Crossing the Digital Divide: Opportunities to Scale Impact in the Artisan Sector

R.I.S.E. Artisan Fund invited Hedvig Alexander, co-founder of Powered by People, and Priya Krishnamoorthy, founder and CEO of 200 Million Artisans, to share their perspectives and recent research on opportunities in the artisan sector. Their conversation focused on the best ways to use digital technologies to scale the sector and create greater economic opportunities for artisan producers.

Hedvig Alexander’s company Powered by People is a wholesale digital marketplace that connects artisan producers with buyers around the world. Powered by People provides productivity tools to help handmade and artisan enterprises operate more efficiently, and offers purchase order financing to enable these enterprises to scale production. “Most financial institutions still require quite traditional collateral to lend people money, and the people in our sector don’t have that,” she explained. “They don’t have a car or a house or anything they can give as collateral. So, we base it on their ability to produce. We take them through due diligence and if we believe in them as producers, we finance them.”

Priya Krishnamoorthy’s company 200 Million Artisans initially launched as a volunteer-based initiative to provide COVID relief to artisans when production centers and workshops were closed in 2020, but then it quickly evolved. 200M Artisans now works to accelerate growth for craft-led enterprises, building partnerships and closing the knowledge gap for artisan enterprises in India. “I think our strength really lies in the fact that we can collect data, we can analyze data… and help people in the ecosystem tell their stories better,” she said. “The first thing any funder will tell you is ‘give us data…Tell us that the sector is scalable.’ We realized that somebody had to take on this role, because the enterprises don’t have the bandwidth.” 

200M Artisans recently completed Business of Handmade, a research project sponsored by the British Council, which presents 12 case studies of Indian artisan enterprises, assessing their strengths and challenges and documenting how the sector operates. Informal work makes up 50% of India’s GDP and approximately 90% of the country's workforce is in the informal sector with no minimum wages or any kind of social security[1]. Of this, 200 million people depend on craft for their livelihood and at least half of those artisans and entrepreneurs are women, according to the report. 

Creative Manufacturing and Handmade: A Sector Whose Time Has Come is a study sponsored by the MasterCard Foundation and conducted by Powered by People in partnership with Trade + Impact and more than a dozen organizations in the sector. PBP’s survey of nearly 200 artisan enterprises around the world found that enterprises using either enterprise resource planning or customer relationship management digital tools had 2.5 times higher revenue than the ones that did not, while enterprises using both of these types of digital tools had 6.5 times higher revenue. Additionally, enterprises with access to financing saw 2.5 times greater sales. Given that mobile phones are already in the hands of most artisans and entrepreneurs on the ground, Alexander sees a huge opportunity to digitalize the remaining analog enterprises and connect them to global markets.

With COVID, the existing digital divide became a chasm. “If you don’t look good online, you don’t exist anymore,” Alexander said. Krishnamoorthy reported how artisan groups in India who had been happily dependent on in-person craft bazaars and other traditional outlets for sales suddenly found themselves scrambling to set up online shops when COVID hit.

While both leaders agreed strongly about the importance – and inevitability – of digitalization, Krishnamoorthy offered recommendations to everyone working to modernize and scale the sector: the process must be decentralized and customized to individual enterprises, or it will be delayed. “Any kind of one-size-fits-all solution will not work.” The need for nuanced and customized solutions that are adapted to the industry’s traditional informal structures is one of the key findings of 200 Million Artisans’ research. 

Both Krishnamoorthy and Alexander agreed that the artisan sector offers massive and unique potential to drive social change. With over $500 billion in annual revenue today, the sector is projected to grow by 20%, reaching $1 trillion by 2024[2]. Boosting its enterprises will support hundreds of millions of individual artisans, primarily women, and this will reverberate through the community. For example, Alexander’s research detailed how supporting the sector ticks off 11 of 17 Sustainable Development Goals. Krishnamoorthy explained, “If you support a woman artisan, she will make sure that her child goes to school, she will make sure that she’s healthy, she becomes financially independent…” 

“It can become the base for new economies to build on,” Krishnamoorthy said. “This sector is going to produce the consumers and producers of the future.” 

“I’ve really seen how democratic the sector is,” Alexander added. “Even if you haven’t had very much education, but your parents and grandparents taught you something, you actually have an opportunity to be part of the global economy, which cannot be said for many other sectors… It allows you to develop skills for life and for work, and skills that are transferrable to any other business. It’s a very important sector for mobilizing people and to have a much more equitable global economy.”

Whether we like modernization and digitalization or not, she said, it’s happening. “How can we make sure that more people benefit, that more people have the chance to get involved? I think this sector does that incredibly well.”

To learn more about the artisan sector:

Business of Handmade, 200 Million Artisans, July 2021 

Creative Manufacturing and Handmade: A Sector Whose Time Has Come, Powered by People, February 2021

To learn more about these R.I.S.E. Artisan Fund impact opportunities:

200 Million Artisans Impact Opportunity

Powered by People Impact Opportunity

The R.I.S.E. Artisan Fund invests in early-stage artisan enterprises creating sustainable livelihoods for rural communities with few economic alternatives. The fund deploys capital using a range of investment vehicles from grants to revenue-based equity investments while seeking a return of capital for further investment, thus creating a reinvestment cycle that multiplies the catalytic impact of philanthropic capital.

To invest via the R.I.S.E. Artisan Fund, you can make a tax-deductible contribution directly or via a grant from your donor advised fund (DAF). You can also co-invest directly in select investment opportunities.

Contact ellen@sproutenterprise.net for more information or complete our Philanthropic Investment Grant Form to invest in the fund.

[1] “COVID-19 has worsened the woes of South Asia's informal sector”, World Bank, December, 2020

[2] Handicrafts Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021-2026, IMARC, 2021.