In an increasingly globalised economy, women workers are faced with a new set of economic challenges. These challenges include: increasingly
competitive market scenarios, globalisation of finance and national
economies and continued poverty.
Women workers in India have always been active contributors to the national income. Their contributions however, have rarely been acknowledged, thus far. An important characteristic of the Indian female work force is that most of it is employed in the informal or the unorganised sector, currently estimated to be 78.4 per cent of the total women workers. The percentage goes up to 80.7 per cent, if women working in the urban areas are also included.(1) The informal economy is defined as comprising of both self-employed persons and paid workers.
SEWA views these informal sector workers as highly productive and economically active, even when very poor. They contribute to 60 per cent of the national income, over 54 per cent of the national savings and over 40 per cent of the national exports.
From SEWAs experience, women are not recognised as workers and even though they put in long hours of work, the returns are very low. They have limited access to tools and equipment; innovations in communications and technology almost completely bypass them. They face multiple entry barriers into the mainstream markets, use of social protection is restricted and inclusion in policy dialogue labour or economic is very low.
In an increasingly globalised economy, women workers are faced with a new set of economic challenges. These challenges include: increasingly competitive market scenarios, globalisation of finance and national economies and continued poverty. SEWA studied the impact of these challenges in an in-depth manner and has now embarked on formulating and implementing proactive strategies that translate these challenges into economic opportunities for the poor women workers.
This article focuses on the market setups in which women workers in the informal sector are currently operating. It addresses the major barriers that women workers face in integrating into mainstream market systems that have higher potential for growth. The case of the SEWA Trade Facilitation Centre (STFC) is also discussed which portrays SEWAs strategies to strengthen business processes and establish strong market linkages at all levels starting from the local markets to the domestic and global markets.
Major barriers to market entry for poor producers
In the last three decades of its work with poor producers in the unorganised sector (both rural and urban) SEWA has identified five key barriers that restrict their entry into the mainstream markets(2):
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Size of operations: Small-scale production places profitability constraints on poor producers who fail to benefit from economies of scale.
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Lack of communication: Poor producers have limited communication with people outside of their communities. They lack the resources and the influence to maintain sustained interactions with buyers and are unable to negotiate fair terms with middlemen.
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Lack of information: Producers in the informal sector lack the market intelligence needed to produce goods of acceptable quality for the major domestic and national export markets.
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Technical limitations: Technical know-how is limited. Poor producers need assistance, financial and otherwise, to develop production processes that lead
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to timely delivery of goods that are competitively priced and standardised as per market needs.
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Policy barriers: Policies relating to trade and global market access are developed with almost no considerations of the challenges facing the informal sector workers and their future development prospects.
The existing economic and social structures push the marginalised communities further towards the outer fringes of the society.
In this context, SEWA took up the mission of empowering women workers from the informal sector so as to enable them to build their capabilities and agency. The notion of capabilities entails that female workers should have both the capacities (awareness of their rights, information, technical skill) and the endowments (access to financial resources, to markets, to communication and technology solutions and consequently to economic benefits); to become the agents of their own socio-economic development.
Strategy to overcome livelihoods barriers
Mobilising women and creation of collective entrepreneurship: Organising women is seen as the most effective way of increasing their collective strength and bargaining power, so that they are no longer exploited by middlemen or moneylenders. Such collectives also give the rural producers a better access to technical inputs and credit facilities and permit them to be protected by numerous legal regulations.
Consistent capacity building: Effective integration and a sustainable presence in formal markets entails constant capacity building in terms of analysing information on the market trends and the changing needs of the customer. The STFC is constantly engaged in the capacity building of the artisans through strategic alliances with specialised technical and training institutions and also by building on the in-house training facilities.
Providing access to ICTs through community learning centres (CLC)
The workers in the rural informal economy live in scattered communities, making it difficult to bridge the information and digital divide and leading to increased marginalisation.
CLCs can go a long way in bridging this disconnect. The CLC is a communication and coordination hub of the village, which focuses on imparting basic computer education and training to all members so as to enable them to access important market information using Internet tools. These centres are also equipped with the other telecommunication facilities like tele-fax and satellite communication devices. The deployment of ICTs has not only helped in increasing the efficiency of business operations by reducing transaction costs and establishing integrated Management Information System (MIS), it has also resulted in establishing direct linkages with global markets and policy makers, resource organisations and other international agencies. The communication tools have become an integral part of institution building.
Providing financial resources: Poor producers have growing needs for financial assistance as they try to scale-up operations. Investments are necessary to break the vicious circle of poverty and micro credit can be an important tool for aggregating the required resources. Linkages with institutional investors, financial institutions and banks are established to enable access to credit and financial advisory services which are vital to engineering efficient and profitable business models.
Providing access to social security and support services: Women workers, also mothers and wives, are often overburdened with domestic and work related responsibilities; therefore social services such as childcare can prove to be quite advantageous for them. Therefore, following an integrated approach to women empowerment, a range of social services like healthcare, childcare and insurance need to be offered to them.
SEWAs Trade Facilitation Centre (STFC)
In response to the demand for creating sustainable livelihood strategies through the creation of optimal business models, the STFC was established as the commercial arm of SEWA, with the main objective of promoting access to national and global markets by the women workers in the informal market, in the textiles and handicrafts sector.
The STFC is a unique company owned by more than 15,000 women artisans pursuing craft activities in the drought affected and disaster prone districts of Kutch and Patan, in Gujarat, India. More than 40,000 SEWA members in these districts are adept in the art of intricate embroidery. The STFC has helped the members convert their traditional skills into a major income generating activity. The STFC aims to build the capacity of about 15000 artisans to enable them to earn a remuneration of minimum of Rs. 1500 per month on a sustainable basis.
STFC provides a wide array of integrated solutions ranging from marketing support, product development, quality standardisations, information systems, access to capital and state of the art technology that aims at the capacity building of the artisans.
Establishing market linkages
STFC provides comprehensive market intelligence that includes market surveys for specific product categories, access to buyers databases, information on tariff structures and non-tariff barriers, identification of possible distribution channels and development of an effective sales strategy. STFC has a range of marketing channels that are a judicious mix of dedicated retail outlets, intuitional sales by way of business to business (B2B) marketing, exhibitions in the major metros and other emerging cities in India and exports to the USA, Europe, South Africa and Japan. Concentrated efforts are made to participate in important trade shows, organise buyers-sellers meets, and promote e-marketing through the STFC portal. An important step in market preparedness is to expose the artisans to the operating procedures and quality norms of the international markets by participating in exhibitions and buyerssellers meetings.
Continuous product development
Indigenous products are found to be lacking in terms of the quality of raw material used and the standardisation of product designs. They tend to be supply driven and are produced in isolation of the current tastes, preferences and needs of the markets. STFC provides product development facilities whereby contemporary products (high value added apparels, home furnishings and accessories), based on latest market research information and fashion forecasts, are developed using the traditional skills of artisans. It facilitates the use of modern technology to ensure quality testing of the raw materials, designing of new product lines, proper finishing and packaging of products.
Technical alliances
A major step in giving local artisans a competitive edge has been STFCs partnership with the National Institute of Fashion Technology (NIFT), initiated in 2002. An important aspect of this project is the emphasis on providing multiple skills as a buffer against large start up and terminating loss costs when styles change; forcing operators to learn new skills every time and pushing up the production costs.
Another key initiative was to set up an in-house design unit that studies market trends and develops product designs accordingly. The design unit has improved the ability of the workers to create products based on the briefs provided by domestic and international buyers. This enables developing contemporary products with much higher market potential.
Deploying technology to enhance productivity
Artisans are scattered across numerous villages in the Kutch and Patan districts and setting up an efficient supply chain has been a major challenge for the STFC. In order to improve the efficiency of the supply chain, STFC has implemented an MIS system. This has resulted in the strengthening of the backward linkages (namely distribution of work, collection, wage generation, wage tracking, quality tracking) and also in improving the overall business strategy and operations.
For years, the local artisans had been selling their products for meagre sums to exploitative middlemen. With the establishment of STFC, the artisans have become the owners and managers of their own enterprises. The income levels of the craft artisans have increased from Rs. 500 to Rs. 1500 per month. The business development services provided by STFC has enabled the production of value-added goods that are equally in demand in the apparel, home furnishing and accessories market that experience high growth rates.
Lessons learnt
SEWAs experience of working with micro and macro economic structureshas enabled us to draw several lessons concerning the mainstreaming of informal economy workers in the global economy.
Organisational activities are indispensable
In order to effectively integrate with mainstream markets, the informal sector workers need to organise so that they gain collective strength and efficiency.
Training and socio-economic assistance are required for capacity building
It is imperative to build the human capacities of the informal sector workers Training should be provided in rural areas as well as in urban areas, which may require the creation of decentralised centres, or associations that would organise such training activities. Women will not be able to attend the training sessions unless social services like childcare are provided to them.
Use of IT tools is imperative
To enhance productivity, improve manufacturing efficiency and undertake technological innovations; it is important to build strong institutions in the informal sector. Increased communication through broadband connectivity and video conferencing facilities will facilitate the exchange of information on market trends and enable informal sector firms to re-strategise and adopt best practices.
The need to upscale is of paramount importance
It is only when local economic organisations build capable federations that they are able to build fruitful linkages and partnerships with the mainstream formal setups. In addition, larger organisations enable their members to capture the benefits of economies of scale, facilitate access to financial resources and encourage the pooling of information and ideas.
Partnership with major corporate players
Large corporate concerns have easy access to the domestic and international markets and can thus facilitate the marketing of indigenous products. These partnerships can also contribute towards the transfer of technology and effective backward linkages with grassroots producers.
Conclusion
SEWA has been working relentlessly to promote self-reliance and provide full employment to its members since the past four decades. The core of its activities has been to meet the growing demands and the new challenges facing its members, who are women workers in the informal sector, in the current era of globalisation. SEWA has been making concerted efforts to build its members own economic organisations on commercially viable norms and by establishing direct and strong economic linkages with mainstream markets at the local, regional and global level. Specialised initiatives have been undertaken to deploy the latest innovations in IT and communications for the development of its members. All of SEWAs integrated efforts are finally means to achieving sustainable livelihoods, ensuring consistent poverty reduction and vulnerability mitigation for its members.
Endnotes
1 NSS 1999-2000 55 Round, Survey on Employment and Unemployment
2 SEWA and World Bank PREM Voices of the Poor Report 2001
Author: Reema Nanavaty is the Director, Economic and Rural Development of SEWA (Self Employed Womens Association), India.
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