Creative Manufacturing as a means of inclusive growth

Neelam Chhiber, Co-founder and Managing Trustee of Industree Foundation, was invited for the panel seminar held by All India Artisans and Craftworkers Welfare Association (AIACA) on the occasion of 10 years of Craftmark at India Habitat Centre on September 2nd. At the seminar, she spoke about the how the creative manufacturing sector can be developed as a means of inclusive growth in India. Here is an extract from her speech.

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Neelam Chhiber, co-founder and managing trustee of Industree Foundation at 10 years of Craftmark: Handmade in India

We know the numbers.

Global creative industries are growing at 20% plus. The India Design Council chaired by Anand Mahindra asked the head of the UK Creative Industries Mission for advice on handicrafts and handloom. He said, “How can we advise you? We don’t have a creative manufacturing industry; we have only digital creative industries – design, architecture, animation and gaming.”

China has killed its creative manufacturing industry. Li and Fung, a 30 billion dollars plus trading entity, that helped scale small cottage craft industries in China to large manufacturing industries, held a conference some time back to understand why China has not been able to create a premium global or even a national fashion and lifestyle brand of any scale.

They discovered it was because their traditional production practices had been killed by the Cultural Revolution. A discussion amongst all the high powered invitees revealed that fashion and lifestyle brands are built on culture. Chinese crafts now are just largely practised in the remote province of Yunan, near the borders of Burma. Today, there is a premium brand on the rise in China called- Shang Xia being built purely on cultural production practices, selling at fantastic price premiums.

India has the world’s largest, most varied, decentralised creative production workforce. This is primarily a production base, with strong cultural content and narrative, but primarily it is a means of livelihood.

According to the latest India economic survey artisan numbers were pegged at 60+ million. This could be a 100 million even, so that is about 10% of the population. Is the next generation interested? We all know interest is dwindling and often moving to the hands of women from men. That’s a good thing.

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From L to R: Moe Chiba (Chief, Culture Sector,UNESCO), William Bissell (MD, Fabindia), Rashmi Verma (IAS, Secy, Ministry of Textiles, GoI), Rathi Vinay Jha (President, AIACA Board), Neelam Chhiber (Co-founder and Managing Trustee, Industree Foundation)

In pockets where they see their parents doing really well, the next generation is becoming business owners as opposed to mere practitioners; that’s fine. We also see another trend here. In Mysore, traditional inlay artisans’ children don’t become inlay artisans, but migrant workers do. In Bagru, block printers’ children don’t become block printers; youth from rural Rajasthan pick up the vocation and more and more women are block printing.

Now, let’s come to future of markets and let’s come to the year 2025 because that’s what we should be planning for.

India has currently 4 to 5 percent global market share. Other than in apparel/fashion—which is served by handloom, embroidery and tailoring—skills are very much a part of creative production. However, shares of handicrafts sales in the domestic market are dwindling as they face severe competition from imports. What are these markets – informal retail, local markets, organised retail, be it brick and mortar or retail, global chains. The sector has been done a great service by organisations like Fab India, Anokhi, now by Jeypore and a huge host of senior and younger ramp designers sprouting every day. Enough cannot be said about this. Mother Earth and others brought to the fore this sector’s contribution to sustainability – both social and environmental.

At the last World Economic Forum at Davos, there was a session titled ‘Green is the new Black’. Today, 40% of global fashion customers want sustainable fashion. What happens in fashion follows in lifestyle and home. Craft production is the very embodiment of what tomorrow’s customer will want. It is by and large low carbon footprint production. With a few tweaks and the introduction of a few common facilities, its environmental footprint can be brought down to zero. Its social story is enormous.

Will we have the production advantages that we have today, for tomorrow’s customer still available tomorrow? Or would we have not killed it like China, but have allowed it to languish and wither away? And in the process, also killed the huge competitive advantage we have? Rana Kapoor, MD and CEO of Yes Bank had spoken about India’s huge competitive advantage, with its creative millions.

I am leading this monologue to a point I am trying to make here…

All the names I have taken up so far, and to this I can add leading organised chains that are cloning traditional production trends with very, very close copies—most block prints are being cloned as screen prints—I don’t think that’s wrong in any way; we just have to keep introducing more and more new blocks, that’s all. They serve the purpose of making that visual look, a look of popular fashion which is great. In an interview once, William Bissel of Fab India mentioned that Maanyavar was at 225 crores and built on hand embroidery.

Now having taken all these successes, let’s do some simple math. Let’s say we want to impact a million artisans, from the 100 million. And here we are not talking about those who are not from the trades traditionally/locally, but could be interested to take these up, as it would provide local employment and they would not have to move to cities – most migrations are distress migrations to become construction labour or domestic help, or be trafficked or take up forced labour, which is what is happening.

A million artisans, who need to earn above minimum wage, which was Rs 1 lakhs annually, and has just been increased by our Labour Minister by 45%, so let’s say it’s at Rs 1.5 lakhs annually. People migrate out of a trade if they don’t have access to regular income, so let’s stick to full time income. I am now moving to dollar terms, just because the numbers are shorter – that’s 2,000 dollars annually as wages, which is 6,000 dollars of finished product. Wage is normally one-third of total product cost in this sector, except in very premium sectors, all the more the reason to move to premium sectors.

If we need to impact a million artisans, that would mean 6 billion dollars in sales from the producers. Now IKEA is the world’s largest home company at 8 billion dollars. Amul is at 3 billion dollars in sales. Mother Dairy is said to be at 8 billion dollars.

Thus we come to the next question? Will we have the next generation of artisans, doing very intricate handloom/ practising intricate skills at minimum wage? Do they deserve just minimum wage? That is why there is this constant refrain of no supply. Not enough supply and we move to power loom instead of handloom, we move to screen print because of block print.

Artisans deserve more than a wage. They need ownership in brands, they need wage plus, they need a flow of dividends, as milkmen get from Amul every year. They need to earn more than a rural BPO worker. They need to earn Rs 25,000 per month, and there will be enough to supply the world, and India’s burgeoning markets, the real thing.

For years it was felt that Amul in creative manufacturing was not possible because milk is a single commodity, a single raw material etc. But Industree Foundation has developed a model building on producer ownership it has had successful pilots in multi-craft production. Artisans, self-aggregate into SHGs, which own producer companies, where dividends of profits of production can go only to producer members. It uses what is called the 6 C Model- Construct, Capacity, Create, Channel, Capital and Connect.

2 producer companies that have been promoted have done 10 crores in revenue last year, are profitable and supply handicrafts to global giants like IKEA and fashion to Mother Earth. Industree has launched Mission Creative Million to build a digital platform using the mobile phone revolution that will onboard, 30,000 digital startups, impacting 30 artisans each, onto a B-to-B and B-to-C platforms. It has support from Mindtree, Sonata, Social Venture Partners India, and NSDC. We are also in discussions with Master Card, Ikea Foundation, Rockefeller Foundation, UNDP and World Bank. This largely supply chain backbone which will be professionally managed shall be owned 100% by producers, and is free to supply on all formats, be it Fab India, Jaypore, Amazon, Flipkart, Birla’s new khadi-based brand, Reliance, new handloom-based brands… or even their own brand.

Industree in collaboration with AIACA , Labornet, and other like-minded organisations is looking to scale these models and build them closely around mechanisms and schemes of GOI. The nature of the problem and huge opportunity is such that this has to be a public endeavour.

We turn to the government for support. NSDC training partners can be encouraged to help build this ecosystem using skill building funds, along with common facility funds from related ministries. Skill training for this sector has to move to total value chain training, and we are in discussions on the finer points of how the dream to build an AMUL of Creative Manufacturing can be actualised.

In the next phase, we have to talk about Make in India, and the emphasis on industrial production increase and increasing investments from overseas for this. We also have to talk about lean manufacturing, based on craft techniques.

30 years ago, I started my career post product design at NID, with an artisan called Ram Singh in Bastar, making lost wax metal casting products. I cannot go back to see him till some solution for scale has been built out. I am answerable to him. We all are – to Handmade in India.

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