Photo credit: Alison Wynn, Industree Foundation
India is growing fast. Here’s how it can include everyone
Neelam Chhiber and Alison Wynn
This article was originally published on the World Economic Forum Agenda
India’s economy is one of the fastest-growing in the world. But is its growth including everyone? As jobs move out of villages and into cities, migration from rural to urban areas follows, on a massive scale. Cities are bursting at the seams. India’s carbon footprint is increasing. And in the world’s largest democracy, women and girls still struggle for gender equality. But just as China harnessed its rapid expansion and met its Millennium Development Goals, now all eyes are on India to achieve its Sustainable Development Goals (SDGs) by 2030.
The route to sustainable and inclusive growth lies where one might least expect. Rural India is home to nearly 70% of the country’s population. It hosts tremendous untapped potential. But it is missing many links to the wider economy. The country just has to connect the dots.
The missing links in creative value chains
Globally, fashion and lifestyle markets are growing, especially those with a strong creative focus, anchored in design and connected to tourism. Labor-intensive light manufacturing, and in particular creative manufacturing, is an ideal industry for inclusive job growth. In India, more than 60 million people work in this sector, which includes value chains like apparel, handloom and handicrafts. Despite having one of the planet’s widest and richest skill bases in creative manufacturing, India commands just two per cent of the global market share.
Meanwhile, smaller nations such as Vietnam and Bangladesh have leapt forward in apparel exports. India’s population is nearly ten times that of Bangladesh, yet its smaller neighbor is second only to China in the global apparel industry. The scale of the Indian domestic market also gives it an advantage over nearby Southeast Asian countries. Creative manufacturing has enormous potential for growth both within the country and in export markets.
India has many advantages over its competitors: a rich traditional skill base coupled with cutting-edge technology and a huge workforce. But despite the potential of light manufacturing, the country’s skilling programs are geared towards sectors like IT, automotive, health, security, and construction, which employ just seven per cent of the workforce. These jobs require would-be employees to move from rural to urban areas, and to join the formal economy. This migration causes innumerable social, economic, and environmental problems. It takes jobs further away from the majority of the population, which lives in rural areas. This may be one of the reasons why, even after five years of action around India’s Skill Development program, only 12% of the trained candidates have found employment.
But the missing links between urban and rural economies, and between skilling and employment, provide an opportunity for models of inclusive growth to emerge. Currently, 93% of India’s workforce is in the informal sector. That workforce is faced with challenges like low and irregular wages, exploitation by middlemen, harassment, and more. But there are solutions.
Looking to the past for a way forward
More than 60 years ago, Verghese Kurien built a producers’ union of farmers which now owns AMUL, a brand generating USD $5.9 billion dollars of annual revenue. Its farmers receive more than three-quarters of the price paid for the milk. This producer-owned model enables decentralised production units to thrive, bringing formal work to rural areas. Today, digital entrepreneurship in the creative manufacturing sector can generate incredible potential for positive change at scale. Producers who were formally disconnected from current designs and market needs are just a click away from the input they need to succeed. Digital technology not only empowers them to manage their own finances and reduce their dependency on middlemen, it can also grant them access to local and global networks. A decentralised approach to creative manufacturing has never been easier.
Furthermore, India’s strong and active civil society organisations work with communities at a grassroots level. Landmark Corporate Social Responsibility (CSR) laws have created more opportunities for large corporations to build a more inclusive economy, where CSR initiatives become mainstream corporate policies. The incorporation of the Producer Company model under the Companies Act of 2013 has incentivised the creation of farm and off-farm producer companies.
Mission Creative Million: Creating a catalyst for change
Industree Foundation’s Mission Creative Million fills in the missing links in the creative manufacturing sector, leveraging digital technology to bring resources and opportunities to rural India. Like AMUL’s interventions 60 years ago, Mission Creative Million is a call to action for stakeholders across the value chain to forge multilateral partnerships, enabling inclusive growth. With the right training and tools, producers can become business owners and leaders, generating local employment and growth with vast potential for scale. The missing connections in India’s economy can turn from a challenge into an opportunity. Mission Creative Million empowers producers, not only through skills training, but with corresponding market linkages and the professional management support they need to build sustainable futures for themselves and their communities.
This is the catalyst India needs to transform philanthropic funding into sustainable models for growth, through grant equity and inclusive job creation. By focusing on rural areas, where there is the most room for growth, the producer-ownership model contributes towards the eighth Sustainable Development Goal of Decent Work and Economic Growth. The model brings work directly to the producer’s doorstep, mitigating rural-urban migration. It reduces the carbon footprint of creative manufacturing value chains, and gives the ever-growing conscious consumer base an alternative to environmentally harmful products, thereby contributing to the twelfth SDG: Responsible Consumption and Production. Finally, interventions in a sector that employs comparatively more women provide opportunities for female leadership in a country striving to meet the fifth Sustainable Development Goal of Gender Equality.
However, creating this kind of catalytic change at scale cannot be left to the development sector alone. If India wants to fulfill its unmet potential for inclusive growth, multi-stakeholder partnerships are the only way forward. With government and corporate support, the Creative Million model can inform both business and policy, with a real potential to generate inclusive economic growth in India and elsewhere.