Manufacturers, states or algorithms: who will dominate textile industry in 2040?

With the support of the international organisation Forum for the Future, the H&M Foundation unveiled a foresight study on November 11 describing four possible configurations for the textile industry in 2040. Featuring a business-to-business focus, this document aims to offer textile sector executives “a practical tool to test their strategies against different possible futures”, thereby helping them “make better-informed decisions towards a just transition to climate goals such as net zero.”

Spanning just under 50 pages, the document titled Textile Futures 2040 develops scenarios based on already observable trends and signals. None of these different scenarios set in 2040 are “exclusively positive or negative”, the report specifies, nor do they “constitute predictions aimed at precisely describing what the textile industry will be in the future”. Instead, the value of the report lies in a comprehensive approach that allows stakeholders to imagine what the future might hold for the textile sector.

In a statement, Anna Gedda, CEO of the H&M Foundation, explains: “No one knows what the textile industry will look like in 2040, yet the decisions made today will help shape it. We supported the Textile Futures 2040 initiative to help industry players challenge their preconceptions and make more informed choices on the path to net zero.”

Method based on archetypes

The research was conducted throughout 2026. It is based on seven expert interviews, seven focus groups covering Europe, the Americas and Asia, and three testing workshops. More than 60 stakeholders participated, including global and local brands, manufacturers, trade unions and labour rights advocates. Futurists, designers, foundations, academics and students also took part.

Each scenario combines several parameters: the purpose of the economic system; the geography of production; the degree of automation; consumption patterns; the approach to circularity; surveillance; the relationship with nature; and cultural evolution. Each future is then evaluated according to four criteria: the pace of decarbonisation, the level of climate change adaptation, the distribution of power and social justice.

There are a few limitations, as the research focused primarily on production hubs in South, East and Southeast Asia, alongside European brands and manufacturers. Furthermore, the authors acknowledge their “inability to represent the perspectives of the most marginalised and vulnerable.”

“New Age Corporate Empire”: manufacturers gain upper hand

In this first future, major corporations manage economies comparable to those of India, Brazil or Germany. Trade remains globalised. In the textile sector, manufacturers dominate the value chain through their control of materials, technologies and labour. They acquire smaller factories and start-ups, selling direct-to-consumer via integrated platforms. Retailers retain their influence in Europe and North America, although they primarily act as curators.

Waterless dyeing, fibre recycling and on-demand production have become widespread. Water consumption has fallen, while energy use has increased. For the majority of consumers, physical clothing becomes utilitarian and durable. Stylistic expression becomes virtual, viewed through smart glasses or artificial intelligence-equipped lenses. The report illustrates this concept with a fictional object, the Adrishya kurta: a recycled-fibre tunic that regulates temperature and serves as a base for virtual garments sold via subscription. Decarbonisation only progresses when it serves profitability. Automation has made factory workers more precarious, with only a minority of responsible companies maintaining stable employment and social protection.

“Power Shift”: market turns towards Asia

The second scenario places China, India, Vietnam and Indonesia at the centre of the global economy. Governments view fashion both as an economic driver and as an instrument of soft power. Manufacturers become their own brands, while certain Western labels are acquired and repositioned for the tastes of Asian consumers. The market fragments into a multitude of labels targeting subcultures, with influencers driving trends more than brands. Western-branded clothing is now perceived as outdated and of inferior quality.

Automated fast fashion persists, while craftsmanship gains significant value. Trade unions grow stronger and employment in the sector becomes well-remunerated. States heavily finance decarbonisation, at the cost of increased dependence for manufacturers. In the narrative accompanying the scenario, a Vietnamese factory director must choose between a fine and a transition loan that imposes a ministry observer on his board of directors. Nature, conversely, is sacrificed to dams, mining concessions and data centres.

“Global Storms, Local Shields”: supply chains fragment

In the third scenario, global supply chains fail to withstand climate pressures and protectionism. Two trends dominate: the reshoring of large-scale production and investment in small-scale artisanal manufacturing. Costs linked to nearshoring make fast fashion unaffordable. Rising fossil fuel prices reduce the use of petrochemical-based fibres in favour of local resources such as wood pulp, bamboo and textile-to-textile recycling.

The expected automation has not occurred due to a lack of available energy and raw materials. The circular economy becomes the main driver of growth and creates numerous jobs in material recovery, even if not all are well-protected or well-paid. Repair and upcycling trades, however, are highly sought after, particularly by young people. Brands rely on second-hand fashion, take-back schemes and repair services. Among the signals already visible, the report cites the repair bonus introduced in France for clothing and footwear.

“New Noosphere”: algorithms decide

The fourth scenario entrusts economic management to AI agents owned by corporations yet programmed by states. Manufacturers still exist legally, although strategic decisions are out of their hands. Volumes, materials and even product specifications are set by algorithms based on planetary boundaries. Factories operate almost entirely without staff, powered by clean electricity that has become virtually free. Labour costs therefore no longer justify offshoring, and production is established close to raw materials and markets. For economies based on garment assembly, the disruption is major.

Virgin fibres are rationed and fibre-to-fibre recycling becomes the primary material source, supplemented by biomaterials such as mycelium or cellulosic fibres. Collections feature far fewer styles and seasonality diminishes. A universal basic income compensates for the disappearance of industrial labour, though trade unions have lost their influence and algorithmic decisions remain opaque.

Common lessons

A comparison of the four scenarios reveals several common points:

• The position of brands weakens in three of the four futures, in favour of manufacturers, states or algorithms.
• Circularity is present everywhere, albeit in very different forms: industrial recycling, local repair or regeneration.
• Fast fashion only survives in the “Power Shift” scenario.
• Finally, none of these trajectories guarantees both rapid decarbonisation and a just transition for workers.

This article was partially written with the support of an artificial intelligence tool before being fact-checked, completed and edited by a FashionUnited journalist.