Keynote address at the launch of the Inclusive Business Action Network reception & dinner (en)
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I am delighted to be here for the ‘Launch of the Inclusive Business Action Network’. I would like to congratulate the Federal Ministry for Economic Cooperation and Development and the German Society for International Cooperation for making the Inclusive Business Action Network a reality. At the International Trade Centre, we know the power that inclusive trade and inclusive business can have on growth, jobs and poverty reduction. These impacts can be leveraged by networks of like-minded people.
Let me start with a story about why networks are so important. About ten years ago, Simone Cipriani, an Italian leather and footwear expert, was spending a lot of time in the Nairobi slum of Korogocho with lay missionaries who were trying to set up cooperatives to create work for people. He saw that the artisans there capable of producing top-class merchandise, even if they couldn’t compete internationally in the low-margin mass market.
In 2007, Simone came to ITC with a business plan for ethical fashion, in which selected high-end fashion industry players would commit to sourcing from micro-producers. A pilot project produced bags for Topshop, the British retailer, and brought fashion industry representatives to Nairobi to meet the micro-producers. From there, the ITC Ethical Fashion Initiative was launched a year later. A social enterprise was then set up, drawing in big-name designers like Laria Fendi, Stella McCartney, and Vivienne Westwood.
The Ethical Fashion Initiative, recognising financial constraints of poor micro-producers, negotiated payment arrangements in which buyers would put up a significant proportion of costs up front, enabling the cash-poor artisans to purchase materials. After delivery, they agreed to pay the balance immediately, rather than after the 30 or 60-day delay that is customary in the industry.
ITC works with the artisans – 90% of who are women – to help them organize, learn business skills, upgrade productivity and quality control, and connect to designers. According to project impact assessments, participants report higher wages and capacity to save.
- while 20% of the micro-producers were earning less than US$1 a day on other activities, this increased to between US$4–$7 per order facilitated by the initiative
- 83% of the micro-producers involved are able to educate children
- 90% of the micro-producers involved improved their dwellings
- 74.4% of the micro-producers involved now have savings
- 94% of micro-artisans involved have been able to learn useful skills
- But more importantly, 100% of the women micro-producers affirmed they gained respect from their male counterparts thanks to their ability to earn a living and take care of family needs
Let me emphasise that the Ethical Fashion Initiative is not about charity. It is about dignified work at a fair wage, to make products that customers want to buy. All training activities are tied to existing contracts that need to be fulfilled.
Let me also say, it could not have happened without a network living in the fashion industry, an international development agency, and the donor community – including Germany, which came together to link 7000 artisans from around the world to fashion partners from Rome to Rio to Tokyo.
Although ‘inclusive business’ is a term that only goes back a decade or so, the concepts underlying it have been at the heart of the International Trade Centre’s work since we were founded fifty years ago.
ITC was set up by the GATT, predecessor of the WTO, and the United Nations because they recognized that despite trade liberalization, developing countries and their businesses were still not as included and still not as integrated as anticipated in the increasingly open global economy.