September 24, 2025

The technical disruption ahead for leather

As the leather industry congregates in Milan, I hope they will spend time looking at the opportunity afforded by the convergence of consumer revulsion to plastics, supply chain restructuring caused by America’s trade policy and a need to reverse the loss of hides and skins going to landfill and gelatine.

There is a second set of considerations which cannot be ignored as we look at new machinery and listen to new thoughts, which is imminent technical disruption. This is a topic that has been high on the agenda for many years but has not really happened. Since the sixties, the leather industry has been pushed and pulled to new locations because of low-cost labour. New automatic machinery backed by digital technologies were supposed to change all this. But new pressures plus AI make it likely that a high-level disruption is imminent: the ned of the low labour cost model.

Given that much of this began with companies like Sewbo over ten years ago, the automation of the manufacture of products like garments has been slow. Garment patterns are complicated; materials can be soft and unstructured with different thicknesses and even the variation between rolls of fabric can upset some machines. At last, today in several countries such as Bangladesh, there has been a move to production trials making items like T-shirts and jeans. With AI now introduced in a wider way, this is now likely to accelerate.

In an interview in 2017, Ian Goldin of Oxford Martin School said that “sewbot” automation will lead to “a production system that is determined by the price of capital, not the price of labour. And in that capital is much cheaper in the advanced economies than emerging economies, so it will be cheaper to install robots and to have machine intelligence in the advanced economies than it will be in emerging economies.” In essence, what the leather and textile industry had watched since the 1960s when Korea and Taiwan moved from agriculture to low-cost manufacturing and on to services and advanced manufacturing was coming to an end. It is a format successfully replicated throughout much of Asia and Latin America,

The low labour cost model relies on abundant, inexpensive human labour, but in many Asian countries such as China, Vietnam and Bangladesh, labour costs are now rising and this has been a major driver to avoid further price inflation.

While the leather industry has run in parallel with the textile industry over the last 75 years, it is more complex and adaptation to these “sewbots” will be slower. That does not mean that the low wage model remains intact for leather. As with textiles, wages are rising and with increasing compliance costs for environmental regulations, worker safety and traceability can no longer be easily offset with cheap labour.

The expertise of the Italian machinery makers has increased tannery productivity by removing some heavy and repetitive tasks and improved reliability in chemical measurements and additions, but this has not changed the fact that unlike the rest of the leather chain the tanning process itself remains capital intensive.

In more recent years, there have been advancements in nesting software and CAD cutting, but it has never been as easy as with synthetics, and what difference AI can make is still to be seen. No hide is the same, nor is any hide uniform and cutting requires decisions about defect placement and grain/colour matching. With production runs also smaller in the leather sector, labour skills look likely to remain relevant.

Additionally, a high proportion of leather production is sold in accordance with the ancient “Mystery” of the leather industry. This term was derived from the Old French “mestier” which itself came from the Latin “ministerium” meaning a trade or professional skill. Leather holds an image for authenticity and quality, and this gives it its luxury and craftmanship position which comes through recognition that leather is nature’s raw material and to keep it so artisan work still forms the basis of tannery work.

To maintain this manual craft, skills remain important, and the use of automation and AI will remain mostly supportive and in the background. While more automated synthetic footwear lines already exist and will advance, especially in the sneaker sector, there remains growth opportunities in welted footwear where new consumers appreciate health, comfort, longevity and the opportunity to repair making a higher upfront cost acceptable. Increasingly, it is the all-leather shoe which makes sense for a circular society.

So, the major outcomes are most likely to be hybrid models, with automated systems capturing value through the service side supporting design and platforms for ESG compliance rather than straight labour replacement. Tanners and manufacturers with high ESG standards will increasingly win orders at the expense of those with only cheaper labour costs and I hope the leather industry will promote this far and wide. The leather industry does not want the irresponsible tanners to continue.

For leather, the end of the low-labour-cost export model does not mean all jobs move to robots — but it does mean we are near the end of pure wage arbitrage where the latest cheapest labour country wins the business. Ethiopia is perhaps the last effort to work this model and it has struggled.

In the leather industry, we must create our own balance of technology and craft as leather making, with every hide and skin individual, remains founded on the ancient mystery of a skill whose job is to maintain the nature and beauty of leather while allowing it to perform in a wide range of end uses. With lower-priced items like some belts and bags, cutting, stitching standard parts and material handling will steadily become automated, and this, over time, will reduce the amount of labour involved.

Emerging economies must become less reliant on aging Western consumers and brands, with workers learning all the essential basic skills. Continued training and upskilling will be required to match and better international standards in using AI and advanced technologies and moving to stable, even leadership roles in leather.

Michael Redwood

Leather chemist, writer, and advisor on responsible leather manufacturing and material strategy. This article was originally written for ILM.