Advancing urban value chain development to help millions of people work their way out of poverty
SEEP would like the thank the Bill and Melinda Gates Foundation for their support of this project.
VIP India’s Jaipur Jewelry Artisan Development Project (JJADE) works to strengthen the fashion jewelry value chain, making it more competitive in national and global markets while improving the working conditions and social well-being of artisans. JJADE’s strategy is to link businesses to markets that value design and fair supply chains, while simultaneously increasing the artisans’ access to social and commercial services like health insurance, identity cards, education, technology and finance.
|Implementing Agency||ACCESS Development Services|
|Partners||Jaipur Jewelers Association, Jan Kalyan Sahitya Manch Sansthan (JKSMS), and Rajasthan Abhuyudaya Sansthan|
|Sector||Jewelry in Jaipur, India: traditional, large, informal sector industry|
|Targets||20,000 ME owners, family-based manufacturers and workers|
|Strategy||Link to markets that value design and clean/fair supply chains and designs|
|Social Challenges||Poor returns, poor working conditions, access to education for artisan families, improved worker migration practices|
|Social Solutions||Identity cards, access to health insurance, education|
|Business Challenges||Production focused on raw material, market focused on design|
|Business Solutions||IT market exchange platform, finance, group organizing, technology & design services|
The Jaipur jewelry sector is large, varied, and lucrative, but not very rewarding for the informal artisans who provide the bulk of the labor. In 2010, Jaipur’s jewelry sector employed about 225,000 people: 135,000 in gem cutting and polishing, 65,000 in metalwork, and 25,000 in lacquer. Jaipur artisans are renowned for high-quality craftsmanship and skills; they cut and shape almost 90 percent of the gemstones in India's gem and jewelry trade.
Over time, the global market for jewelry has grown incrementally, with the continually increasing demand only temporarily slowed by the global economic crisis. In fact, the industry has been growing at a rate of 15–20 percent in the last couple years, with large markets in India, other Asian countries, the Middle East, and Europe. The major shift has been a change in demand from high-value, classic jewels, to cheaper “costume” or “fashion” jewelry, which sells at a lower price point and is valued as much or more for its design as its precious metal and stone content. Furthermore, a growing consumer base has exhibited awareness of, and preference for, products developed and sourced using fair ethical and social practices, with an emphasis on reasonable working conditions.
Growth in the jewelry market, however, has not successfully translated into increased benefits for the jewelry artisans. Jaipur jewelry artisans are unable to take advantage of the opportunities afforded by the increase in demand because they lack access to financial services and design inputs, use outdated technology, and simply do not know about (lack access to information) services that can help them develop their businesses. Furthermore, providers of such private-sector services are often unwilling to enter the market and serve microenterprise owners due to high risk and skepticism about their potential for growth. All of this has contributed to the expansion of urban poverty in Jaipur.
JJADe broadly sought to increase the incomes and improve the livelihoods of an estimated 20,000 artisans in Jaipur who work in the costume jewelry value chain. Considering the urban context and the inherent opportunities and constraints, ACCESS and its partners identified several objectives that would ultimately steer the project towards reaching its broader goal:
- Strengthen the costume jewelry value chain by increasing its competitiveness in domestic and international markets.
- Create an inclusive and sustainable value chain that integrates the artisans over the long term.
- Increase the social welfare of artisans by improving working conditions.
By its conclusion, VIP India reached nearly 5,000 gem and jewelry enterprises and over 25,000 artisans. Over 500 enterprises demonstrated financial gains of over $1,000 relative to peer enterprises, resulting in over $580,000 more generated annually. Artisans working at profitable target enterprises earned over $400 more annually as well, totaling $1.2 million. By December 2013, it is anticipated that over $1.7 million will be generated annually across enterprises reached directly or indirectly by VIP India interventions, and that over 76,000 workers will collectively earn more than $3.6 million dollars more than in the absence of the project.
Improved working conditions through supporting services. VIP India facilitated access to artisan ID cards for over 11,200 individuals, significantly improving their access to critical supporting services in jewelry production. As a result of the increased card provision, Max Bupa Insurance sold artisan-specific insurance products to over 15,000 people associated with gem and jewelry artisans. As a result of its success, this insurance model will be replicated by Access Development services in Bihar and West Bengal in 2012. Recognizing the potential demand for artisan ID cards, which provide not only better access to insurance but other services such as financing and skills development, ID card agents also began selling assistance services to artisans with unsubsidized support from VIP India.
Integrated skills development, upgrading, marketing, and financing. The skills development market changed significantly to provide better accessibility and affordability for artisans. Five design institutes offer customized training modules for artisans, taking into account their unique needs such as length and hours, one design firm became a skills accreditation agency according to the JJADe model, and a new design institute was established by a lead firm in the sector. The resulting improved jewelry designs, augmented by enhanced production processes learnt through skills development, enabled artisans to pursue opportunities in higher-end jewelry markets. Subsequently, the design institutes showcased jewelry collections developed by target enterprise students and craftsmen at different trade fairs and fashion shows. Importantly, the institutes also began lobbying relevant government to an unprecedented degree in order to obtain greater access to public subsidies and additional assistance that increases the affordability of the private sector providing skills development to artisans.
More responsive and supportive business enabling environment. VIP India significantly improved the business enabling environment for the gem and jewelry sector in Jaipur improved. With a new system for issuing artisan ID cards in place, over 11,200 artisans received their first card. With their card, over 3,000 of these artisans secured financing for skills training and production, totaling approximately $3 million. Finally, the VAT for jewelry production equipment was reduced from 14.5% to 5%, making technology upgrading for artisans appreciably more affordable.
Improved information flows and market linkages. Information flow and coordination between artisans, private design institutes, and relevant government agencies improved. An artisan database established through the program and used by the design institutes became a key channel for artisans to express their skills development needs to the institutes, enabling a positive feedback loop in which demand for training grows from responsive, relevant training opportunities. At a sector-level, VIP India’s Project Advisory Committee established itself as a forum for inclusive government lobbying in the mutual interests of both artisans and private design institutes.
A video description of the project:
The JJADE photo story: