ADJUSTMENT TO GLOBALISATION: A STUDY OF THE FOOTWEAR INDUSTRY IN EUROPE

We now proceed to look at those factors which have affected the performance of the
footwear industry in Europe in the light of globalisation and how European footwear
producers have reacted to increasing foreign competition. In the section above, we
showed that, in general, adjustment of the labour input in Europe has taken the form of
reductions in the quantity employed and that large changes to the relative price of labour
employed in footwear are not apparent.

We start by looking at changes in labour productivity. There are a number of factors that
can influence labour productivity, such as, technological change, changes to the amount
of capital per worker, and changes in skills. Table 8 presents a measure of the change in
labour productivity, the ratio of production in physical units to the utilisation of labour,
for six selected countries for two periods: 1985 relative to 1970 and then 1994 relative
to 1985. Here the data are for total footwear production and so do not reflect the
differences between the production of leather and non-leather footwear.

Over the period 1970-1985, we see that labour productivity improved strongly in Spain
with the average worker producing twice as many pairs of shoes in 1985 as in 1970.
Productivity also grew strongly in Italy and the UK while in the German and Portuguese
footwear sectors labour productivity remained fairly constant. On the other hand, in the
US productivity fell by almost 10 per cent. In the subsequent period until 1994,
productivity continued to grow strongly in Spain and there was a sharp increase in
productivity growth in Portugal, Germany and the US. In contrast, productivity fell
mildly in Italy and was little changed in the UK.

Source: ISIS, OECD

¹Iabour productivity is measured by -total production/total number employed (including self-employed)
²output is measured in units; ³1985 to 1989

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