramatically after 1980s. In the weaving industry, the number of employees drop roughly in half. (Wang: 2000)
Based on the history of the development of the textile industry from 1950s to 1980s, the phenomenon is specified as “The issue the textile industry faces when the industry structure changes along the development of the country.”
While there are many levels and sub-levels in the scale dimension should be investigate, this section will only discuss the policy aspect (P) from the macro level as a primary approach. Based on the work of Wang’s thesis, the investigation of the policy starts from 2000, to 2021, and the result is in figure 8 and 9.
According to the flowchart, the direction of the policies for the textile industry at first are general, diversifying to different strategies like accelerating investment, R&D, branding, or recruiting talent. With time goes by, the policies are more and more focus on digitalization or smart industry.
However, it is doubtful if digitalization is a good way for SMEs to adapted when facing the changing caused by the development of the nation’s industry.
To specify the actor, 3 dimensions are introduced.
- Firm: Since most of the firms in Hemei Zhan is SMEs, the SMEs is the firm type specified. (Figure 10 shows the percentage of the firms’ size in the number of the employees. According to the Standards for Identifying Small and Medium-sized Enterprises, the firms whose paid-in capital is no more than NT$100 million, or which hires fewer than 200 regular employees, can be called as SMEs. Based on the figure 10, more than 90% of the firms in Hemei Zhan are SMEs)
- Geography: In this study, this dimension is specified as the firms in Hemei Zhan.
- Netchain: To specify this dimension more precisely, the industry composition of the textile industry in Hemei Zhan is investigated. The figure 11 shows the largest group in textile industry in Hemei is the manufacture of the textile product, while the 2nd largest group is weaving of textiles. Thus, the netchain dimension of this study is “manufacture of the textile product” and “weaving of textiles” industry.
7.1 What are the upgrading in the apparel value chain
Before investigating the strategies adapted by the textile industry in Hemei Zhan, it is necessary to learn how overall textile industry changing the strategies facing challenge. In Frederick, S., & Gereffi, G.’s work, there are 5 upgrading type in the apparel value chain. (Table 3) (Frederick, S., & Gereffi, G.: 2011)
In the case of the textile industry in Hemei Zhan, the firms chose to close the factory, upgrade the equipment, changing producing network, and recruit immigrant labor in 1980s. (Wang, p.142, 2000)
However, what about the strategies the textile industry takes now? Due to the limitation of time and the COVID-19, this article didn’t conduct enough interviews to the SMEs in Hemei Zhan, thus the strategies adapt in these years are still unknown. But a potential strategy is investigated, which is the Hemei Textile Cultural Park (和美紡織文化園區).
The Hemei Textile Cultural Park seems important to the textile industry in Hemei Zhan. One of the clues is that the Hemei Textile Cultural Park is mentioned at the “Chairperson’s word” webpage, in the official website of Taiwan Weaving Industrial Association (TWIA). The chairperson said the promotion of Hemei Textile Cultural Park is a vision. Then he said the association should keep working on it.
It might be a place to combining tourism and branding. One similar case is the cultural and creative building (“織足藏樂館”) in Shetou Xiang (Township, “鄉”) in the same county. In this building, there are places for selling local products, or special zone renting to the local hosiery companies. Besides, it also provides room to held cultural activities.
However, the establishment of the cultural park faced challenges. According to the latest News in 2017, the land which planned to build the cultural park was cancelled by the jury. Keep promoting the establishment of the cultural park, the Changhua County government formed a group to deal with this establishment.
To follow the progress of the establishment of the cultural park, an interview of the stakeholder participating in the establishment was conducted. This interviewee indicated that the Hemei Textile Cultural Park might be in some floor in the Hemei Citizen Sport Center (和美全民運動館), which is a sport center in planning. The interviewee also points that the establishment of the Hemei Textile Cultural Park is still in beginning stage, while the opinions from different stakeholders didn’t converge yet, and the planning process is still ongoing.
Thus, even though a cultural park might be a potential strategy for facing the challenge, the Hemei Textile Cultural Park might not contribute to this issue recently because the establishment seems not to be finished until a few year later.
With a half year study conducted by an individual student researcher, under the COVID-19 outbreak in Taiwan from May to August, this research mainly conducts a brief literature review, and try to provide a way to conceptualize the decline of textile industry in Taiwan. Thus, it lacks empirical research about how the SMEs in Hemei Zhan facing the decline of textile industry in Taiwan in these 2 decades.
A lack of empirical research causes the main investigation, which is “What are the strategies the textile industry in Hemei Zhan adapted”, left blink. What this article tries to do with this drawback are scanning the policies for the textile industry in these 2 decades, and investigate a potential strategy, which is the Hemei Textile Cultural Park. With this effort, it is assumed to provide a more informative background for the future work.
Another limitation, or intrinsic bias, is in the conceptualized statement, “In the environment, how the actor reacts to the phenomenon?” In the statement, the actor is the SMEs in textile industry in Hemei Zhan. However, it is doubtful to treat these SMEs as an entity. Even though these firms share similar environment, history, and facing similar phenomenon, they probably develop different strategy, and performance differently. It might be important to state the difference between these firms to catch how the actor, or actors, adapted to the phenomenon.
To ensure the coherence, and keep the article straightforward, only the policy aspect (P) in macro level get considered. However, other aspects are also essential in this issue. While an overall investigation is not conducted, a few important points from other aspects are obvious during the literature review, which will mentioned below.
- From the aspect of the environment in macro level: The environmental regulation for the textile industry in Taiwan also influence the decision of the firms in Hemei Zhan. (Chuagu feng chia: 2003)
- From the aspect of the technology in meso level: How do the public research institutes like Industrial Technology Research Institute (ITRI), or Textile Technology Research Institute (TTRI) cooperate with the textile industry to produce high-end products, or digitalize the manufacturing process? And do the firms in textile industry in Hemei Zhan participate in this kind of innovation?
- From the aspect of society in micro level: In Chen’s work, it claims that people who operating textile factories in Hemei Zhan switch to firming when the textile market get down. Besides, the reason why they keep the textile business is simply pursuing better economic in household, which is difference from the accumulation logic of the capitalism. How does this producing model affect the strategies the textile industry in Hemei Zhan adapted?
This research provides a framework to explore further from the decline of the textile industry in Taiwan. With the statement “In the environment, how the actor reacts to the phenomenon?”, it is possible to compare different cases under similar phenomenon. Based on the statement, the most essential future work is getting the empirical cases in the actor parts. Without the empirical cases of how the textile industry in Hemei Zhan facing the challenge, there will be no comparison at all.
This article aims to refine the issue of the decline of textile industry in Taiwan by the case study of the textile industry in Hemei Zhan in Changhua County. With the general statement, “In the environment, how the actor reacts to the phenomenon?” 3 parts are discussed for analyzing this issue.
Tracing back to the development of the textile industry in Taiwan from 1950s to 1980s, the phenomenon is concluded as “the issue the textile industry faces when the industry structure changes along the development of the country” And in the part of the environment, the aspect of policy is mainly taken, which result in raising the doubt “how the digitalization help the SMEs when facing the changing caused by the development of the nation’s industry.”
Following the questions, different strategies adapted by the firms in the apparel value chain and the textile industry in Hemei Zhan are explored. While the literature about the strategies adapted by SMEs in Hemei Zhan is stopped in 2000, the further investigation from this aspect is limited due to the time limitation and the outbreak of the COVID-19. An exploration of the Hemei Textile Cultural Park is taken as an alternative, which is addressed to hardly be a possible strategy in near future due to the premature of the establishment.
- Chieh-Hsuan Chen [陳介玄]. (2001). *Team and Boss [班底與老闆]. 聯經出版事業公司.
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*Tang, Zhi-Hong [唐志宏], *Su,Zhi-Qing [蘇志青]. (2015). ? [破壞中的重建：戰後彰化在地產業的變遷與分期]. [產業論壇‧深化在地產業文化認知學術研討會], [建國科大學].
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Use * to said it is my own translation
|Year||Export (in billion USD)||Import (in billion USD)||Trade surplus (in billion USD)|
Table 4: Foreign trade in Textile Industry in Taiwan
(Source: Adapted from https://www.mof.gov.tw/)
 In “Local Government Act”, counties are composed of “Xiang”, “Zhen”, and “Shi”. In English, Xiang and Zhen are all translated to “town”, while Shi is called “County-administered City”. Besides, there is no criteria to distinguish Xiang and Zhen, but when the population in one place is between 100 thousand to 500 thousand, and this place is well developed in the 2nd, 3rd sector industry, has enough cash flow to self-government, convenient transportation system, and developed public facility, can then be set as County-administered City.
 URL: https://scholar.google.com
 URL: https://ndltd.ncl.edu.tw
 Since google scholar requires the Boolean operator should be capitalized, the searching query for google scholar is “(“和美” OR “Hemei”) AND (“紡織” OR “textile” OR “織布” OR “weaving” OR “weave”)”
 More specifically, is “manufacture of the textile product” and “weaving of textiles” industry. Since the textile industry includes many parts along the supply chain, it is not clear to use “textile” industry in the dimension of netchain. In the “actor” section, the netchain will get refined based on the industry composition in Hemei Zhan.
 While in our case, the target industry is textile industry, but it might be possible to interfere to other labor-intensive industries like [need a example] , due to the challenge the textile industry facing are caused not only lost the focus from the national government, but also the incline of labor cost corresponding to the economic growth of the developing country.
 Based on the Standard Industrial Classification of the Republic of China (Rev.11), there are 4 levels to classify the industry in the classification system, which are section (19 in total), division (88 in total), group (249 in total), and class (522 in total). The textile industry is at the division level, while the “manufacture of the textile product” and “weaving of textiles” industry are both belong to the group level.
The original paragraph used in this article is provided in the Appendix [Alphabet] in both translation (English) and original language (traditional Chinese)
 URL: https://news.housefun.com.tw/news/article/203567167263.html
A Research Fellow in Rural Development and Revitalization