technological developments in the textile industry have been very substantial, particularly over the last three decades, and this paper quantifies and illustrates the impact that these technological developments have made since 1967 on machine and labor productivity, quality, costs, and services. great as these improvements have been, have they succeeded in making the textile industry of developed high-wage countries competitive from a cost point of view with the textile industries of lower-wage countries of south-east asia? in order to answer this question, a comparison is made in the case of producing a basic apparel product, a cotton/polyester-fibre dress shirt, in the united states and in south-east asia. the results show that for all pratical purposes a state-of-the-art mill in the u.s.a can be competitive with a south-east asian mill in producing the fabric for the dress shirt but that the advantage of the low-wage country in making-up the shirt is still sufficient to make the final product, i.e. the dress shirt, competitive from a pure-cost point of view. it is also pointed out that this cost advantage can be offset to a substantial degree by improved services. (author abstract)