Qasim Mohammad is a Toronto-based technology entrepreneur and an Innovation Adviser at the Canadian Arts and Fashion Awards
Canada is experiencing a technology renaissance. But there is another industry that is ready for its time in the spotlight: fashion.
Over the past several years, the advent of new media platforms, a global shift in manufacturing to Asia and a new-found cultural awareness attributable to globalization have presented Canadian fashion designers with a variety of opportunities and challenges. For some, these trends have enabled new avenues for international exposure and a chance to run leaner businesses operations. But for others, these same trends have made it difficult to compete with foreign brands that seem to have discovered an unshakable formula for world domination.
Despite the opportunities and challenges presented by the constantly evolving $2.4-trillion (U.S.) global fashion industry, Canada continues to hold its own. When considering public company data for traditional apparel and accessory companies as an indicator of economic performance and wealth creation, it becomes evident that we have the capacity to build major fashion brands in our country. The data becomes even more compelling when comparing Canada with the top global fashion markets: France, Italy, Britain and the United States.
There are 117 publicly listed apparel and accessory companies (excluding apparel retail) headquartered in Canada, France, Italy, Britain and the United States. It is interesting to note that Canadian brands have created more value on an absolute and per capita basis when compared with Britain. Our brands also trade at the highest average price-to-sales ratio, which is because of higher revenue growth rates, averaging in excess of 50 per cent year-over-year.
The public company statistics are positive for Canada. Indeed, the apparel manufacturing industry's contribution to our GDP has decreased at an average rate of 4.8 per cent since 2011 – after all, it is extremely difficult to compete with progressively lower production costs in countries such as China. But Canadian brands have recognized that in order to create wealth through the local fashion industry, an emphasis must be placed on non-manufacturing, high value-added parts of the global apparel value chain. This includes activities such as design, research and development, branding, merchandising, marketing, logistics and distribution.
In order to ensure that the Canadian fashion economy continues to move into the higher portions of the global apparel value chain, industry insiders and policy makers need to remain focused on enabling the following:
- Access to capital. According to private company data platform Pitchbook, investments in Canadian private apparel and accessory companies have declined at a rate of 1.4 per cent since 2006. During the same period, investments in the United States have increased 7.2 per cent. Being able to attract capital as a young designer is the first step toward building a big business, and Canada’s private investment community needs to wake up to the opportunity in fashion.
- Generating consumer awareness. We need to support initiatives that promote Canadian brands and make them accessible to the masses, such as the Canadian Arts and Fashion Awards and the various city-focused fashion weeks.
- Communication between fashion and other industries. Canada has a growing pool of expertise in major industries such as technology. There are many opportunities for collaboration between fashion and other industries to drive innovation, particularly as it relates to textile research and development, branding and logistics.
It is difficult to address the challenges highlighted above without a plan to create high-impact fashion clusters across the country, which would bring the right pool of talent and resources together to propel the industry forward and generate significant economic impact in hyper-local contexts. This is especially important since Canada doesn't have one governing voice for the fashion industry, as is the case in the United States, France and Britain.
Luckily, we have natural hot-spots such as Vancouver, Toronto and Montreal. These cities host the largest creative arts scenes in the country, as well as diverse business and technology communities that the fashion industry needs to collaborate with closely.
The benefits of clustering are compelling when evaluating New York, the most notable fashion cluster in North America. The city is home to more than 900 fashion companies that employ more than 183,000 employees, who are paid nearly $11-billion in wages and generate almost $2-billion in tax revenue each year. Its semi-annual fashion weeks attract 232,000 attendees to more than 500 shows, generating an economic impact of close to $1-billion annually. With numbers like these, the missed opportunities associated with not supporting fashion communities in major Canadian economic centres are evident.
Canada is a country of brand builders. We have inspired an entire generation with brands such as Lululemon and Canada Goose. Our potential to lead on the global fashion stage is evident through our previous track record, and it is critical for the creative and business communities to collaborate to ensure that we can become leaders in this exciting, and equally lucrative industry.