Vol. 1 - Survival Entrepreneurship in Developing Countries

Your handmade knitted scarf, the fabric your favourite tailored dress is made from, the beads and gemstones in your statement earrings. They say that clothing tells a story — and that’s certainly true when it comes to the provenance and origin of what’s hanging in your wardrobe. 


But how much of the story are we aware of?

Have you heard of the informal economy, for example, or survival entrepreneurship (where artisans don’t live to create, but create just to live)?

Despite the UN having labelled these as major roadblocks in establishing fair working rights across the world, it’s not something we, in developed economies, talk about all that often. And we should.

Because not only do these concepts help reaffirm the need for fair prices for beautiful artisanal, handmade goods, they also shed a little light on the real human narrative behind the brands.

Understanding the ‘informal economy’

The formal economy is what we’re used to in developed countries. Employment comes with contracts, job security, health care, steady and fair wages, access to unions and HR... the list goes on.

But for the 2 billion people around the world engaged in the informal economy, work is a completely different experience. It falls outside of government regulation, with very few measures in place to protect workers.

That’s 60% of the world’s employed population who spend at least part of their time in the informal sector.

Sure, not all informal work is necessarily “bad”. For some, it’s an opportunity to explore entrepreneurship, turn artisan craft into a business, and establish financial independence.

But it’s still far from ideal. Informal workers don’t have guarantees they’ll be paid and are far more likely to experience labour exploitation and face unsafe working conditions.

It’s probably no surprise to hear that the informal economy is tied to poverty – as both a cause and consequence. In Africa, over 85% of all employment is informal, as opposed to Europe where the number is only 25%.

Generally speaking, when the level of education of an area increases, the level of informality in the economy decreases. The overwhelming majority (93%) of informal workers are in emerging or developing nations.

What is it like working in the informal economy?

Informal workers can face:

• Low wages
• Lack of economic rights
• Lack of social protection
• Lack of representation
• Poor working conditions
• No stable income
• No job security

There is an urgent need to tackle the problems that come along with the informal economy. And, like many other global issues, it all starts with awareness.

Have a think about the clothes you wear, the jewellery you buy, the shoes in your closet. Do you know where they all came from? Maybe they were crafted local to where you live, but there’s a good chance that you own at least a few items that were made by exploited workers in the informal economy.

These days, it's something that’s hard to avoid. But taking the time to make conscious decisions, where possible, to be mindful about the source of your purchases is a good way to help fight back against informal work.

How you can support artisans in developing nations

Consumers in the developed world often misunderstand the motivations of artisans working in developing countries. To be fair, that’s no surprise as it’s not often covered in mainstream media; it’s ‘out of sight, out of mind’. Offshoring exploitation keeps prices low and shoppers happy.

It’s important for us all to know that, in most cases, artisans in these developing countries have become experts in their craft not out of passion, but out of necessity.

That’s why they’re sometimes described as ‘survival entrepreneurs’ –  they lack opportunities beyond those they can find in the informal economy.

Survival entrepreneurs are largely unbanked and do not participate fully in the economy, which of course leaves them open to exploitation and trapped in a hand-to-mouth cycle.

Just like every other worker in informal employment, artisans aren't properly compensated for their work. For a job that requires skill, talent, and precise work, they need to be paid in a way that recognises them fairly - like how we do, for our Yala makers.

Transitioning to the formal economy

There’s really only one way for informal workers to escape the cycle of exploitation and low pay – transition to the formal economy. But as you can imagine, that’s much easier said than done.

The United Nations has said that a global abolition of the informal economy is critical to ensure the protection of rights and decent working conditions. We simply cannot have sustainable global development when the vast majority of workers are unprotected.

Transitioning workers to the formal economy is a major stepping stone to greatly reducing global poverty.

But for the vast, vast majority of workers trapped in the informal economy, it’s not as easy as clicking your fingers and transitioning into formal employment.

That means it's up to us, the citizens of developed countries with high incomes and the ability to make informed choices, to help make a difference.

Making sustainable shopping choices

There’s no denying we live in a world consumed by high street fashion. It’s cheap, it’s easy, and for some people, it’s the only option. But if you’re able to, making ethical and sustainable shopping choices can go a long way.

A lot of focus is placed on goods that are produced sustainably from an environmental perspective, but it’s important to think about economic sustainability as well.

It’s always worth researching to find brands who are doing what they can to shrink the gap between formal and informal employment.

There’s something special about knowing exactly where your favourite items come from, and being assured that the products you buy are created responsibly. Plus, you’re much more likely to get high-quality goods when you buy from an artisan, rather than something created via a mass production line.