Small-scale Fashion Industry Facing Challenges from Climate Change, COVID-19, and Brexit
A recently published report, commissioned by the Creative Industries Council, highlights the impact of climate change, COVID-19, and Brexit on the supply chain relocation strategies of fashion MSMEs in the UK. The report, however, does not provide specific details about the surveyed employers.
The report reveals that the increasing climate-related disruptions have pushed fashion MSMEs to prioritize supply chain resilience and adopt sustainable sourcing practices. This shift includes moving towards suppliers and manufacturing hubs with lower environmental risks, focusing on eco-friendly materials and processes. The growing demand for durable, sustainable textiles like cotton, linen, khadi, and silk in Indian MSMEs’ exports to markets such as the U.S. is a testament to this trend.
The pandemic has exposed vulnerabilities in global supply chains, leading MSMEs to diversify beyond traditional hubs, notably China. To manage disruptions better, MSMEs are exploring alternative sourcing destinations, strengthening domestic value chains, and increasing supply chain agility. India, with government support through textile parks and cluster development, has become a favored alternative supply base for many U.S. retailers aiming for stable and affordable sourcing.
Brexit has introduced new trade and regulatory complexities between the UK and EU, encouraging MSMEs to diversify export markets and adjust contracts to mitigate tariff and non-tariff barriers. Indian MSMEs are advised to leverage bilateral trade agreements such as those with the UK and other regions (ASEAN, Africa) to offset Brexit-caused uncertainties.
Notable strategic responses by fashion MSMEs include diversifying exports beyond traditional markets, nearshoring or regionalizing production, emphasizing compliance and real-time regulatory tracking, investing in value-added products, strengthening domestic sourcing, and financial resilience.
The report also discusses the "Make in India 2.0" initiative, which underscores the urgency for MSMEs to become globally competitive through scale, quality, and international market orientation as supply chains evolve beyond local or China-centric models. Recent data show Indian MSMEs increasingly serving U.S. fashion retailers with ethnic-fusion and sustainable apparel, reflecting conscious consumer trends and supply chain shifts post-pandemic and geopolitical tensions.
The discussion paper, authored by Dr Emmanuel Sirimal Silva and Dr Alessandra Vecchi from London College of Fashion, University of the Arts London, analyses the impact of climate change, COVID-19, and Brexit on the supply chain relocation strategies of fashion MSMEs. The research design used was a mixed methods sequential explanatory design, with quantitative research followed by qualitative research, involving a questionnaire targeting fashion MSMEs in the UK and a focus group with stakeholders. The worldwide exports of creative goods surpassed 500 billion USD in 2015, with a 150% increase since 2000, and the authors focus on four focal points for policy intervention: costs, environmental and social sustainability, logistics, and risk management.
In summary, fashion MSMEs are relocating and reconfiguring supply chains by adopting diversified, resilient, and sustainability-driven strategies to overcome climate risks, COVID-19 disruptions, and post-Brexit trade uncertainties. These changes are underscored by government support, evolving market demand, and the need to manage increased tariffs and regulatory compliance in key export destinations.
- The report indicates that fashion MSMEs in the UK are prioritizing supply chain resilience due to increasing climate-related disruptions, focusing on sustainable sourcing practices.
- Climate change is pushing fashion MSMEs to shift towards suppliers and manufacturing hubs with lower environmental risks, favoring eco-friendly materials and processes.
- The pandemic has led fashion MSMEs to diversify beyond traditional hubs, such as China, and explore alternative sourcing destinations like India.
- The report suggests that Brexit has introduced new trade and regulatory complexities, encouraging MSMEs to diversify export markets and adjust contracts to mitigate tariff and non-tariff barriers.
- MSMEs are advised to leverage bilateral trade agreements with countries like the UK and other regions to offset Brexit-caused uncertainties.
- Strategic responses by fashion MSMEs include diversifying exports, nearshoring, emphasizing compliance, real-time regulatory tracking, investing in value-added products, strengthening domestic sourcing, and financial resilience.
- The research focuses on four focal points for policy intervention: costs, environmental and social sustainability, logistics, and risk management.
- The discussion paper analyzes the impact of climate change, COVID-19, and Brexit on the supply chain relocation strategies of fashion MSMEs, employing a mixed methods sequential explanatory design.
- The worldwide exports of creative goods have surpassed 500 billion USD, with a 150% increase since 2000, highlighting the need for government support, market demand evolution, and the management of increased tariffs and regulatory compliance in key export destinations.
