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Essay: How Fashion Contributes to the Economy: A $1.75 Trillion Global Industry

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Economic Aspect

Fashion is a very big business all around the world, it is a $1.75 trillion global industry. This industry creates a lot of jobs, whether it is designers, models, production of the shows, marketing of the brand, among others, they all contribute to the enormous world of fashion, making the economy better than it is.

Anna Wintour (editor-in-chief of American Vogue)

As you can see on display in the fashion week, the fashion designers are the key drivers of the industry’s creative process. Big names, emerging companies and the most luxurious and big brands contribute to the expanding creative economy.

And while fashion is a hugely significant issue for people in all the world, specially the cities where fashion week happens like Milan, New York, London and Paris, who spend a lot of money on the latest designer labels, Fashion Week has huge economic benefits to the economy as a whole, for example just in New York Fashion Week generates about $850 million every year. And not just in fashion, the annual Fall and Spring events bring between 425 million dollars and 435 million dollars each, as attendee flood into local restaurants, hotels and retail stores, this generates a lot of cash flows all over the city were the event is occurring, and therefore the economy gets better. To put it in context, the Super Bowl, which will be held at New Jersey's stadium in February, will make about $430 million for the wider New York area. The U.S. Open at Flushing Meadows, one of the most lucrative sporting event that happens every year, will last about two weeks and will bring in $750 million, and the Marathon og NYC generates $340 million each year, whereas the NYC Fashion Week generates, as said before $850 million every year.

Speaking of the fashion industry as a whole, is one of the most vibrant and creative business sectors in the world. A lot of research has been undertaken by both statisticians and economists experienced in valuing this creative industry and they have found all of these great opportunities the sector brings the economy of the different countries in which the fashion industry is developed. One of the most influential countries in this type of area is the UK, it is revered as a world-leader in fashion education and consequently producing some one of the most innovative designers, from Vivianne Westwood to John Galliano, and every year their talent creation schemes launch stars on their way to global recognition, which makes the UK have a massive reliance on this sector, the absence would leave a stagnated sector. This said, there are many channels through which the UK fashion industry makes a contribution to the UK economy. It contains the following impacts (which can also be implemented to other countries):

Direct impacts: the employment and activity in the fashion industry itself (manufacturing, retail, wholesale).

Indirect impacts: activity and employment are supported via the supply chain, as a result of UK fashion companies purchasing good and services from suppliers.

Induced impacts: employment and activity supported by those people directly or indirectly employed in the UK fashion industry spending their incomes on goods and services in the wider economy.  

Fashion directly contributes nearly 21 billion pounds to the UK economy, it also has an indirect economic impact, in making people spend in other industries of more than 16 billion pounds. That equals to a total impact of 37 billion pounds. The fashion industry employs nearly a million people, across a wide spectrum of roles, and provides diverse opportunities to young people.

Taking the following into account, we can deduct that the fashion week, in every country that is developed, makes the fashion industry prosper and makes the general income increase more and more, furthermore, in a way, it makes the economy of the world better.

   Regarding Fashion Week in New York City, and its status as the fashion capital of the world a report made by congresswoman Carolyn B. Maloney and the US Congress Joint Economic Committee should put it all to rest, it explores the multiple aspects of New York’s flourishing fashion scene and describes New York Fashion Weeks economic impact as a prosperous opportunity for its economy. The eye-opening report might have those who consider fashion a frivolous interest reevaluates their position. Even after NYFW comes to a close, the city will keep receiving the benefits of the creativity of the designer. The fashion industry in New York city is a 98-billion-dollar business that employs approximately 180,000 people, equaling 6% of the city`s workforce.

To put it all into perspective, here is a statement of how the Fashion Week impacts the economy in the cities it develops:

• Milan: 67 fashion shows and 88 presentations. In addition, there is a 90% of hotel occupancy rate during fashion week in Milan. 15 million euros is the revenue generated for hotels in Milan and surrounding provinces during fashion week.

• Paris: hotel occupancy was 93.9% during Paris Fashion Week, between September 29 to October 7, up to 3.3% from September 15 to September 23.    400 million euros was the Fashion week’s economic impact on Paris, without sales in stores.

• London: 0.7 billion pounds were spent on fashion online in the U.K. in the year 2014.   26 billion pounds in contribution to the UK`s economy from the U.K. fashion industry, up from 21 billion pounds in 2009, according to Oxford Economics, 2014. 27 billion pounds of women’s wear sales predicted for 2015.

• New York: The city’s fashion weeks holds approx 232,000 of people atending to more than 500 shows, creating a total economic impact of $887 million. The fashion industry of New York City employs more than 184,000, pays 11.6 billion dollars in wages.

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