What can we learn on Offshoring/commoditization in IT Services from garment industry?

The above is a very interesting question.... I remember while as a kid in India, how the textile outsourcing promised endless employment opportunities to the skilled and unskilled labor of India...so much so that having a sewing machine was considered as an insurance plan for the unemployed spouces of bread-winners....

Lets look at something interesting from the garment industry....

The shift in factors of production to offshore was triggered by the low-cost labour to stich garments and the labour intensiveness (both skilled and unskilled) of the industry itself....As consumer started pushing for lower prices; the textile industry quickly pushed production to the offshore centers in Asia (China, India, Phillipines, Bangaldesh, Pakistan, etc...). The developed countries retained the designing and marketing at their respective centers. The entire offshoring/outsourcing in the Garment industry (textile and clothing) has been highly regulated through GATT, MFA, and ATC regulations limiting the scale and scope of offshoring to developing countries (in other words low-cost). It would be interesting to understand what contributed to commoditization in this industry:

1. Consumer propoensity to spend less on textile/clothing, and
2. Skill/capability requirements required to participate
3. the support provided by local governments which perceived it as a means to generate employment to the masses (both skilled and unskilled)
4. Low labour cost from developing countries and
5. Higher degree of automation in textile and clothing industry (more so in the latter)

The disincentives for commoditization and offshoring are:
1. Regulation (quotas systems, quantitative restrictions, etc.)
2. Customer proximity that helps in understanding the tastes, preferences, needs, wants and choices...this basically relates to lot of qualitatives that are difficult to do from offshore

An interesting additional perspective on this can be got from the web site: http://www.tno.it/tecno_it/fashion4_2_05/documenti/WTO%20Discussion%20Paper%20TExtile%20and%20Clothing%20after%202005.pdf

How much of it relates to IT services? I think most of it in different shapes, sizes, and in scope...We will address this in a seprate article...