Fashion MSMEs confronting Climate Change, COVID-19 and Brexit: Key Drivers for Supply Chain Relocation

Purpose
This discussion paper presents findings from a research study which analysed the impact of Climate Change, Covid-19 and Brexit on the drivers and factors underlying fashion Micro/Small and Medium Enterprises (MSMEs) supply chain relocation strategies.

Methodology
The study was based on a mixed methods sequential explanatory research design whereby the quantitative research was followed by the qualitative research. The data collection involved a questionnaire targeting fashion MSMEs in the UK and a focus group with stakeholders.

Findings
A comprehensive list of factors underlying 16 drivers that could potentially impact the relocation of fashion MSMEs due to Climate Change, Brexit, and Covid-19 was produced. Next, our survey recorded a total of 37 usable responses from UK fashion MSMEs and the ensuing findings were complemented with qualitative insights from 5 stakeholders representing fashion MSMEs. In the report, we identify several factors and drivers underlying relocation strategies differentiated by Climate Change, Brexit, and Covid-19. Finally, through the quantitative and qualitative research, we hone in on 4 focal points for policy intervention: costs, environmental and social sustainability, logistics, and risk management.

Policy Implications
A key driver underlying relocation strategies for fashion MSMEs in the UK is cost. Given the importance of MSMEs for the UK economy and local communities, the government could curb relocations by helping MSMEs with the costs of doing business via subsidies, fiscal policy reforms, lenient trade policies, and improvements in efficiency and productivity of government services (e.g., border controls), which would also help overcome factors associated with logistics as a driver underlying relocation strategies. In terms of tackling environmental and social sustainability, facilitating the development of stakeholder networks capable of performing sustainability practices within SMEs and stricter regulation along with rewards in the form of subsidies for compliance would help curb relocations. Finally, in terms of curbing concerns around risk management as a driver underlying relocation strategies, the government could focus on policy interventions that would minimise the risks of doing business in the UK and make provisions for dedicated programmes tailored to improve fashion MSMEs risk management capabilities. It should be noted that for these policy initiatives to be effective, the industry should also proactively engage in complementary activities that would reinforce government interventions.