Alliance Final Report

8/11/2019 Alliance Final Report

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special thanks to:

Partners, Alliance for Artisan Entreprise, Peggy Clark, Karen Gibbs, and Natalie Mundy


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Introduction

The artisan sector is an undeniably large contributor to theglobal economy. Data shows that the artisan industry is oneof the largest employers in developing countries, second

only to agriculture. In fact, artisan crafts provide more thanju st em pl oy me nt , bu t al so ex po rt ea rn in gs , de cr ea se inpoverty, rise in cultural diversity, and skills building andhuman capital investment1.

The Alliance for Artisan Enterprise is a non-profit organizationfounded in November of 2012. Hosted by the AspenInstitute, the Alliance is composed of 27 membe rs from boththe artisan an d retail secto rs. Together, these organization s,corporations, and individuals strive to empower the artisansector to reach their full potential in developing economies

and communities across the globe 2.

A study conducted by UNESCO reveals that small hand-craft enterprises have the potential to increase incomeand employment in developing countries, especiallyfor women3. Moreover, the artisan industry is a growingmarket. Recent data shows that the industry is now worth$32 billion and experiences an 8% growth per year since20024. Unfortunately, the industry still lacks enough formalnetworks to connect artisans with businesses and theirconsumers.

The goal of the Alliance can be divided into four differentapproaches. First, the Alliance strives to raise awareness onthe importance of the artisan sector by promoting economicgrowth, creating sustainable livelihoods, and advancing thewell-being of women in both the public and private sectors.Second, the Alliance intends to communicate the value ofthe artisan industry in preserving cultural heritage. Third,the Alliance aims to provide technical support for artisangroups in order to create long-term markets and ce rtification

standards for artis an products. And finally, the Alliance aimsto create a global network where artisans c an exchange bestpractices and grow their communities.

The Alliance is now looking into the feasibility of creatinga certification system for its members. Certification oa product can help ensure that proper procedures are

employed in social, environmental, or cultural aspects oartisan goods production. Our group provides the Alliancewith key recommendations gathered from the research weconducted.

1. Alliance for Artisan Enterprise, 2012. Bringing Artisan Enterprise to Scale.2. Ibid.3. Noella Richard, 2007, UNESCO. Handicrafts and Employment Generation for the Poorest Youth and Women, p. 27.4. UNCTAD, UNDP Special Unit for Sou th-South Corporation , 2010. Creative Economy Report 201 0, p. 140.

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Research Methods

The objective of our work was to assess the value andviability of a global scale artisan good certification modeland to determine its worth to retailers and artisan partners.

Within the production line of an artisan good, we haveidentified four key players within our scope of research;Artisans, the Alliance, Retailers, and Consumers. We thenseparated our group of eight students into two teams whereone team focused on the artisan-centric spectrum while theother focused on the consumer-centric.

Our areas of inquiry include both primary and secondaryresearch in order to gain quantitative and qualitativeunderstanding. We looked into existing certifications,artisan sector and retail sector data, scholarly publications,

the Alliances reports, conducted surveys, and mostimportantly in-person interviews with both retailers andartisan cooperativ es.

Electronic surveys were sent to artisan groups in Ethiopia,Peru, India, and Mexico, among other countries, and toconsumers here in the United States. Artisans and artisangroups were queried on their opinion of certification, theirhesitancies and/or excitements about it, and what theythought it might do for their business; consumers, on theother hand, were questioned about what impac t certificationmight have on their buying habits. Our interviews on theartisan-centric spectrum consisted of mostly small retailerswho have direct links with artisans in the global South.Some of these links with artisans are strictly business innature, while others had a mission to advance fair trade forthe artisans they work with directly. We have summarizedour findings within the report, broken out into areas wherewe found strong commonalities, and areas where feedbackdiffered within the interview pool.

Interviews with retailers covered a range of businesses andbusiness mod els, from large retailers like Walmart and WestElm to smaller ecommerce and trunk show retailers such asSaSa and Cloth Roads. These interviews focu sed on why thatbusiness got involved with the Alliance, what their thoughtson certification in general were, and how they viewed theartisan sectors particular quirks and potential for growth.Again, we found a very broad range of opinions within theinterview pool, many of which seemed to be influencednot only by the size of the business, but by how directly or

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indirectly they worked with the artisans whose goods theysell.

When considering the appeal of a certification for artisanmade goods from the cons umer side, we decided it was besto hear from a broad range of consumers. A second surveywas conducted through Survey Monkey to reach consumersvia word of mouth, coworkers, and social media sites todiscover what their views of artisan made goods were, andwhether a certification on a product specifically influencesthe likelihood of the consumer purchasing the product. Thesecond part of the survey focused on what factors contributeto the consumer deciding to purchase a product in generalOverall the responses covered a very broad spectrum, with

some expected and some unexpected results. Finally, weasked what the consumers views of artisan made goodswere in terms of quality of the product, and the responsewas resoundingly positive in favor of artisan made goodsThis is positive for the artisan community as it shows thatthere is some cache that artisan made goods carries.Before we further discuss the research and the findings, leus establish definitions of some terminology, below;

Artisan:a worker who is skilled in a trade that especially involvesmaking things by hand in limited quantities; often usingtraditional methods.

Certification:an official approval and documentation system for theverification of a specific product or organization whichreceives the right to use a certification logo that consumerscan see on packaging.

Auditing:a periodic process of conducting an unbiased examinationor the inspection of an individual or an organization accoun tNo logo is granted. Consumers are not necessarily aware othese audits.


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Defining Scope of Work

As previously stated, the main issue that the Alliance teamsought a solution for centered on whether or not the artisansector would benefit from certification or if the greater

need at this point is simply a better support system for theindustry as a whole. Given the few well-structured examplesthat relate to the artisan sector, the team had to rely onextrapolating potential structures from existing, non-artisanrelated models.

The majority of certification systems that operate on aninternational/global scale deal mainly with commodities.Interestingly, the impact of these existing certifications islimited to essentially creating a price floor for the certifiedcommodities, with the end objective being the assurance to

participating farmers that they are getting a fair (or fairerthan they would on their own) price for their goods. Takinginto account the myriad elements that go into a productionline, from various suppliers to individual laborers and howthey are compensated for their work, the Alliance would bepresented with a multitude of unique challenges to thecreation of certification process outside of just wages paid.

Adding to this, fair trade as a system is experiencing amoment of re-assessment, in which its methods are startingto work against it, and in some ways it has b een a victim of it sown success. In Colleen Haights reporting for the StanfordSocial Innovation Review, she documents ways in whichfarmers are not only using the fair trade system to ensurethat they get paid for their goods, but are using it in someways to make sure that they get an above market price foreven their lowest quality goods! She does credit Fair Tradewith greatly raising the level of con sumer awareness aroundthe plight of poor farmers, a success that likely resonatedwith members of the Allianc e for Artisan Enterprise, but findsthat these efforts are beginning to falter5.Also, research done

by individual members of the team found that the marketis getting saturated with multiple brands and certificateslabels, so much so that it has rendered many of the labelsunrecognizable on-sight by most consumers, and unclearlydefined as to how those particular labels intend to impactthe market (see Individual Reports folder for the detailedreport).

Additionally, the members of the alliance run the spectrumfrom mega-retailers like Walmart and West Elm, to smalstartups and non-profit organizations working directly on

the ground with the artisans that they represent. This rangeof business models has naturally created an environmenof competing needs: larger providers like Walmart aremore skeptical of a wide-coverage certification because ofthe way in which it leaves them exposed to a great deaof accountability along many points of the supply chain;smaller producers are more welcoming to it because ofthe potential enhancements it could provide to businessalthough often cant afford to carry out the process.

In order to investigate the feasibility of this model for the

Alliance, the Artisan teams were tasked with conductingsubstantive primary and secondary research. Primaryqualitative research from a retailer perspective was noterribly hard to come by the largest hindrances mainlyinvolved time-conflicts with interviewee schedulesHowever, attempts to directly interview artisan producers many of whom live and work in emerging economiesin other parts of the world were met with significantbarriers, including linguistic differences and lack of accessto technology on the part of the artisans. These hurdlesalso affected the teams ability to collect quantitative surveydata from those actually working in the artisan sector; ouof the fifty groups/individuals that the team attempted toreach, only seven responded. In the end, overall responseswere quite substantive and provided insightful views intothe way in which the many stakeholders in the Alliance viewthe prospect of a certification model.

5. Haight, Colleen. Stanford Social Innovation Review : Informing and Inspiring Leaders of Social Change. The Problemwith Fair Trade Coffee. Stanford Soci al Innovation Review, 2011. Web. 2 Apr. 2014.

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our respondents include: better networking; concernswith costs associated with certification; and metrics forsocial compliance. The differences in responses concerning

certification centered on how much to value traditionaltechniques; and a spectrum of opinions concerning retailversus wholesale , in the realm of sales, with varying nuancesfor each.

C. Commonalities

Some of the respondents were concerned about costsassociated with certification processes. In particular, theyexpressed that artisans who may have quality products toput on the market would not have the financial resources to

be certified. One respondent stated:

I think this will be an obstacle for our communities,because certifications are expensive and they require alot of legal papers. There are many producers that canoffer really good, quality products but still dont havethe ability to get certification. Certifications are usefulonly when the client demands it. There are some casesthat the order is too small, that paying and doing a ll the

pa pe rw or k fo r th e cert if ic at io n on ly ra is es the pr ic e an dat the end, the business doesnt happen.

Another respondent noted that entry into a certificationprocess for artisans is even more difficult compared toproducers of non-artisan goods, as artisan activities aremore income supplemental activities:

Those who need the certification dont have the moneyor capacity to get it entry costs are an impedimentartisan activities are often supplementary income

so ur ce s.

Furthermore, most respondents noted that the artisans theydirectly work with would support and pursue certification, ifits certain that certification would secure more income forthe artisans. One respondent stated:

Ar ti sa ns woul d do an yt hi ng to in crea se sa le s an d woul dbe interested in certification.

Additionally, the majority of respondents expressed thatcertification shou ld be required to have a direct social impact

for the artisans and the general community they operatein. Some respondents expressed the need for metrics tomeasure socially compliant certification. One responden

suggested:I would like to see a good system of metrics thatincorporates local or regional measures for defining an dassessing social compliance as relevant to that region.

Finally, most respondents expressed the need for betternetworking among one another as small artisan retailers,mainly to share best-practices, identify sales opportunitiesand build more partnerships in this sector. One respondentwhen asked about what theyd like to see in a global artisan

certification system noted:

Setting up workshops and forums to share best practicesand metrics.

D. Differences

There were differences of opinion on whether traditionapractices can be compromised in exchange for a hypothet icacertification that would increase sales, wages and pricepoints. For instance, one respondent stated:

Its important to reproduce history and tradition. Wewould not throw art away for the sake of the market.

However, another respondent noted that this could bepossible if it would increase sales. Another respondent alsoindicated they would cons ider such a certification as long asthe decision came from the artisans:

We would often leave such decisions to the artisans

themselves. Artisans would likely prioritize the feedingand education of their children over the preservation ofancient techniques.

Finally, there were differences of opinion concerning thebusiness plans of the respondents between direct salesto individuals or wholesalers. Some felt that wholesalersprovide more support with sales, (mainly due to theiability to buy all the products of the order) and any currentsmall scale models as not being sustainable in the long

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run. However, others felt that increasing direct sales toindividuals was benef icial because theres a tendency for thewholesaler to take advantage of the artisans. Nonetheless,

some who prefered sales to individuals did identify somebenefits with the wholesale business plan, such as lesslogistical problems concerning language and shipping, forinstance.

E. Certification Experts

To enhance our research, we also interviewed a coupleof representatives associated with major certificationorganizations such as Fair Trade Federation and Fair TradeUSA. We particularly wanted to get their insights conce rning

the potential of certification in the artisan sector.

Concerning verification for certification purposes, ourinterviewees expressed the difficulty surrounding auditingfor artisans. One respondent stated:

How do you verify when everyone is spread out? Howdo you measure? It is hard to verify also becausea product may go through several hands, often indifferent locations throughout the producti on chain thatis difficult to monitor.

When asked about what elements of a global artisancertification system they thought would be appealing toconsumers, both respondents suggested storytelling behindthe product. One respondent stated:

Storytelling - connecting to the community who madeit - items with some background hold a different kindof val ue.

II. Retailer Interviews and Consumer Surveys

A. Consumer Surveys

When considering the appeal of a certification for artisanmade goods from the cons umer side, we decided it was besto hear from a broad range of consumers. We conducteda survey via a website called Survey Monkey to reachconsumers via word of mouth, coworkers and social mediasites to discover what their views of artisan made goodswere, and whether a certification on a product influencesthe likelihood of the consumer purchasing the product. Intotal we were able to reach 100 people, 78% female and22% male. The median age range in responses was 21

40, while also receiving a large number of responses frompeople ages 51-60. When the survey respondents wereasked how many gifts they had purchased for themselvesor others over the past month, 70% answered between 2-5gifts with a price range between $20-$60 dollars, with 42%topping out at $40 dollars for their purchase. This is veryuseful information when targeting what price points to haveartisan groups target to achieve a broader consumer range

The second part of the survey focused on what factorscontribute to the consumer deciding to purchase a productWhen the consumer was asked what aspect of a product ismost influential when deciding to purchase a product, thequality of the product, appearance, and price were chosenby the consumers as the most influential, followed by theproducts purchasing convenience and brand reputationWhen asked what social issue would spark the most interestwhen considering purchas es, the response was in support oall the social issues equally. There was no one social issuethat sparked the most interest, leaving us to conclude thatconsumers are motivated by products that have a socia

conscience, leaning towards their own particular interestsbut varied by individual with no clear overwhelmingresponse in one area. This conclusion is favorable to theartisan market as artisan made goods support of a widerange of social problems including the empowerment ofwomen, impact on local economies, and the promotion offair working conditions.

When asked if a certificatio n influenced their pu rchase, 63%answered that a certification did influence their purchase

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Here are a few quotes from our survey.

If comparable I would prefer fair trade

Id rather buy something fair trade and withoutchemicals. I cant always do so for monetary reasons.If I dont know company background, it helps bring itto my attentionI always purchase fair trade if comparable or better

pr od uc tIt doesnt, mainly because I dont trust the organizationsWhen in a rush and i dont have time to research a

pr od uc t, th os e la be ls he lp me ma ke fast er de ci si on s inthe moment. Otherwise i wont buy anything at all.Yes but only slightly because there is such a range of

those types of certifications. Also, sometimes I feel likethey are only put on there to enhance sale-ability andnot necessarily identify a better product. (Better beingmore authentic/better for the environment or localeconomies)

Finally, we asked what the consumers views of artisanmade goods were in terms of quality of the product, andthe response was resoundingly positive in favor of artisanmade goods. The surveyees responded by saying that 65%felt artisan made goods are of a higher quality than massproduced goods . 32% felt that artisan made goods were of asimilar quality, and only 3% responded that the products wereof lower qualit y. This is positive for th e artisan community asit shows that there is some cache that artisan made goodscarries. The most encouraging outcome of the survey camefrom the response to the question, would you be willingto pay more for a product that is affiliated with a positivesocial outcome? 86% of consumers surveyed respondedthat they would be willing to pay more for thos e items, mostagreeing that $10 dollars more was a reasonable amount.

This provides the Alliance with the information that there isa market of interested consumers willing to pay more forartisan made goods because those goods are addressing aparticular social issue.

B. Retailer Interviews

Our Retailer interviews covered a spectrum of large, small,and e-commerce partners. Some have very close connectionto the artisans or work direct ly with the artisan groups , while

others are a bit more removed and the artisan sector mayonly be one part of their larger business.

While some of those groups interviewed seemed to be infavor of exploring certifi cation, there was little consensus onmoving forward with it in practice. It was also clear that thecloser the retailer or cooperative was to the artisan groupthe more interested they were in a certification processTwo key things to keep in mind if moving forward with acertification:A few of our interviewees admitted they were confusedabout the requirements and benefits of certifications heldfor them. Fair Trade was one certification that was broughup a few times as something that was cumbersome to sift

through. Second, How was the Alliances certification go ingto be different from existing certifications? In order for theAlliance to justify it s own certification it would have to bringsomething different to the table, or else it would be lookedat as redundant and overloading the market with anotherconfusing label.

When asked to define Artisan and Handmade theresponses varied, confirming that even a certification ohandmade and artisan product could be a difficult spec trumto get consensus towards depending on the product andregion. Its also clear that some artisans would be happy togrow their business and this may change the way they dobusiness possibly making a handmade label even moredifficult to define.

Our interview with Walmart, West Elm and Nest led us toa discussion about auditing versus certifications. Nest haalready established a very scalable auditin g process for theiartisans. Nest could be used as a model for developingartisan group audits. West Elm does have a model tha

they use for larger suppliers, but does not believe thattheir artisan groups are ready for audits or certificationsyet. Walmart also agreed, that many other issues had tobe tackled before the artisans were burdened with anaudit or certification process. Audits were preferred ovecertifications because an audit is ongoing process andrelationship with an supplier. An audit is not a PR riskthe way a certification label can be. For instance, an audisays that the auditor visits the group often and approve theworkplace on a certain date in good faith that until the nex

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audit. If something goes wrong, the problem can be fixedor the supplier can fail and lose their rights to produce fora time period. With a certification , it something happens

at a certified supplier, the entire leg that the certificationstands on is no longer valid. Its much harder to explain toa consumer why the certification is a fraud versus nevermentioning the audits to the consumer, but being proactiveto help achieve better practices.

But the biggest concerns to pursuing a certification camedown to manpower and cost and viability. Would thepotential increase in sales really justi fy cost of a certification?Where would these artisans get the money upfront? All ofthe smaller retailer and cooperatives were concerned with

how much they would have to change their current businesspractices to be able to obtain a certification . Many of thesebusiness already find themselves understaffed.Across interviews, however, all parties expressed interest inthe Alliance as a valuable to ol for network, resource shari ng,and idea gene ration.

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Research outcomes

Throughout our research process, there are threepossibilities moving forward that keep coming up in bothartisan and retaile r groups. These are Certification, Auditing,

and Network Collective. To better understand these topics,we have mapped out the positive and negative implicationsinvolved.

A. Certification

Our research reveals that certification increases the value ofa product, especially for consumers. Certification providesmotivation for consumers to purchase the product, resultingin an increase in sales. Moreover, it also addresses socialissues by ensuring that proper business practices are being

observed. This could include fair wages, healthy workenvironment, just labor conditions, or other positive socialimpacts.

On the other hand, certification lacks artisan support.Because of the tedious certification process and the costinvolved to be certified, certification does not seem like aviable option for smaller artisan groups. Their investmentin the certification process it not guaranteed to provide areturn. It would also be difficult to implement the sameprocess in various regions of the globe and there is still alack of successful working models. As of now, certificationfor artisans, especially smaller businesses, lack the properfoundation.

B. Auditing

Auditing differs from certification in the sense that it isnot marketed to sell the product, but done as a businesspractice to ensure that standards were met in the product ionprocess.

Our data reveals that stakeholders believe that the processis not affordable and very difficult to implement. Moreover,the standards necessary to meet a proper auditing processwould be too difficult to maintain in different regions.Auditing also lacks in i ncreasing a product s retail value, nordoes it increase profits , according to stakeholders opinio ns.

However, artisans expressed support for auditing. Ourresearch shows that the industry believes that auditing

addresses social issues that ensure proper practices arebeing observed. There are existing structures of auditingmodels that prove to be successful. These can be replicated

by smaller artisan groups in due time, provided theyreceive technical assistance and have access to the rightechnologies.

C. Network Collective

Establishing a networking collective was met with the mostpositive response based on our research. It is an affordableand easily implementable option. It also lends value to aproduct and may be implemented in different locationsglobally. It creates a central collaborative that membe

groups can rally around and use as a resource. Moreoverit offers a connection point for member organizations, whocan benefit from one anothers experiences, skills, andconnect artisans to retailers.

The only downside to establishing a network collective isthat it doesnt create as strong of an impact as certificationor auditing. In terms of branding and packaging, the wordsvouched for is not as credib le as certified. It is also a lessdirect mode of impact and could be difficult for groups withlittle technological infrastructure to get involved in.

This however, is the strength of the Alliance. As anestablished network of artisan and retailer organizationsworking towards enabling the artisan sector, the Allianceis able to capitalize on connecting their members, sharingbest practices, and making information readily available tothose who ne ed it.

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Group Recommendations

Our research has lead us to some recommendations thatwe would like to present to the Alliance as next steps. Inregards to the initial question of should the Alliance certify

artisan made goods?, our collective response is - not rightnow. We believe that, while a certification has value andcould be a direction to inves tigate in the future, the Allianceand its members would not benefit from the complicatedprocess of certification at this juncture. The Alliance is anorganization looking to serve and support artisans, andimplementing a certification at this point would furthercomplicate and burden th e artisan business es. Also, judgingfrom our research within the retail sector, there was nooverwhelming consensus that a certification would increasethe marketability or purchasing incentives.

Although we feel that a certification system in not the rightchoice for the Alliance at this point, we do feel that theAlliance is poised to do many great things for the artisansector and have come up with some ideas to make theprogramming offered to the artisans stronger. Building astrong and active network is something that all artisanssurveyed communicated was a definite need. They wantedaccess to a network of people who do simil ar work, and havesimilar struggles. They all felt that it would be beneficial tobe able to share ideas, best practice s, and concerns with thenetwork. We recognize that networking is something thatthe Alliance already focuses on, and our research reinforcesthe fact that this aspect of the Allianc es presence is a valuedone. The creation of a strong network of artisans globallycould also create a base for which an audit ing or certificationprocess could be launched at a later date.

A second thing that we thought the Alliance could do tosupport artisans at this stage of the Alliances growth couldbe to create what we have termed an Growth Model toolk it.

In surveying and interviewing artisans another responsethat was shared by almost everyone was the struggle tocreate and manage a business in a successful manner.Although the artisans are skilled in their trade, they areinexperienced in the practices of running and managinga business. We thought that the creation of such a toolkitwould be favorable to the members of the Alliance, andcould be distributed upon entering into the membership.Things that could be included in the toolkit are policies andpractices in regards to fair wages, management, employee

rights, and workplace cultu re to name a few. By providing theartisans with a toolkit on how to manage the business thathey are working to create, the Alliance would be providing

a valuable service as well as education.

Going further, the concept of business mentorsh ips came upin our discussions of how the Alliance could serve artisansWe thought that another valuable layer to the existingnetwork that the Alliance inherits cou ld be the connection osmall business owners to artisans. The Alliance could recruitsmall business es from the US or abroad to be mentors to newartisan operations. Through their relationship, the businessowner could guide the artisan to establish best practicesin conducting a business, provide support, and also help

the artisan to make smart decisions in their own ventureFurthermore, the Alliance could create opportunities fothe artisans and retailers to directly communicate with oneanother.

Two ways in which we thought some next steps could beaccomplished: regional trade shows, or yearly conferencesTrade shows could be a great way for the artisans of aparticular region to network, build contact s, and display theiproducts to the retail world. The Alliance could invite theiretail partners such as West Elm and Walmart , and reach outo other similar-minded companies and invite them to seewhat the artisans have to offer. There is growing potentiafor artisans to make contacts that would grow their busi nessas well as the retailers to make a human connection to thesocial responsibility they are marketing in their stores. Thesecond idea of a yearly conference is so that artisans cancome together and learn from retailers on topics aroundbusiness and product management. A company such asWest Elm could host conferences in particular locales andoffer the artisans of that region an opportunity to learn

about what large retailers are looking for, and how theartisans could best utilize the tools to grow their businessBoth of these ideas also speak to the networking aspectof the Alliance, as well as provide artisans with necessarybusiness knowledge to further grow their business.

Finally, our last recommendatio n for the present state of theprogramming offered is to think about creating a brand forthe Alliance. Our research has s hown that the brand, be thaorganic or fair trade, is a powerful too l to use in sending

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a message to consumers. In order to communicate that anartisan is a member o f the Alliance , a brand could be createdfor all members to utilize in packaging and marketing.

Branding could also be a tool the Alliance uses to establishthemselves as a leader in advocacy for artisan enterprise.

We as a group have had lengthy conversations aboutwhat would be the best next steps for the Alliance. Therecommendations we have made are the most prudent andfeasible considering the limitations facing the Alliance andthe Artisan sect or. That is not to say that we are rej ecting theidea of certification altogether, but instead have providedfurther considerations for a desirable outcome.

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Considerations for the future

Certification is an inherently complex process. It requirestight coordination, trust, accountability channels, liabilitycontrols, skilled l abor, travel, compliance with national laws,

intellectual property law, etc.

In our investigation into the feasib ility of a certification seal,we discovered a number of barriers to certification whichare specific to the artisan field. We believe that a moretransparent, integrated, peer to peer network could workto begin dissolving these barriers and pave the way for asmoother and more effective certification process.

We realize that a lack of Internet access remains a barrierto effective participation in an online Artisan-NGO-Retailer

network. However, it is no secret that global Internet access(especially for rural village s) is expanding dramatically. Withthis barrier naturally dissolving over time, such a networkwould naturally grow as more rural members gain webaccess. In the meantime, improvisation techniques couldbe used to gain sporadic or temp orary access to the network(such as a delegate from a collective or village periodicallytravelling to a larger town to access the net).

Excellent peer-to-peer models of organizational affiliationalready exist online, such as the Namati Network. Anotherviable model which addresses issues more specific to theartisan sector is Good World Solut ions. The Alliance for ArtisanEnterprise already has enough active members with Inter netaccess to make such a tool worthwhile - and at low cost.This would be the ideal platform for implementing capacitybuilding initiatives, branding efforts, and for launching anaudit or certification system. An integrated network of thisdesign would open channels of communication betweenmembers, and they would no longer rely on the Allianceas the primary conduit for communication. The Alliance

would shift into more of moderator role, but would still ho ldthe only administrative privileges and use the network todistribute its messages and materials.

The network would serve to mitigate many of the barriersto certification raised by our research, and could guide theprocess in a more collaborative and participatory way. Many

of the deterring issues are surmountable, and the networkwould be an excellent tool for attempting to overcome theissues discussed below.

A. ArtisansInhibiting overhead costs

The costs of sending an external audit team to check onartisan collectives or production centers is high. This istrue for certification in general, but is especially true forartisans of the global south because they are often locatedin difficult to reach rural places (high travel costs for auditteams), and are often working as individuals or smalgroups (diseconomy of scale). In addition to certification

costs being particularly high for the artisan sector, manyrural artisans have no savings and depend upon their entireearnings to survive - making the overhead costs associatedwith certification of goods/facilities impossible to pay, andthereby excluding those artisans most in need of increasedincome.

A more integrated communication network could open thedoors to audit methodologies which could lower the costpaid per artisan/collective (moving towards an economyof scale). If artisans could better communicate with oneanother, they could coordinate audit tours where acertification body could certify a string of collectives atonce, rather than being deployed to audit a single facilityThis would reduce the costs of travel, lodging, planningand man hours required for each members certificationFor the network to effectively function (and not requirean immense effort by the Alliance) it would need to havepeer-to-peer communication channels (artisan to artisancommunication) . This would allow artisans to groupthemselves for audit tours, divide costs in a way which suits

them, and coordinate payments to auditing bodies (or theorganizations which deploy them).

A peer-to-peer network could also allow for pre-certifi cationefforts from one artisan collective to another. As a termor condition for certification, an artisan collective couldbe required to perform one (or more) pre-certifications

6. Pingdom. Worlds Internet Population has Doubled in the last 5 years. April 19, 2012

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of nearby collectives or production facilities. This pre-certification would provide on-site counseling from thosewho have already undergone certification, and would help

collectives make the necessary preparations for an audit.This could serve to lower audit failure rates, reduce theamount of time (money) the auditing group needs to spendon site, and avoid expensive repeat-visits and setbacks. Ifa collective seeking certification doesnt have adequateinternet access, a pre-certifier could also provide themwith our suggested Growth Model Toolkit and guide themon the implementation of its components (HR-Workplaceculture, employee rights, skillbuilding, best practices, etc).

Fears that sales/margins wont increase

In the cases that artisan groups do have access to adequatecapital for certification, they often fear that this money willbe wasted. They have a general feeling of uncertainty aboutwhether certification will actually boost their revenu e stream- they havent been presented with compelling proof.

The integrated communication network could help torelieve these fears of the unknown. If retailers of artisangoods were also participants in the network, and couldcommunicate directly with artisan collectives, this woulddemonstrate to artisans that there are companies willingto buy their products if they become certified. This visualconfirmation of increased sales potential will help dissolvethe take our word for it leap of faith which artisans arecurrently expected to make. Furthermore, if paymentcoordination were available through the network (potenti allyusing cryptocurrency to avoid national currency exchangecomplications), this would further reassure artisans thatthey would have access to new revenue streams, and thatthe money is not being wasted.

With the overhead costs of cer tification reduced , the fears ofwasted money relieved, and the accessibility to certificationguides increased, then artisans and collectives would likelybe more willing to take the plunge and embark upon thepath towards certification.

Perception that Certification is Complex, Confusing, orTedious

Our interviews demonstrated that all actors believe thecertification process to be cumbersome . This assumptionacts as a deterrent to artisan participation. We believe tha

the open sharing of certification criteria, best practicesand step-by-step guides to compliance could help educateartisans on exactly what theyd be expected to do. Thiswould allow them to make an informed decision about acertifications feasibility, rather than deciding based ona preconceived notion that certifications are inherentlydifficult.

B. Certifying OrganizationsLack of in-depth knowledge of national laws &frameworks

The idea of creating a global scale artisan goods certi ficationsystem means that the certification would be operating inmultiple countries with vastly diverse laws. Without an indepth knowledge of the legal frameworks, tax codes, tariffslabor laws, and other relevant legislature regarding theartisan sector in each country, the certification would be arather blunt tool.

A more integrated network where artisans, collectives, probono legal counselors, and government representativescould build and access a library of relevant nationaframeworks would be instrumental in overcoming legal andbureaucratic hurdles.

Certification bodies arent the only ones who need tounderstand these frameworks; artisans need to know howto legally run small businesses and navigate tax codes, andretailers need to know how to avoid legal infractions andreduce their liability.

Lack of cultural understandings and practices

A major issue facing socially oriented certifications are thecultural discrepancies of artisans across the world, andmore importantly - cultural differences between (generallywestern) consumers of these goods and the artisans whomake them. For example, child labor is generally consideredby western consumers to be an inherently bad thing, andmany consumers express the desire for a certificationsystem which ensures that child ren are not used in the labo

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force. However, in a village where children traditionallybegin helping their parents at age 12, the prohibition ofa child from participating in the family business would be

perceived as oppressive and culturally insensitive by theartisan community.

Therefore, a one-size-fits-all (countries/regions)certification is not effective and increases the risk ofbecoming a westernized prescription for socioeconomicdevelopment; which is geared towards soothing the mindsof global consumers than in aiding artisans and preservingcultures. Bearing in mind the nature of this culturalheterogeneity, a fully global certification system wouldneed to have regionally flexible components or variations.

A flexible certification seal would be a vastly more complexundertaking than a uniform seal. Despite this, it may be theonly choice because a global-scale & universally-applicablecertification in the artisan sector is simply not feasible.Although a sophisticated networking apparatus would notbe able to bridge cultural divides, it could begin to identifywhich certification components are appropriate for whichcommunities, and begin to formulate a more flexible anddynamic system upon which a global certification might bebased. However, the simple act of creating a dialogue onthis issue is a far cry from the implementation of an effect iveflexible system.

C. RetailersConcern for dependability of production stream

Many artisan goods retailers, especially mega-retaile rs whichare considering entering the artisan sector, are concernedabout dependability. These concerns are varied and includeconcerns that artisans might: have insufficient production

capacity to meet large orders, be unreachable for altering/cancelling/or otherwise changing shipment amounts, havepayment problems, use antiquated and inefficient paymentmethods, or disappear with the money without sending thegoods.

An integrated network could serve to relieve many ofthese concerns. A full profile for network members coulddemonstrate the artisans production capacity (minimum/maximum order size), payment methods available, and

provide a dependable and direct communication channelA system of feedback and commentary could demonstrate agood track record for artisans, and could relieve many of the

dependabili ty fears which serve as a psychological deterrenfor trust between retailers and hard to reach artisans.

Accountability Fears

Many of the retailers (especially the larger ones) have fearsthat they face high levels of accountability for scandals andfailures of a certification seal. In a quote from an interviewwith Wal Marts senior director of international trade, SarahThorn, as soon as someone finds a single child stitching asoccer ball the whole thing (child-labor free certification)

goes out the window. This refers to the disproportionatedamage which can be done to a certifications reputationby a singular infraction. Retailers fear that such scandalswill discredit the certification in the eyes of the publicbecoming a waste of time and money.

The Alliance could use the integrated network tool to helpaddress these fears. It could take photos of artisan worenvironments and post them on the networks forums. Iretailers are able to see first hand the facilities which areconsidering certification (or have been certified) this canserve to reduce these worries. It should be noted, howeverthat these pictures would not replace the nee d for an officiaaudit.

In addition to images, the network could host auditdocuments and progress reports for aspiring and certifiedartisan groups. This increased level of transparency wouldhelp retailers to fee l as if theyre not flyi ng blind anymoreand would construe purchases from certified collectives asless risky - hopefully enough to engage in trade.

Additional Barriers not adequately addressed by astronger network

Although we found that a more innovative network seemsto be the most feasible and effective next step to take, therewere a number of issues or impediments to certificationwhich such a network would not help to address. Thefollowing issues warrant serious consideration for theAlliance when deciding if and how to pursue a certification

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Political and Economic Volatility

Countries or regions which have re-occurring civil wars,

political struggles, or other disruptive symptoms of civilunrest pose a substantial problem to a global certificationsystem. This raises a number of questions which should beaddressed, such as:How would audits be performed in con flict zones? How couldartisans and retailers be protected from hyperinflation?(Possibly by trading in cryp tocurrency, however those can bevolatile as well.) What kind of emergency logistical supportcould be offered to keep operations running smoothly intimes of crisis?

Multi-step Production Processes & Multi MaterialProducts

Many of the successful certification seals have been gearedtowards commodities. Commodities, like coffee, aresomewhat easily certified because they generally are grownon one farm and are a singular material like coffee beans.The artisan sector is inherently differen t because its productscan be more complex. If a portion of a production processtakes place at one location, and the remainder at another,this makes certification more challenging . Additionally,many artisan goods contain multiple materials. Tracingsupply chains becomes exponentially more difficult asdifferent material types are introduced into the productionprocess. How could these added complexities be adequatelyaddressed?

Flooding of Certification Seals

The world of certifications is expanding dramatically. It isdifficult for consumers to keep track of the multitude of

seals appearing on products. This multitude of seals is whatwe refer to as a flooded market, and it devalues all of theexisting certifications. The Alliance should bear in mindthis issue before deciding to add an additional seal to analready saturated market.

Non Habitual Purchasing Patterns

In comparing artisan buying to commodity buying, we see

a distinct difference in buying patterns. When a consumerepeatedly and routinely buys the same product, aspects othat purchase (including the identification of a certificationseal) become ingrained in their habits. Artisan goods, onthe other hand, may experience a lower recurring purchaseincentive. There is also a limited number of artisan productswhich any one would likely to purchase more of from anyone given market. The consumer surveys did report a highenumber of repeat purchases than anticipated (2-5 items pemonth), however, it may not be enough to subliminallybrand a logo into the consumers perception.

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CONCLUSION

Through interviews and surveys, we have gained significantinsight on what artisans need and what consumers arelooking for. There is a market for artisan products, and

this is something the industry needs to tap. In order todo this, artisans require technical support and networkingopportunities to learn more about how to run theirbusinesses. Our recommendation is that certification couldbe advisable in the future, but right now, the Allianceshould focus on providing opportunities for networking, HRsupport, and branding.

The Alliance is the perfect platform to connect artisansand retailers, share best practices in the industry, andinformation on branding. Moreover, the artisan industryhas potential to Ibe tapped. The Alliance can enable theartisan industry to capitalize on this opportunity and ownthe market for artisan goods.

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Bibliography

Alliance for Artisan Enterprise. Bringing Artisan Enterprise to Scale. 2012http://www.aspeninstitute.org/sites/default/files/content/images/AAE_OnePager_FINAL_0.pdfHaight, Colleen. The Problem with Fair Trade Coffee. Informing and Inspiring Leaders of Social Change. Stanford Social

Innovation Revie w, 2011http://www.ssireview.org/articles/entry/the_problem_with_fair_trade_coffeePingdom. Worlds Internet Population has Doubled in the last 5 years. April 19, 2012 http://royal.pingdom.com/2012/04/19/world-internet-population-has-doubled-in-the-last-5-years/Richard, Noella. Handicrafts and Em ployment Gen eration for the Poorest Youth and Women. UNESCO, 2007UNCTAD, UNDP. Creative Economy Report. Spec ial Unit for S outh-South Corporatio n, 2010

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Appendices 23

APPENDIX 1: Artisan Survey Results

APPENDIX 2: Artisan and Retailer Interview Notes

APPENDIX 3: Consumer Survey Results

APPENDIX 4: Additional Brainstorming: Untested Ideas for Consideration


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APPENDIX 1,2,3, and 4 AS IS PLACE AFTER THIS PAGE.

Alliance Final Report

Documents

Transcript of Alliance Final Report