Rajesh Jain (ACCESS Development Services) and Sonali Chowdhary (The SEEP Network) presented lessons in engaging government through urban value chain development drawn from the experience of the Jaipur Jewellery Development programme (JJADe, 2007-2011).
JJADe targeted over 20,000 marginalised artisans operating within Jaipur, India's gem and jewellery sector. This programme is part of a Global Urban Value Chain development action learning initiative funded by the Bill and Melinda Gates Foundation.
The gems and jewellery sector represents a significant component of overall production in India, constituting 13% of the country’s merchandise exports (more than US$ 2 billion per annum) and a typical annual growth rate of 20%. Jaipur is India’s historical hub for jewellery production. Though Jaipur’s gem and jewellery sector is over 200 years old, it remains plagued with many problems associated with highly competitive growth markets.
For the 225,000 informal, home-based artisans in the sector, life is characterized by low skills, poor working conditions and low enterprise investment, poor returns on investment, informal relationships, and lack of access to high-value market segments. Insufficient skills development represents a serious constraint within the sector. Unskilled artisans are typically unable to produce jewellery with cutting-edge designs using the newest technology to appeal to buyers operating in high-value consumer markets. As a result, artisans earn depressed wages in low-value markets and an oversupply of labour competition with stagnant sector-level competitiveness. While the export market for gems and jewellery is high value and high growth, the existing levels of skills are not sufficient to service the growing demand. Existing skills development opportunities largely failed to serve artisans as most private sector design institutes and formal lenders catered to lead firms and high end designers while the government had no effective training schemes in place for gem and jewellery artisans. An interesting bottleneck in the enabling environment is that the Ministry of Commerce handles the export function while the artisans are catered under the Ministry of Handicraft. Thus there is a big disconnect between the incentives of the related regulatory bodies.
JJADe worked with private sector training institutions, Government institutions and the various regulatory authorities to make the skill training market more efficient and work for the BOP market. JJADe facilitated dialogue and coordination between ministries to transfer regulatory authority to the Ministry of Handicrafts, and streamlined the delivery of artisan Identity cards by identifying and strengthening new delivery models. The program also worked with private design institutes to tweak existing training curriculum to suit the needs of the BOP market. This included a shift in culture of serving low volume high cost markets to service low cost high volume markets. JADE facilitated access to private design institute training subsidies, lobbied to reduce the value-added taxes associated with production equipment, and piloted a public vocational education program and enabled the creation of an artisan platform to facilitate dynamic interactions between training institutions and artisans.
The initial phase expanded access of ID cards to over 9,000 artisans which enabled around 3,000 artisans to secure different forms of financing. In addition, the ID cards enabled artisans to access subsidized training programs, form more business relationships and generally access facilities available for handicraft artisans. Five private institutes have started new courses to serve the informal sector and two have become skills accreditation agencies for informal sector skills market. JJADe also integrated its private- and public-sector efforts by developing a Project Advisory Committee for design institute and government and other key stakeholder communication.
The presenters concluded with lessons learned from the JJADe experience. Foremost, understanding the weaknesses in government delivery channels enables selective advocacy that 1) ensures the inclusion of key government officials in the process of market development for that input, and 2) creates feedback loops between government bodies, lead firms and supporting market actors. Further, smart subsidies incentivise the government to improve service delivery and the private sector to realise and respond to market potential by demonstrating 1) sustainability through cost-effectiveness, and 2) the value of the service to the overall market system.
You can access the presentation slides here: https://m4phub.org/userfiles/file/Theme%207%20Chowdhary.pdf