Innovation, the Clothing Industry, and Textile Manufacturing in Portugal: An Exploratory Analysis of the Sector Between 2003 and 2022

The study examines the average technical efficiency of the textile and clothing industry in Portugal in terms of the relationship between innovation and development (I&D) spending and return on assets. Data envelopment analysis (DEA) methodology was used for this purpose. The technical efficiency levels of the different sub-sectors were calculated for the period 2003–2022. The data suggests that there are significant variations in efficiency between the various sub-sectors, with the textile sector showing better levels of technical efficiency compared to the clothing sector in terms of the efficiency between the ratio of I&D spending and the return on assets. The results also highlight the need to invest in I&D in order to boost the industry's overall efficiency. On the other hand, they highlight the importance of developing a closer relationship between production and innovation in order to optimise the allocation of resources to innovation and achieve better levels of efficiency. The research corroborates the conclusions of existing studies, emphasising the need to invest in I&D in order to boost industry efficiency. The study points to the need to define strategies aimed at increasing the efficiency of economic activities and promoting a strategy based on competitiveness, adaptability, and greater efficiency in the textile and clothing industry in Portugal.