The Case for Handmade

Silvia C. Rivera, Southern Methodist University, Undergraduate
Eva Szalkai Csaky, PhD, MSF, Engaged Learning Mentor
Hunter & Stephanie Hunt Institute for Engineering & Humanity in
Lyle School of Engineering at
Southern Methodist University
Dallas, Texas
2

Abstract
Handicrafts or artisanal goods have a significant potential for social impact, both in terms of
the income they generate and the cultural traditions they help preserve. This report explores
the global artisan sector, its potential for impact and the challenges and opportunities for
realizing this potential. From the definition of artisanal activity to its importance for poverty
alleviation to the various challenges and opportunities faced by artisans, businesses and other
sector stakeholders, this report concludes with a brief case study of the DFW market for
artisanal goods, attempting to put to the test ideas set forth herein on the global artisan sector
and the key opportunities that may point the way forward.
3

What are Handicrafts?
The terms handicraft, handmade, and artisanal all refer to products made by skilled workers
using minimal technology and equipment. According to the International Trade Center (ITC)
these products include clothing and accessories, decorations, household items, gifts, toys, and
stationary. 1 Given the continued lack of national and international trade recognition for
handicrafts, however, there is still no code for handicrafts in the World Trade Organization’s
“Harmonized Commodity Description and Coding System” despite efforts by the ITC and
UNESCO. A more detailed definition of handicrafts is necessary to illustrate the unique value of
these products as distinguished from non-handmade goods. 2
According to UNESCO, “the special nature of artisanal products derives from their distinctive
features, which can be utilitarian, aesthetic, artistic, creative, culturally attached, decorative,
functional, traditional, and religiously and socially symbolic and significant." 3 Another expert
defines handicrafts as produced by a “type of activity in which economic, technical, productive,
commercial, social, aesthetic and cultural elements of great complexity are involved.” 4 This
expert goes on to distinguish them from serial, industrially produced goods noting:
It is not about…maintaining the production of handicrafts at a technological
backwardness that requires an unnecessary human effort. What happens is that,
as with the sculptor who carefully handles his gouge for cutting just enough to
achieve the form he has imagined, or the painter who moves his brush gently to
avoid the impression of hair left on the stand, handicrafts require a very close
link between man and object. It is this link which gives special attributes to
handicrafts, making them emotional, human. Sometimes this character is
expressed through mistakes or imperfections as with the so called naïf painting
or with carvings and objects that do not show the exquisiteness of academic art
or the perfection of the industrial object, but which enjoy a grace and ingenuity
that make them attractive.
Simply put, handicrafts occupy a unique space between art and function, creativity and
efficiency, humans and machines that distinguishes them from non-handmade goods. As a
result, though not necessarily opposed by definition to the use of new tools, methods and
equipment for production, there is an important reason why manufacturing has not entirely
4

eplaced the handmade production of goods. A great source of value (market and other) for
handicrafts continues to rest on their remaining primarily handmade, and is one of the reasons
why individuals from across the world have for generations continued to buy and make
artisanal goods.
Finally, as for the “culturally attached” and “cultural elements” mentioned in these and most
definitions of handmade goods, handicrafts are also often—though not always— uniquely
associated with the cultures in which they are produced, adding again to their value and
distinguishing them from non-handmade goods. After hundreds of years of making certain
crafts and the passing down of specific production designs and techniques, many artisanal
products that can be purchased today are infused with the cultures of their artisans. They
represent an important source of cultural heritage for various nations and nationalities
worldwide, and for this reason are both supported by UNESCO’s intangible cultural heritage
efforts and continuously sought out by travelers and tourists around the world. 5
Potential for Impact
Still, in the words of Japanese poet Kobayashu Issa, “and yet, and yet…” the value of
handmade reaches far beyond the value of the products themselves. The artisan sector is the
second most important source of livelihood after agriculture for the global poor, meaning that
artisanal products produce income for some of the poorest people in the world. Moreover, an
overwhelming majority of artisans in the developing world are women, meaning that the jobs
and income generated by artisanal products have the potential to empower women and the
communities in which they live. Third, given the unique cultural component of many
handmade goods and the often-traditional use of sustainably sourced raw materials,
handicrafts also have the potential to preserve cultural heritage, empower ethnically
marginalized communities, and promote sustainable methods of production.
According to a market assessment conducted by USAID, the artisan sector is the second
largest source of livelihood in the developing world. 6 For this reason alone, the sector has
received considerable attention from USAID, the World Bank, the United Nations and various
governments, nonprofits and other NGOs focused on international development and poverty
alleviation. As an essential source of secondary income behind agriculture, handicrafts not only
5

provide much needed work to people living in extreme poverty, but also serve as an important
source of income diversification in times of droughts, floods and lean harvests—an important
feature in the wake of rapidly changing climates. 7 Furthermore, development experts also
point to the fact that handicrafts, as opposed to agriculture, are typically a less capitalintensive
investment for both artisans and development organizations; relying less on
technology, infrastructure and equipment and more on existing skills and available raw
materials for production, in addition to not requiring ownership of land and allowing artisans to
work from home.
The fact that the majority of artisans are women has likewise not escaped the attention of
development experts and those most committed to ending extreme global poverty. A number
of well-known studies have pointed to the importance of investing in women for poverty
alleviation, not only because they represent the majority of the world’s poor, but because they
have also been found to reinvest up to 90% of their income earned back into their families, as
opposed to 30-40% for men. 8 9 Ultimately these investments, primarily in the form of income
spent acquiring “food, healthcare, home improvement and schooling for themselves and their
children,” find their way into entire communities, as these women’s families become healthier,
safer and better educated. Continuing this virtuous circle, and counterbalancing the research
demonstrating how much more difficult it is for women than men to find and keep decently
paid work, is that thanks to social dynamics and the heavily communal nature of most
artisanal work, women often recruit other women to work on handicrafts, as demonstrated by
the prevalence of all-women artisan communities, associations, and cooperatives.
Advocates of handicrafts as a method of poverty alleviation also point to some additional
sources for social impact. As noted in the previous section, many handmade goods contain a
key cultural component and form an important part of the intangible cultural heritage of
various nations. According to UNESCO, however, poverty, globalization and mass production,
environmental and climatic pressures, shifting tastes, urban-rural migration and simply the fact
that many craft traditions involve community “‘trade secrets” that disappear when younger
members cannot be made interested, are all factors that contribute to the potential loss of
cultural heritage in the form of handicrafts. 10 As a result, investing in artisans—and not,
UNESCO distinguishes, in preserving specific handicraft objects—is another way in which
handicrafts can be used for social impact, particularly in the case of indigenous and ethnically
marginalized communities whose intangible cultural heritage is thought to be especially at risk.
6

What is more, these marginalized communities can also benefit greatly from the economic
impact brought on by handicrafts in the form of increased jobs and income.
Lastly, though there is a need for more research into the potential environmental impact of
sourcing from artisans at scale, some experts argue that investing in handicrafts has the
added potential of promoting more sustainable methods of production. Artisans tend to rely
heavily on the availability of raw materials for their crafts, and as noted by one expert, have
been recognized for “their creative use of natural resources and concern for conservation and
replenishment.” 11 This expert cites one particular case of an artisan from Santa Catarina de
Ocotlán, Oaxaca in Mexico who, while teaching a class to other women artisans on traditional
dry-cleaning, warned:
I only recommend the use of these sensitive plant organisms (association of an
alga and a fungus) after checking that there are plenty of them and also that
people understand the importance of lichens in the forest. I must say that I use
them there because they are of no use for these people, they even consider
them a pest…once they saw the beautiful orange color that was obtained and
that they do not have to use fixatives to get it, they liked very much the idea to
use them for coloring. I emphasize to them very emphatically that they should
not cut the lichens unless they are found in dead wood or in the wood to be
burnt. I am confident that this will be so because the female artisans are
sensitive and intelligent about things of life and nature.
For those who have interacted with communities living in close proximity with nature and who
depend greatly on its well-being, this Mexican artisan’s concern for the environment should
come as little to no surprise. And yet it is also important to highlight the creativity and
resourcefulness of artisans who in urban areas around the world continue to make creative
use of available low-cost materials like trash and recycled goods, as noted by this study of
12 13
Latin American artisans and others in Southeast Asia and Africa.
7

Global Market:
Size and Key Players
Handicraft’s potential for impact is significant, primarily as a method of poverty alleviation but
also as a way of empowering women and other marginalized communities and promoting
sustainable methods of production. Similarly, the global market for artisanal goods, valued at
over $32 billion per year, is also significant—though not without its issues. Namely, the global
market is still vastly understudied in terms of size and key players. It is therefore necessary to
precede any discussion of the market’s greatest challenges and opportunities by attempting to
draw out the global market for artisan goods with approximations of its size and key players.
The UN Conference on Trade and Development (UNCTAD) has estimated the global market for
artisan goods to be worth over $32 billion per year. 14 According to UNCTAD, developing
countries are responsible for approximately 65% of this trade, making it one industry in which
they hold a leading market position. Also encouraging are UNCTAD figures on market growth
rates, which show that developing country exports more than doubled between 2002 and
2008, increasing from an estimated $9 billion to $21 billion. What is more, these measures
proved 2008 to be a particular source of optimism for the artisan market, which was able to
increase its export revenues “even as global demand plummeted and international trade
contracted by 12 percent in the wake of the global economic crisis.” 15
These figures—especially the estimated size of the market—have been and continue to be
widely used by a number of international development organizations and artisan non-profits,
NGOs, and businesses. It is important to note, however, that it has now been a decade since
many of these organizations have updated their estimates from the first international trade
figures in 2008. Also important to note is a disclaimer by UNCTAD itself on these measures, in
which it highlighted the difficulty of presenting first-hand figures on the handicrafts market
due to the lack of an official code for classifying handicrafts and the largely informal nature of
the sector. This is of course also largely true for national handicrafts estimates, where despite
government and NGO efforts developing countries continue to struggle to collect accurate data
on the sector.
8

A 2007 UNESCO handicrafts study, for instance, calls attention to the significant size but also
the need for better data on the global artisan sector. The study contains several positive
market estimates for handicrafts in countries like Colombia, Tunisia, Morocco and Thailand,
but a closer look demonstrates the need for more (and more accurate) data. The method used
to size Thailand’s handicraft sector, for example, was to estimate the number of artisans
employed (2 million informally and 1 million formally) by extrapolating from a general
employment survey. Meanwhile in Colombia, figures for the yearly income provided by
handicrafts ($400 million) and yearly handicrafts exports ($40 million) were provided, while
both Morocco and Tunisia used a percentage of GDP (19% and 3.8% respectively) to measure
the production of handicrafts. While these measures ultimately succeed in demonstrating the
importance of national handicraft sectors to developing countries and help make the case for
the importance of the global sector, there is a clear need for more frequent, detailed, and
standardized market estimates.
As mentioned by the UNCTAD in its flagship estimates, however, the act of measuring the
global market for artisan goods becomes decidedly more difficult when attempting to replace
rough estimates with accurate data from its often intricate and informal value chains. As a
result, a number of studies have been carried out on artisan value chains by those aware of
handicrafts’ economic value and potential for impact. Much like market estimates, these
studies remain few and far between, but taken together help paint a more complete picture of
the sector and its key players.
In 2006, USAID conducted what remains one of the few publicly available global handicrafts
market assessments. 16 1 The assessment focuses specifically on artisan home accessories and
décor, but enriched with data from country-specific value chain studies that include
information on other artisanal goods like clothing and accessories, it allows for the
identification of a handful of global sector key players. The following is an outline of these
artisan sector key players using information from the USAID assessment and country-specific
value chain studies from Guatemala, 17 Senegal, 18 Madagascar, 19 India 20 and Namibia. 21 For
1
Technavio is a niche market research firm and has released the two most recent global handicrafts
market assessments. In 2015 they published “Global Handicrafts Market 2015-2019” and have just
recently followed this report with “Global Handicrafts Market 2018-2022.” Although neither report is
publicly available, press clippings from the first Technavio report are. Some insights from these
clippings will therefore be included in opportunities section of this report.
9

more information on the value chain studies used to identify and describe artisan key sector
players, detailed value chain graphs can be found in the appendix.
Input Suppliers are the farmers, ginners, spinners and other actors that supply the
necessary raw materials to artisan producers. Most of these suppliers, with the exception of
large-scale suppliers such as industrial spinners and textile treaters (dying, printing, etc.) in
the case of cotton and textile inputs, for instance, are small-holder producers themselves. As a
result, there is a great need for more research on market linkages between them and artisans,
especially as these relate to the need for more accessible organic and international grade
inputs for the international trade of artisan goods.
Producers are the individual artisans and artisan producer organizations that create
handicrafts. They include weavers, carpenters, metal workers, bead workers, embroiderers,
knitters, designers, and a number of other skilled and creative manual workers. The majority
of artisans in developing countries are rural, home-based, and tend to work independently or
in small groups, sometimes organizing themselves into producer organizations such as
cooperatives and associations. In most cases, artisans must source and design their own
crafts, and both can present a challenge to artisans who want to upgrade their products and
operate above the subsistence level but lack the capital, capabilities, and market insights
necessary to scale production. As a result, many artisans will organize themselves into
producer organizations such as cooperatives and associations in order to enhance productivity
and gain access to markets, as well as additional resources and services such as workshops,
market information, trainings, working capital, and social funds in the case of illnesses and
emergencies. There are several issues, however, associated with artisans and producer
organizations, and the majority of handicrafts research focuses on these key players.
Wholesalers are the intermediary buyers and sellers of handicrafts. They include buying
agents, artisan brokers, and exporters and importers, and they serve several important
functions that help artisans gain access to local, regional, and international markets. For many
rural and remote artisans unable to organize themselves into producer organizations,
wholesalers such as buying agents and artisan brokers provide the only method of selling their
crafts to markets. Oftentimes, these wholesalers also provide invaluable embedded services
including communication, payments, quality control, shipping, packaging, procuring raw
materials, and transmitting design information for artisans, retailers, and end consumers.
10

Retailers are the final link in the value chain connecting artisans to consumers. These include
mass retailers, department stores, internet retailers and independent retailers—a catch all
term used by the USAID market assessment for small retailers, tourist shops, art galleries,
museum stores, coffee shops, and others. Typically, end markets for handicrafts produced in
developing countries can be divided into national exclusive, national popular, and international
markets. Despite some countries’ success with handicrafts exports, the majority of artisanal
goods sold are currently spread out through a large number of independent retailers servicing
national popular and exclusive markets, highlighting the difficulty for artisans and artisan
producer organizations to scale production to the levels necessary for retailers linked to global
value chains—value chains which, according to UNCTAD, are now responsible for 80% of
global trade. 22
Governments are identified by several artisan market and value chain studies as key
stakeholders in their national handicrafts industries. Though not directly involved in artisan
value chains, many developing-country governments have taken an interest in realizing the
economic value and impact potential associated with the promotion of artisans and their
goods. As a result, efforts to support handicrafts have been initiated by governmental
ministries responsible for areas such as national trade, tourism, SME development, and
culture. These efforts include helping artisans with questions of production capabilities,
management techniques, licensing, environmental protection, international trade shows, and
even organizing their own worldwide fairs to showcase artisanal products. It is important to
note, however, that despite an apparent interest in supporting artisans, many studies still
point to significant government shortfalls, such as confusion over ministry budgets and
responsibilities, lack of transparency, lack of beneficial policies such as tax exceptions, lack of
financial support, and many others.
Enabling organizations encompass all other non-government stakeholders who lie outside
of the artisan value chain but are deeply interested in realizing the social and economic
potential of national and international handicrafts markets. They include small and major
international development organizations, charities, non-profits, impact investing funds,
academia, and others, and they have led a number of important efforts to empower artisans
and promote the handicrafts sector in developing countries. Among these efforts have been
capacity building programs, research studies, artisan sponsorships to international trade shows
and conferences, and many others. As noted by a study of Jordan’s handicrafts market,
11

however, enablers in the artisan sector have often played such uniquely active roles in
supporting artisans and their related value chains that they have effectively entered into these
sectors themselves. According to the Jordan study, for instance, “some NGO’s…have played a
major role in developing this sector in Jordan by initiating income-generating projects in rural
areas…taking two roles, of which one is to help generate income and employment, and the
second is to act as entrepreneurs.” 23
Global Market:
Issues and Barriers
A brief look at the global market for artisan goods and the related value chains of artisans in
developing countries already reveals some of the issues preventing the handicrafts sector from
reaching its full potential. The focus of most handicrafts market studies, a fair amount of
research exists detailing the barriers preventing artisans from reaching markets. These
studies, however, are largely case-by-case studies of specific countries, regions, and
communities, and there is still a great need for systems-level research on the key issues
impacting artisans and handicraft markets everywhere. Similar to the method used to identify
key artisan stakeholders, the following is a distillation of the three key issues and barriers of
the artisan sector—aggregation, information, and finance—based on handicrafts studies from
Guatemala, India, Mexico, Senegal, and Namibia as well as on findings from small-holder
producer literature on agriculture. 2
Aggregation is a term that has been used in recent literature on small-holder agriculture to
identify one of the main challenges preventing small farmers from accessing global value
chains. 24 Given the many parallels between small farmers and artisans in developing
2
There are number of barriers preventing artisans from gaining access to markets, and this number
absolutely exceeds three. In a recent study of the Indian handicrafts sector, however, one author
poignantly notes “not much has changed since [1947] for the handicraft sector. Even today, the most
important problem or the single most important reason behind most of the problems of the artisan
community is reflected in the fact that the word artisan has no precise definition. This shows how
underestimated this sector remains and how undermined is the potential of this sector in making any
significant contribution to the economy.” In other words, there are typically a few key issues to which
many others can ultimately be traced. The lack of formal definitions and market estimates for
handicrafts identified earlier is one, and this report has attempted to identify only the key others.
12

countries—and the fact that many of the same families whose primary source of income is
agriculture also participate in the artisan sector—small-holder agriculture literature may hold
some valuable macro-level insights currently missing in handicrafts research. An expert on
small-holder farming and international development writes, for instance, that
one of the key challenges policymakers, the development community, and
agribusinesses face… is small-holders’ limited formal organization (“producer
organizations”) that aggregate their production and demand for goods and
services in order to enable more effective market participation (“aggregation”).
Only 5-10% of farmers globally are estimated to participate in formal producer
organizations. This is despite the fact that such organizations have been
supported by both policymakers and the development field as a way of tackling
poverty and addressing market failures.
Much like those seeking to use producer organizations to empower small farmers and leverage
agriculture for poverty alleviation, development experts in favor of handicrafts have long
supported artisan producer organizations. Artisan cooperatives and associations have been the
focus of many studies and promoted as a means of aggregating production and demand and
providing artisans with much needed information flows and embedded services. And yet, much
like agriculture, handicrafts studies note repeated problems experienced by artisans organized
into cooperatives that have prevented such aggregation from ultimately succeeding. As one
Guatemalan study notes, “fraudulent, opportunistic and rent-seeking behavior” by cooperative
leaders has often led to distrust and made horizontal cooperation difficult. 25
Similarly, vertical cooperation and value chain participation as a means of aggregating demand
and supply has also been supported by handicraft studies, although decidedly less so than
horizontal cooperation and artisan cooperatives. As mentioned earlier, wholesalers often
provide important embedded services such as quality control and shipping as well as market
information on buyer tastes and demand. Yet negative attitudes towards intermediaries
abound, perhaps being even more prevalent than those towards cooperatives, in that artisans
prefer more direct access to customers and often lack sufficient knowledge regarding the
value chain actors above them, leading them to suspect intermediaries of inherently
opportunistic behavior because of their higher position in the value chain. 26
Markets rely on the flow of information, and while there is no such thing as a perfect market,
the artisan sector faces huge barriers in terms of access to information. For one, access to
13

accurate and timely data on consumer tastes, value chains, and various distribution channels
is extremely difficult to obtain for many artisans. Nowadays, the best source of information on
rapidly changing consumer tastes is conveyed along efficient value chains led by global
retailers with market research capabilities and access to a large number of consumers. Without
access to this “insider” information, artisans, artisan organizations and small independent
retailers are limited in the markets they can target with their products, and must rely on less
valuable “outsider” knowledge from what they can observe with limited internet access or from
local tourist and domestic markets. What is more, without access to accurate information on
value chains and possible distribution channels, artisans are even more limited in their ability
and willingness to enter into such “insider” information relationships with wholesalers and
retailers, further barring them from valuable information.
Relatedly, accurate information on artisans and their production capabilities is also difficult to
access for other actors in the market. When a buyer doesn’t know what to expect from
artisans in terms of quality, design, production capacity, and delivery, they may perceive
significant transaction costs—not to mention risks—that prevent them from entering into
purchasing agreements. In another study of artisan cooperatives in Oaxaca, Mexico, for
instance, one author notes the competitive advantage that providing market actors with
information brought to one cooperative (Teotitlin) over another (Society):
Society members do not lack skill or motivation, and the textiles produced in the
village are virtually identical in quality and craftsmanship to weavings produced
in Teotitlin. Yet skill and commitment to success don't necessarily allow Society
members access to the export market network. The group's greatest failure
continues to be its inability to break Teotitlin's control of the flow of information
between producers and foreign business interests and to convince potential
buyers of the benefits of working in Santa Ana. 27
In this example, it becomes clear that artisans’ ability to provide other actors in the market
with information on themselves can be just as important as the ability to obtain information on
the market. This is not only because providing this information can lead to more and better
purchasing agreements for artisans, but also because repeated purchasing agreements could
lead to artisans’ eventual integration into more efficient value chains, thus improving their
access to market information. What is more, as noted in the previous section on the global
market for artisan goods, access to information on the market itself is a significant macro level
14

concern for the sector and can create barriers for informing smart policy and driving
investment.
Finally, access to finance is one of the most widely cited barriers keeping artisans from
markets. Although the production of handicrafts is not necessarily capital intensive, most
artisans still need access to adequate working capital in order to produce labor-intensive crafts
and continue production as they wait on payments (often late) from wholesalers and retailers. 3
What is more, in order to make the upgrades necessary to scale, capital investments must still
be made in terms of new tools and equipment, business management and training, third party
design information, sample production, and investments in international grade inputs. In the
case of Guatemalan weavers, for instance:
switching from the back-strap loom to the foot loom is the most significant
process upgrading opportunity. However, the initial investment required to
purchase the foot loom is so high that it is cost-prohibitive for most MSEs. The
only financial services that MSE weavers can access are small lines of credit from
input suppliers or cash and in-kind advances of working capital from their buyers.
In fact, while the firms that buy from MSEs may be willing to extend short-term
working capital to their many suppliers, these buyers are not usually in a position
to tie up large amounts of capital in numerous risky, long-term loans. 28
Like a number of artisans in the developing world, and a large portion of MSEs in general,
Guatemalan weavers are significantly restricted by the lack of credit and investment options
for growing their businesses. Value chain finance for handicrafts as it stands is currently
insufficient for artisans who seek to produce beyond the level of subsistence, and there is a
great need for more research beyond current microfinancing schemes as to more creative,
effective and sustainable ways to invest in artisans and realize the untapped economic and
social potential of the sector.
3
This problem increases with participation in global value chains (GVCs). GVCs typically pay with
considerable delay, as opposed to small local buyers or traders. It is therefore very difficult to
participate in GVCs without access to finance. To make matters worse, without strong formal contracts
with a reputable counterparty (i.e. a GVC), it is very difficult to get access to finance.
15

Global Market:
Key Opportunities
The challenges facing the global artisan market are significant. As a result, key stakeholders
aware of the sector’s potential for impact and unrealized economic value have led a number of
capacity building programs to empower artisans and help boost the sector. As noted by the
Artisan Alliance, an initiative of the Aspen Institute and an international development partner
of the U.S. Department of State, however, these efforts have largely been met with mixed
results in that “building capacity across product development, market access, and business
development requires a diverse and intricate set of skills and aptitudes. Like the artisan
enterprises themselves, artisan support organizations are often small, work independently of
each other, and are not well-funded or recognized.” 29
Is there another way to enable both artisans to more easily access markets and the
handiworks sector to realize its potential? What would be a solution that not only empowers
individual artisans but also seeks to address the market failures that lead to their exclusion
from global value chains?
The Inclusive Economy Ecosystem (IEE) is a new theoretical framework for promoting
inclusive economic development designed by two experts in international development and
environmental sustainability. The model was created as a response to what the authors
perceived as the immense potential of recent private, public, and non-profit solutions to solve
some of the world’s most pressing social, economic and environmental challenges—including
“market-based, climate-smart inclusive solutions, social entrepreneurship, and base-of-pyramid
strategies”—and yet the failure of most of these solutions to achieve impact at scale. 30
According to IEE authors, a new model for multi-stakeholder collaboration is necessary in
order to achieve scalable and transformational impact. Through extensive research on recent
models, solutions, and best practices, they have identified three key stakeholder groups—
corporations, entrepreneurs, and enablers— with the potential to propel inclusive economic
growth through holistic solutions designed across stakeholder groups. The IEE model,
therefore, provides a way of re-thinking the artisan sector’s key stakeholders and their roles
16

for achieving scalable impact and the inclusive market transformation needed for the sector. 4
In an effort to highlight the greatest opportunities for handicrafts going forward, the remaining
section explores the most promising opportunities for entrepreneurs, corporations, and
enablers to tackle the sector’s challenges while also leveraging broader changes taking place
in global markets.
Within the IEE model, entrepreneurs are the MSE artisans, artisan associations, wholesalers,
and retailers who produce artisanal goods or buy directly from artisans. In recent years, a
particular model of artisan entrepreneurship, the artisan social enterprise, has gained a lot of
traction in global markets. Namely, these entrepreneurs have been able to capitalize on
shifting consumer trends such as increases in “conscious consumerism,” online shopping, highend
markets, and the demand for “cultural goods, uncommon souvenirs, and indigenous art”
fueled by a rise in tourism. 31 32 There has also been great diversity in the specific business
models (including sourcing, product design and marketing strategies) employed by
entrepreneurs in this space, which may hold promise to begin reinventing current relationships
between artisans, cooperatives, wholesalers, and retailers.
Realizing the importance of the knowledge being generated by these entrepreneurs’ innovative
businesses models, the Artisan Alliance has made efforts to recruit artisan social enterprises to
become Alliance member organizations. They currently list over 100 of these entrepreneurs
across 150 countries as members, though online search reveals the emergence of hundreds
more of these over the past 15 years. 33 While it is necessary to note that entrepreneurs
continue to struggle with the classic issues of the artisan sector—namely access to financing,
aggregation, and access to market information—their increasing success in competing with
non-handmade retailers speaks to their improving ability to link artisans to markets. This is
evidenced by recent efforts from retailers like Nordstrom and Niemen Marcus to partner with
artisan entrepreneurs like Soko and Akola, as well as the ability of entrepreneurs like Akola to
expand their models and begin scaling their businesses.
Next, corporates can be thought of as the large retailers and corporate clients that have the
ability to buy, market, and sell artisanal goods in large quantities to a wide base of consumers.
Another defining attribute is an expansive, well-organized value chain that they control, and
4
For a graphic describing the original IEE model and the manner in which it was applied to the global
artisan sector, please refer to the Appendix: Inclusive Economy Ecosystem Model.
17

some examples include large retailers like Niemen Marcus as well as large corporate clients,
like hotels, who exhibit demand for décor and gift shop items. As evidenced by recent
partnerships with social enterprises, corporates are starting to realize the value of
incorporating artisans into their value chains. By sourcing unique, quality goods from artisans,
for example, corporates can increase the competitiveness of their products and invest in the
reputational capital necessary to succeed in an age of conscious consumerism and corporate
social responsibility (CSR).
Despite some promising efforts on behalf of retailers like Nordstrom and Niemen Marcus,
however, there still remains ample room for corporates to take more significant advantage of
the opportunities presented by sourcing from artisans; ranging from fast-fashion retailers like
Zara to luxury retailers like Gucci. Zara, for instance, currently sources from artisan workshops
in Portugal for its labor-intensive embroidered items, while Gucci has continued the Italian
luxury tradition of sourcing from master artisans in Italy. 34 35 Both have succeeded in
incorporating small artisan producers into their massive supply chains and can leverage both
this experience and their size to work towards expanding their models into other areas,
particularly those where there is demand for the unique skills and production capabilities of
artisans.
Finally, enablers are the governments, NGOs, IGOs, nonprofits, impact-investing funds,
academic institutions, and other non-value chain actors that are invested in the success of the
artisan sector. According to the IEE model, enablers can also be described as the “sometimes
hidden entities that introduce technologies, foster relationships, disseminate knowledge, and
perform other critical functions for collaboration.” 36 In this sense, while enablers have been
able to do some important work in terms of capacity-building and artisan empowerment, a
much more long-term focus is needed to remove the barriers preventing collaboration
between entrepreneurs and corporates. A study of Madagascar’s artisan sector notes, for
instance:
Handicraft-related programs sponsored by international development agencies
have helped Malagasy artisan producers to improve the quality of their products
and the efficiency of their business operations. At the same time, however, these
programs have suffered from their short-term scope, poor coordination with
other stakeholders, ineffective advertising, and focus on a small number of
artisan producers. 37
18

For many enabling organizations, this may simply mean the opportunity to reframe and
refocus current efforts. Enablers have the opportunity, for instance, to focus more energy on
continuing to develop a more formal enabling environment for the artisan sector. They can
promote standardization of industry codes and definitions, establish quality control institutions
and procedures, conduct better market estimates, discover sustainable mechanisms for closing
finance gaps, and create regional databases of input suppliers, artisans, producer
organizations and wholesalers. This process can take place alongside current efforts to provide
artisans with general access to technology and education, as well as capacity-building in terms
of production and management upgrades. Given the lack of recent impact-focused market
assessments, they can also implement efforts to capture and disseminate knowledge being
generated by corporate and social entrepreneurs in the artisan market.
As set forth by the IEE model, however, a key for the success of the artisan sector going
forward must be holistic solutions based on multi-stakeholder collaboration. A notable example
of this has been Kate Spade’s recent experiment with an internally-developed social enterprise
model for sourcing from artisans. In a report notably titled, “A Social Enterprise Link in a
Global Value Chain: Performance and Potential of a New Supplier Model,” researchers describe
how Kate Spade was able to leverage its CSR department to establish a separate social
enterprise allowing it to source efficiently from women artisans in Rwanda. 38 Though still in its
early stages, the venture has already produced some impressive results for the women in
Rwanda and positive (albeit premature) results for Kate Spade’s business. In this case, Kate
Spade was able to apply some of the innovative strategies employed by artisan social
enterprises but with fewer constraints on capital and market access. Critically, Kate Spade
engaged with enablers in the form of nonprofits for supporting functions in their social
enterprise as well as academia to complete the study on their new sourcing model.
Local Market:
The Case of DFW
The global artisan market represents a world of opportunity for those looking to create value
and empower artisans. The Dallas Fort-Worth metroplex (DFW) is home to several such
entrepreneurs who have succeeded in their mission to leverage the value and impact offered
19

y handmade goods, each with a unique business model and approach to the opportunities
and challenges presented by the market for artisan goods. The following is an overview of the
results from interviews carried out with three different DFW entrepreneurs that work with
refugee artisans and artisans from developing countries.
This study was able to identify nine DFW businesses and organizations that work with artisans
in developing countries and one organization that employs women refugees in Dallas. The
methodology for finding these entities was primarily online search and word of mouth, and the
difficulty of this exercise demonstrated the disjointed nature of the local artisan sector. Of the
ten businesses and organizations, three accepted an invitation to participate in this study,
which consists of one online questionnaire and one in-person interview. 5
In terms of demographics, the organizations interviewed consisted of two non-profits and one
social enterprise. They had been operating from 8 to 20 years, and had earned between
$500,000 to over $1,000,000 in revenue the previous year. They worked with between 16 to
500 artisans from Latin America to Africa to Dallas, and all of the artisans they employed were
women.
As for organizational motivation, empowering artisans was ranked as extremely important to
all organizations, while only one organization ranked celebrating arts and culture as a primary
motivation. Artisanal work was a primary source of income for almost all of the artisans that
these organizations worked with, and the organizations worked with women in both rural and
urban areas. In terms of end-markets, most of the products that they sold were sold to
customers in either DFW or the U.S., and these customers were described as both “affluent”
and “average.” They reported sales to final consumers, sales to retail outlets and storefronts,
markets and events, and online sales were all ranked as important sales channels.
Following the questionnaires, an interview was conducted with each entrepreneur regarding
their experience in the handicrafts market, the services their organizations offer to artisans,
and the greatest challenges and opportunities facing their organizations. Each business model
was different, and they each had their own unique experiences in the market, but some
common themes emerged in the answers.
5
For questionnaire and interview questions, please refer to the Appendix: DFW Case Study Questions
20

For one, each began as a small-scale operation and demonstrated high levels of innovation
and flexibility throughout their entrepreneurial journeys. Each entrepreneur had set out, for
instance, to empower just a few women living in poverty and in need of dignified work. One
entrepreneur was inspired upon discovering the sewing talent of one of their clients and set
out to help her sell handicrafts, later recruiting other artisans. Another had come across many
instances of women with bead-working skills in their initial endeavors and later set out to
recruit and train other women in this trade. Finally, another entrepreneur had interacted with
artisans living in remote areas and was compelled to help them access the market. Only one
entrepreneur had prior experience in the retail and fashion industry, but all three now run
successful artisan businesses, helping to empower hundreds of artisans. All were agile
organizations that learned and adapted as they grew and were highly in tune with both the
needs and skills of their artisans and the demands of consumers in global markets. Because of
these characteristics, they actively engaged in product marketing and development.
Next, each had experience offering additional services to the women from whom they sourced.
Financing was the most common service, and entrepreneurs were creative in their financial
engagement with their artisan clients, going beyond just purchasing their crafts. Village
savings loans, individual and community grants, and equipment buy-backs were offered to
artisans. Entrepreneurs also offered business workshops and partnered with other non-profits
to offer additional social services.
As for the greatest challenges facing their organizations, a definite theme was clear. Despite
the unique challenges presented by sourcing from artisans, including the need to provide
additional services and pay fair prices for labor-intensive products, sourcing handmade was
not viewed as a setback for entrepreneurs in the market. Instead, these unique challenges
were met by entrepreneurs with drive and innovation, fueling both their determination and the
unique value of their products. Rather, what seemed to concern entrepreneurs most was what
concerns any business: supply chain efficiency, sales growth, capital, wholesale margins,
inventory management, and marketing were all cited as challenges. Notably, only one
organization was concerned with traditional artisan techniques disappearing, but all appeared
optimistic about their future ability to source from artisans.
Finally, a few common themes emerged regarding the entrepreneurs’ successes, and each saw
various opportunities for continued growth. One important success shared by the three artisan
entrepreneurs was their ability to partner with other organizations—including other artisan
21

entrepreneurs, non-profits, and even a local university—for product development, social
services, and data collection. In terms of future opportunities, the entrepreneurs saw the
opportunity to enter new markets, develop their product lines, employ more artisans, and
begin realizing efficiencies that could lead to lower price points. Most importantly, the
entrepreneurs all saw continued opportunities to empower more women artisans, not only to
succeed as creative and skilled workers, but also to continue their transition out of poverty and
pursue their business aspirations.
Conclusion
The case for handmade is strong. Handicrafts occupy a unique space between art and
function, between creativity and efficiency, and yet the value of handmade goes far beyond
the value of the products themselves. As the second largest source of livelihood in the
developing world, handicrafts have the potential to empower some of the world’s poorest
people—the majority of them women—providing essential work and income, empowering
women, and uplifting communities. In terms of market value, recent figures estimate the
global market for artisan goods at $32 billion per year. While this does not mean that the
sector lacks challenges—issues with aggregation, financing, and information flows continue to
create barriers between artisans and global markets—it implies that there is ample opportunity
to capitalize on handicrafts’ significant economic and social potential for impact. Currently,
there exists a fair amount of research on the challenges of connecting artisans to markets, and
important work has been done in terms of capacity-building for artisan businesses, but much
more research is needed in terms of opportunities to help the sector realize its potential.
Namely, more research is needed into the recent efforts of corporates and artisan
entrepreneurs to exploit market opportunities and empower artisans, as well as the potential
link between artisan production and environmental sustainability.
22

Appendix: Artisan Value Chains
Figure 1: Global “Handicraft Market Channels”
Figure 2: Madagascar “Importing Structure and Distribution Channels”
23

Figure 3: “Guatemalan Textile Handicrafts Value Chain”
Figure 4: Senegal “Value Chain for Artisan Textile Sub sector (Current)”
24

Figure 5A: India “[Rural Cooperative] Retailing for Handicraft Cooperatives in Kerala”
Figure 5B: India “[Rural Isolated] retailing for Handicraft Cooperatives in Kerala”
25

26
Figure 6: Namibia “Value Chain for Artisan Textile Sub sector

Appendix: Inclusive Economy Ecosystem Model
Figure 1: Original Inclusive Economy Ecosystem Model
Figure 2: Applied Inclusive Economy Ecosystem Model
27

Appendix: DFW Case Study Questions
Artisan Organization Questionnaire
Artisanal products have significant potential for social impact, both in terms of the income they
generate and the cultural traditions they help preserve. This survey is part of a broader
research effort, of which the main objective is to better understand the global market for
artisanal products, the related value chain, and the market failures faced by artisans and the
organizations they work with.
As a reminder, you have a full right to privacy (see consent form), and for each question there
is the option to select “n/a” for information that you do not know or wish not to disclose. Only
the researchers involved in this study will see the information. If the results of this study are
published or otherwise presented to others, your name will not be used.
This questionnaire should take no longer than 15 minutes; we appreciate your time.
1. My artisan organization has been running for approximately ___ years
2. My artisan organization can be best defined as a
o Charity organization
o Non-profit organization
o For-profit business
o Social enterprise
o N/a
3. Celebrating arts and culture is one of the main motivations of my artisan organization
o Not at All
o Very Little
o Somewhat
o To a Great Extent
o N/a
28

4. Empowering artisans is one of the main motivations of my artisan organization
o Not at All
o Very Little
o Somewhat
o To a Great Extent
o N/a
5. Artisanal work is the primary source of income for the artisans my organization works
with
o True
o False
o N/a
6. Women make up approximately_______ of the artisans my organization works with
o None
o Less than half
o Half
o More than half
o All
o N/a
7. My organization works with approximately ________ artisans
8. The artisans my organization works with mainly work in _____ locations
o Urban
o Rural
o N/a
9. My organization mainly works with artisans in
o One community
o Few communities in the same geography
o Many communities in multiple geographies N/a
10. My organization’s products are mostly designed by
o Artisans
o Artisans, with the help of my organization
o Artisans, with the help of a hired third party
29

o A hired third party
o My organization
o N/a
11. Most of my organization’s customers can be best described as
o Affluent
o Average
o Thrifty
o N/a
12. Most of my organization’s customers can be best described as
o Male
o Female
o N/a
13. Most of my organization’s customers’ age can be best described as
o Late teens
o 20s and early 30s
o late 30s and 40s
o 50s and 60+
o N/a
14. Most of my organization’s customers are based in
o D/FW
o Texas (excluding D/FW)
o U.S. (excluding Texas)
o Other/international
o N/a
15. Most of my organization’s artisan products are sold
o Online
o Storefront, owned
o Storefront, shared
o At markets and events
o N/a
16. . Most of my organization’s artisan products are sold
o To other businesses
30

o To individuals
o N/a
17. My organization employs approximately____ people (excluding artisans)
18. My organization’s annual sales revenue is approximately
o Under $100K
o $100K- $500K
o $500K - $1M
o $1M+
o N/a
19. My organization is aware of the existence of the following organizations
o The Alliance for Artisan Enterprise
o The International Folk Art Alliance
o Ethical Fashion Initiative
o Impact investing funds (any)
o N/a
Artisan Organization Interview
Introductory Script:
Artisanal products have significant potential for social impact, both in terms of the income they
generate and the cultural traditions they help preserve. This survey is part of a broader
research effort, of which the main objective is to better understand the global market for
artisanal products, the related value chain, and the market failures faced by artisans and the
organizations they work with.
Specifically, this interview seeks to gain a deeper understanding of the needs and experiences
of DFW organizations that work with artisans in developing countries, and it will be used to
identify the common barriers and opportunities faced by the DFW artisanal goods community
in order to understand how to better empower and serve it.
By participating in this interview, you are not only helping create a body of knowledge on a
very important and understudied topic in international development and poverty alleviation,
but are also contributing to a specific effort to empower DFW artisan organizations like yours
and the artisans they serve.
31

As a reminder, you have a full right to privacy (see consent form), and for each question there
is the option to select “n/a” for information that you do not know or wish not to disclose. Only
the researchers involved in this study will see the information. If the results of this study are
published or otherwise presented to others, your name will not be used.
The entire interview should take no longer than one hour, and I really appreciate your time
and participation.
Q1: What is your organization’s “story”?
Q2: What services has your organization offered to artisans so far?
Q3: What have been the greatest successes of your organization?
Q4: What have been the greatest challenges faced by your organization?
Q5: What are your organization’s top three long-term aspirations?
Q6: What are your organization’s top three concerns for the future?
Q7: Tell me more about your artisans’ top three strengths/success(es).
Q8: Tell me more about the top three challenges faced by your artisans.
Q9: What, if any, has been your experience with each of the following types of events?
1) networking event with other artisan organizations and potential investors/buyers
2) artisan innovation workshop on strategies for leading an effective artisan business
3) artisan market held at a university to promote and sell products
32

Works Cited
1
Dunn, E., & Villeda, L. (2005). Weaving Micro and Small Enterprises into Global Value Chains.
The Case of Guatemalan Textile Handicrafts. Microreport, 31, 35.
2
Harmonized Commodity Description and Coding Systems (HS) (Classifications, Commodity
Codes, Commodity Description, HS, HS code search, WCO). (n.d.). Retrieved March 02, 2018,
from https://unstats.un.org/unsd/tradekb/Knowledgebase/50018/Harmonized-Commodity-
Description-and-Coding-Systems-HS
3
Richard, N. (2007). Handicrafts and employment generation for the poorest youth and
women. United Nations Educational, Scientific and Cultural Organization UNESCO, Paris, 4.
4
Benítez Aranda, S. (1999). Latin American Handicrafts as a Factor for Economic, Social and
Cultural Development: Handicrafts by the Light of the New Concepts of Culture and
Development. Revista de Cultura y Desarollo, United Nations Educational, Scientific and
Cultural Organization UNESCO, 6-8.
5
Intangible Cultural Heritage. (n.d.). UNESCO. Retrieved March 02, 2018, from
https://ich.unesco.org/en/traditional-craftsmanship-00057
6
Barber, T., & Krivoshlykova, M. (2006). Global market assessment for handicrafts. United
States Agency for International Development.
7
Richards, N. (2007).
8
Turning promises into action: Gender equality in the 2030 Agenda for Sustainable
Development. (n.d.). Retrieved March 02, 2018, from http://www.unwomen.org/en/digital-
library/publications/2018/2/gender-equality-in-the-2030-agenda-for-sustainable-development-
2018
9
Yoo, T., & Cisco Systems Inc. (n.d.). Why women make the best tech investments. Retrieved
March 02, 2018, from https://www.weforum.org/agenda/2014/01/women-technology-worldeconomy/
10
Intangible Cultural Heritage. (n.d.). UNESCO. Retrieved March 02, 2018, from
https://ich.unesco.org/en/traditional-craftsmanship-00057
11
Benítez Aranda, S. (1999), 10.
33

12
Milgram, B. (2010). From trash to totes: Recycled production and cooperative economy
practice in the Philippines. Human Organization, 69(1), 75-85.
13
Okot-Okumu, J. (2012). Solid waste management in African cities–East Africa. In Waste
Management-An Integrated Vision. InTech.
14
UNCTAD, UNDP (2010). Special Unit for South-South Cooperation: Creative Economy Report
2010-Creative Economy: A Feasible Development Option, 140.
15
UNCTAD, UNDP (2010), 126.
16
Barber, T., & Krivoshlykova, M. (2006).
17
Dunn, E., & Villeda, L. (2005).
18
USAID (2006). Artisan textile value chain Senegal: analysis and strategic framework for subsector
growth initiatives. United States Agency for International Development, Aid to Artisans.
19
Ashamu, C. et al (2005). Made in Madagascar: Exporting Handicrafts to the US Market. Final
Report.
20
Vadakepat, V. M. (2013). Rural retailing: Challenges to traditional handicrafts. Journal of
Global Marketing, 26(5), 273-283.
21
MTI (2016). Growth Strategy for Namibia’s Handicraft Industry and Associated Value Chains.
Ministry Of Industrialization, Trade And SME Development.
22
80% of trade takes place in ‘value chains’ linked to transnational corporations, UNCTAD
report says. (2013, February 27). Retrieved April 02, 2018, from
http://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=113
23
Mustafa, M. (2011). Potential of sustaining handicrafts as a tourism product in Jordan.
International journal of business and social science, 2(2).
24
Csaky, E. (2014). Smallholder Global Value Chain Participation: The Role of Aggregation
(Doctoral dissertation), 4.
25
Dunn, E., & Villeda, L. (2005), 28.
26
Dunn, E., & Villeda, L. (2005), 26.
27
Cohen, J. (1998). Craft production and the challenge of the global market: An artisans'
cooperative in Oaxaca, Mexico. Human Organization, 57(1), 79.
28
Dunn, E., Sebstad, J., Batzdorff, L., & Parsons, H. (2006). Lessons learned on MSE
upgrading in value chains. USAID, Washington, DC.
34

29
Alliance for Artisan Enterprise (2012). Bringing Artisan Enterprise to Scale. The Alliance for
Artisan Enterprise: The Aspen Institute.
30
Csaky, E., & Clark, A. (2018). The Inclusive Economy Ecosystem. Unpublished.
31
Barber, T., & Krivoshlykova, M. (2006), 7.
32
Global Handicrafts Market 2015-2019. (2015, December 02). PR Newswire, p. PR Newswire,
Dec 2, 2015.
33
Current Members. (n.d.). Retrieved March 20, 2018, from
http://www.artisanalliance.org/member-network/
34
Ghemawat, P., & Nueno, J.L. (2006). Zara: Fast Fashion. HBS No. 9-703-497. Boston, MA:
Harvard Business School Publishing.
35
HBS (2001). Gucci Group N.V. (A). HBS No. 9-701-037. Boston, MA: Harvard Business
School Publishing.
36
Csaky, E., & Clark, A. (2018).
37
Ashamu, C. et al (2005).
38
Soule, E., Tinsley, C., Rivoli, P (2017). A Social Enterprise Link in a Global Value Chain:
Performance and Potential of a New Supplier Model. Georgetown University Women’s
Leadership Institute, Georgetown University, Washington, DC.
35