Economic Analysis of Modern Textiles & Clothing Market within the Process of Final Completion of the ACT/WTO Agreement

Abstract

At the summit in Lisbon in March 2000 the European Council confirmed that: the strategic objective of Europe for the forthcoming decade is to become the most competitive and dynamic knowledge-based economy, capable of sustained economic growth accompanied by improved number and quality of jobs and better social conditions. For enterprises in Europe this translates into necessary endeavours targeted to enhanced competitiveness being interpreted as an enterprise’s ability to steadily stimulate development, to increase productivity and to enlarge markets under strong competition.

With respect to macro economy, competitiveness is identified with a steady upward trend measured by GDP growth, productivity of resources and factors of production growing in macro terms and economic expansion on the international market (enlargement of the existing and entering into new markets), that is with the capability of offering new, better and cheaper services in a competitive environment. M. E. Porter equated competitiveness with productivity and stressed the importance of identifying their determinants. The primary factor cited as a determinant of competitiveness in macro as well as micro terms is human resources.

According to an OECD definition competitiveness denotes the ability of firms, industries, regions, nations or transnational groups to confront international competition and to secure sustainability of a relatively high rate of return on the employed factors of production and of relatively high level of employment. In the long term improved competitiveness yields a growth in total productivity. Higher productivity is particularly important for more successful competitiveness on markets open to international competition.

The synonym of improved competitiveness is higher productivity. Enterprises are competitive when their productivity of labour and all factors of production are consistently growing, which situation allows them to reduce the unit costs of their output, etc., but affects also other enterprises at the national and international levels. Higher productivity provides funding for organisation’s expansion plans. In the short term citizens benefit from better and cheaper products available on the market and in the medium term from growing employment. Another effect is a constant growth in wages in real terms. As a result a country’s living standard goes up when its productivity (in macro terms) growth is sustained. Therefore, an enterprise plays the primary role in generating revenues and employment and contributes to a lasting and balanced economic and social development.

Productivity growth depends on a number of factors, among which innovations and investments in the ICT sector and on development of the human capital belong to the most important. Economic development and productivity growth result from educated workforce. Human capital, especially in technological sectors, makes productivity grow due to the accumulation and dissemination of knowledge. Knowledge and the skill of its efficient application are the key to the competitiveness of economies. It is practical to develop and pursue activities that aim at providing people in Europe with sufficient knowledge, appropriate strategies and workable methods accelerating teaching available for everyone¹.

Consequently, higher productivity determines both improved competitiveness of economy as a whole and its balanced social and economic development.

In setting out its renewed Action Programme for Growth and Employment, the Commission declared its commitment to focusing the renewed Lisbon Strategy on growth and employment. To do this the EU’s priorities were declared to be:

• Making Europe a more attractive place to invest and
• Putting knowledge and innovation at the heart of European
• Shaping policies to allow businesses to create more and better

This Communication on industrial policy was announced under the Community Lisbon Programme of July 2005 and represents an important contribution to the achievement of these objectives. The health of manufacturing industry is essential for Europe’s ability to grow. Whilst it is currently undergoing important changes and facing major challenges, it needs a favourable business environment to continue to develop and prosper. The main role of industrial policy is to provide the right framework conditions for enterprise development and innovation in order to make the EU an attractive place for industrial investment and job creation.