Business of Handmade

The Role of Craft-led Enterprises in ‘Formalising’ India’s Artisan Economy By 200 Million Artisans (200M)

Credit: rangSutra

India’s 200 million strong artisan economy showcases the vital role played by the informal sector in bringing creativity in conversation with sustainable development in the Global South. 200 Million Artisans’ (200M) Business of Handmade Report explores this relationship through the eyes of 12 formal enterprises, from diverse geographies and scale, that work with India’s artisan communities.

Business of Handmade is available as a downloadable digital report on www.businessofhandmade.com

Making the Case for the Artisan Economy

Post COVID-19, concerned stakeholders are keen on rebuilding broken economies and reversing deep-rooted mindsets that perpetuate inequities. To do so, we need to acknowledge that historically marginalised communities operate in the shadows i.e. within the greys of the informal economy that accounts for over 60% of the global workforce. Nearly 90% of India’s workforce is in the informal sector with no minimum wages or any kind of social security.

In India, the artisan economy is a primarily rural, informal, and creativity-led landscape with a high concentration of low and differently skilled population. Despite that, it already meets 11 out of the 17 Sustainable Development Goals (SDGs). With over 200 million livelihoods directly or indirectly linked to the artisan sector, along with 50% participation of women, the handmade sector also continues to be one of the primary means of dignified employment among rural communities.

Role of Craft-Based Enterprises

Formal enterprises in India’s artisan economy are key to greater inclusion since they employ undocumented rural communities and deploy necessary social protections — thereby formalising artisans.

The research reveals that in India, businesses in the informal cultural economy have a unique growth trajectory. Instead of centralising operations (a hallmark of most formal enterprises), craft-based formal enterprises decentralise.

They take the work to the doorstep of informal artisan communities. This is significant because more than 50% of artisans in India are women who often cannot step out of their homes and communities owing to patriarchal or cultural norms.

Social and creative enterprises also bring in social protections, streamline the farm-to-consumer pipeline via decentralised grassroots collectivising like cooperatives and producer companies. Enterprises recognise and respond to the informal nature of craft-based work and plan around it.

With 90 million new jobs needed in the non-farm sector by 2030, it is time to recognise such enterprises — usually micro, small and medium in size — as the next frontier of impact.

Credit: Fab Creation

About Business of Handmade

The research documents the role of craft-based enterprises in formalising India’s artisan economy. 200M documented 12 social and creative enterprises from diverse geographies, of varying sizes, and legal structures to understand how they navigate challenges posed by informality and culture.

There is a growing tribe of small businesses and micro, small, and medium enterprises (MSMEs) — formal enterprises in India’s handmade sector, often women-led, who play a pivotal role in bridging the language and resource gaps for dispersed artisan communities. Such enterprises are adapting to local needs and contexts to create long-term value. Findings also confirm that context-specific entrepreneurial action can catalyse inclusion of informal and traditionally marginalised creative communities.

Overview of Findings

  1. ‘New Formal’ The New Normal in the Artisan Economy
    The New Formal is a dynamic continuum wherein Informal modes of work among rural creative cultures inform business models of creative enterprises who adapt to local contexts to drive productivity, profits, and innovation. Anchored by entrepreneurial creativity and livelihood generation, the New Formal co-opts the flexibility and complexity of cultural interactions in the informal economy along with metrics from the formal economy like education, policy, and finance.
Business of Handmade: The New Formal as a framework to understand entrepreneurial action / formal-informal interplay in the artisan economy (Original: Krishnamoorthy & Kapur, 2021)

2. Misunderstood and Undermapped
The informal nature of India’s artisan sector is not one of its own doing or choosing. What isn’t mapped or measured remains sidelined as informal. The 200 million strong landscape of craft-based work remains underrepresented as a priority focus area in policy and investment in the absence of reliable census data. Plus, fractured information networks exclude dispersed rural communities from existing schemes on infrastructure, credit, and education.

The State and private actors need to invest in formal research — numbers-led mapping of artisans and craft-led enterprises — as well as incentivise documentation of intangible processes, relationships, and generational knowledge of communities instead of relying only on self-reportage. Intermediaries, social enterprises, and networks aggregating such information will also facilitate upward mobility among artisan communities.

3. One Size Does Not Fit All
A homogenised and monolithic approach perpetuates systemic bias without addressing the true aspirations and needs of rural communities and small businesses. Most investment approaches, even those striving for impact, are rooted in market-rate returns with inflexible investor expectations. High interest rates, bureaucracy, language barriers, inflexible investor expectations, and mandatory collateral make access to credit untenable for formal enterprises as well as for informal artisan communities. This excludes many enterprises with great product-market fits; it also leads to mission drifts among scalable impact enterprises.

Enabling access to alternate forms of financing — catalytic capital, high-risk debt and equity, impact-first investment is an untapped opportunity.

4. Challenges of Language, Discourse, and Knowledge
Conversations around informality and creative economies, rooted in Global North contexts, pose barriers to organic inclusion of differently organised, creative cultures and craft-led enterprises. To engineer systemic reform, the artisan economy must be seen as a site of agency, “[i]nstead of seeing people as patients that need to be treated or objects that need to be changed, they need to be empowered…” (UNDP, 2020). Future conversations on policy and investment can benefit by building on the idea that artisan communities are ‘differently organised’ and by recognising that the New Formal is the new normal.

5. The Great Indian Policy and Language Gap
It is time to recognise the artisan economy as an ‘industry’ that is India’s global comparative advantage, especially in low and differently-skilled sustainable production. Policies need to address challenges around taxation, transparency, traceability, and authenticity of products and raw materials, and ultimately investment through public-private partnerships. India needs to promote the artisan economy as the go-to hub for Creative Manufacturing and Handmade (CMH) (PoweredByPeople, 2020) to meet the growing demand for collaborative supply chains and to serve the needs of sustainable marketplaces.

Further, in a country that boasts 22 official languages, linguistic diversity needs to be celebrated and accommodated in business, policy, investment and education. Social protection tools should be regional and hyper-local.

6. Decentralisation Enables Inclusion and Scale
Enterprises in the artisan sector are differently motivated and cannot be retrofitted to meet traditional definitions of growth. Scale is no doubt possible through decentralised collectivisation. A decentralised approach significantly lowers entry barriers for differently skilled communities; especially women. Using technology as an enabler and choosing governance models rooted in co-creation, co-ownership, and transparency, elicits deeper engagement from artisans and improves quality in processes / products.

Thus, innovation ecosystems need to meet the artisans where they are.

7. COVID-19 as the Game Changer
Suspension of in-person exhibitions and craft bazaars, during both waves of COVID-19, caused many artisans and enterprises to shut shop and scale down. However, there has been an unprecedented rise in community-collaboratives and public-private networks that are building critical connected ecosystems that facilitate linkages between people, enterprises, and countries. Most importantly, accelerated digitisation and new approaches for artisan inclusion through channels like video-conferencing, mobile and social media apps, and digital payment gateways are disrupting traditional engagement strategies. This offers an immense opportunity for impact actors to step in and help close the participation gap among informal rural communities.

Way Forward: Taking The Collaborative, Ecosystem Approach

Global supply chains are turning to local and regional players for context-specific sustainable innovation that also creates shared value and shared learning. The artisan economy has an innate ability to drive socio-economic mobility, conscious production, and mindful consumption. Thus, facilitation of global-local, formal-informal partnerships anchored in collaboration and co-creation is an immense opportunity.

Business of Handmade: The core approach to sustainable scale in the artisan economy

There is an urgent need to support intermediaries and ecosystem enablers who take a systemic view and build mutually beneficial linkages. Promoting ‘Handmade as an Ethos’ (as a global call to action) is necessary because it encourages an intentional and actionable shift that transfers agency, power, and capital to local and indigenous communities and represents a slower, pro-people, and pro-nature approach that transcends geographies and definitions.

Business of Handmade is an attempt to bridge the information gaps by taking stock of the diverse attempts made by enterprises in the artisan economy to navigate informality and the models that have found success or failed. The study includes scalable worker-ownership approaches, co-created solutions addressing sustainable production, models that ‘emote’ to those that want to resist the “McDonaldization” of craft. It also presents a uniquely Global South perspective by offering pathways to embed the logic and systems of informal creative cultures into more formal pipelines. Ultimately, it attempts to propose a conceptual reframing of inclusive business practices for the new economy by drawing from the experience of India’s artisan sector.

Business of Handmade is available as a downloadable digital report on www.businessofhandmade.com.

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British Council Creative Economy

British Council Creative Economy

British Council Creative Economy team. We work with artists, entrepreneurs, and creative communities globally to tackle today’s cultural and social challenges.