This report’s objective is to analyze the execution of business models of five artisan-based fashion and home accessories companies in five continents and—through this analysis—to examine patterns for inclusive firm growth.
The research hypothesis is that the firms are highly likely to sustain growth if the firms (a) fulfill high margins capturing value chain (VC) functions; (b) apply strategic management functions in a participatory, inclusive way; (c) do so while responding to important industry trends and d) operate in a minimally acceptable business and digital environment.
The selected artisan-based fashion and home accessories companies are Soko in Kenya and the United States, Artisans d’Angkor in Cambodia, Emilime in Peru and the United States, Selyn in Sri Lanka, and Anou in Morocco.
For this report’s data collection, a two-stage process was used. In the first stage, artisan aggregator companies* were selected on two criteria: the companies (a) had in their associated supplier network at least 150 artisans or microentrepreneurs producing in developing countries and (b) were trading internationally. In the second stage, the team administered a survey to the selected companies in 2016 and analyzed the results. Sales growth figures were collected in 2018.
*Aggregator firms are firms that aggregate many smaller firms, associations, and individual artisans for production.
The Industry Has a Huge Potential for Growth and for Job Generation for Female Producers and Female Entrepreneurs
The analysis shows that the aggregator firms have achieved growth by (a) blending traditional skills with modern, market-oriented design, (b) fulfilling management functions in a participatory way, and (c) using socially and environmentally sustainable production processes and input.
It is notable that three of the five firms were founded by females or are owned by females, and female participation among the artisans working in or with the selected firms is 80 percent. (Weighted by the selected companies’ size of artisan networks.)
The firms’ artisans include women with low formal education and women from marginalized communities.
The share of 80 percent female participation with low formal education and from marginalized communities has been confirmed in a subsequent World Bank Group survey of 40 artisan aggregator firms using the VC and PSMP frameworks.
The 40 artisan aggregator firms that were surveyed represent 25,000 artisans in 35 emerging countries. The latter survey was based on the current study and its methodology, and survey results will be published in a forthcoming World Bank Group report.
The firms’ network size ranges from 150 to 2,500 artisans, and female participation among artisans ranges from 60 to 97 percent, with high growth for the aggregator and the micro enterprises. The artisan-based fashion and home accessories market has the potential to be a large job-generating industry.
Global trends also move towards purchasing that is linked to social and environmental impact of production. Communication with customers about the economic effects of the micro enterprises’ integration into global value chains is therefore a competitive asset for the aggregator firms and an impetus for the micro enterprise to innovate and grow itself.
Weber, Johanna Michaela. 2018. Managing for Growth and Inclusion: Four Levels of Capabilities and a 12 Steps Program. World Bank. Washington, DC.