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The formal work model provides two main ways to participate: as entrepreneurs and leaders of businesses, and as employees.
But worldwide, the formal work economy doesn’t serve women who:
- Lack the skills or desire to start or lead businesses
- Live where few or no employment opportunities are available
- Do not meet the requirements for available jobs
- Are discouraged from holding formal jobs due to cultural, religious, or family objections
- Require more scheduling flexibility than available jobs permit
These challenges leave women to fall into unpaid work and the informal economy, which accounts for more than 60% of the world’s employed population, or approximately 2 billion people, according to the International Labour Office. Among women in frontier regions, 75% are in the informal economy, and women do from twice to sometimes 10 times as much unpaid work as men.
Working in the informal economy, also known as the grey economy, creates problems for women, including:
- Low wages
- Unsafe working conditions, including risk of sexual harassment
- No labor law or social protections
- No social benefits such as paid sick leave, health insurance, or pensions
A Semi-Formal Alternative: Tapping the Social Enterprise Value Chain
So, what’s the alternative? Many social enterprises are creating semi-formal work opportunities for women that don’t fall under the categories of entrepreneurs, employees, or customers. They do that by taking a holistic view of their entire value chain.
At Miller Center for Social Entrepreneurship, we define the value chain for a social enterprise as both input—anything feeding into a social enterprise so it can create its products or services—and output—anything extending out of the enterprise, enabling it to deliver those products and services to its customers.
Here are some examples of how three types of social enterprises are generating semi-formal work opportunities for women through their value chains.
Smallholder Coffee Farming
Coffee represents a global market predicted to reach $155.64 billion by 2026. Although most coffee is grown in the equatorial “Bean Belt” that lies between latitudes 25° N and 30° S, the vast majority of the coffee industry’s revenues bypass those who produce the coffee beans—especially the smallholder farmers prized by specialty coffee companies and their customers.
In addition to providing sustainable livelihoods for the smallholder coffee farmers with whom it works, Vava Coffee also markets coffee gift bags made by groups of women in the informal settlements surrounding Kenya’s capital, Nairobi.
At Vega Coffee, 95% of its farmer roasters are women. Vega gives its farmers tools and training so they can not only grow the coffee beans, but also roast and package their coffee—which can allow the women to quadruple what they earn from each pound of beans.
As Vega notes on its website: “The additional income earned by coffee farmers has a tangible impact, funding community initiatives like better education for children and greater access to healthcare. Our farmer roasters, the majority of which are women, play a significant role in transforming their communities with knowledge and lifelong skills that go beyond the farm.”
One semi-formal type of work is creating artisan crafts. Most artisans worldwide are women, who typically face challenges in selling their creations and receiving fair payment for them.
A number of social enterprises work to help women artisans make decent livelihoods from their work by connecting them to global markets. Some examples include:
- Someone Somewhere works with 180 artisans—98% of whom are women—across five of Mexico’s poorest states, empowering them to earn livable incomes from the sale of their traditional artisan fabric crafts.
- Earth Heir is a Malaysian social enterprise that collaborates with a network of more than 100 traditional artisans throughout the design, making, and selling process—with the goal of enabling underserved communities to build sustainable livelihoods.
- Rangsutra acts as a bridge between more than 2,000 rural artisans in India, 70% of whom are women, and customers across the globe—empowering women to improve their craft, supplement their incomes, and gain greater control of their work and lives.
- ANTHILL Fabric Gallery, comprising mostly women artisans in the Philippines, follows a human- and community-centered business model encompassing weavers, designers, production partners, and weave wearers.
- All Across Africa connects women and men artisans in Kenya, Uganda, Rwanda, Ghana, and Burundi with real and competitive markets worldwide.
Last-Mile Product Distribution
One of the social enterprises pioneering the last-mile distribution business model, and focusing specifically on empowering women as distribution partners, is Solar Sister. Solar Sister recruits, trains, and supports women as distributors of clean energy products—including solar energy and clean cookstoves—within their communities.
In a completely different industry, JITA in Bangladesh builds alternative rural distribution networks, training groups of women as micro-merchants and door-to-door sales agents to deliver multi-product baskets of various health, hygiene, and nutrition products to their neighbors.
In another twist to last-mile distribution, Rising International uses a home party business model to alleviate extreme poverty, in the United States and around the world. Women join the global economy by selling their handmade boutique-quality products at Rising events (which are virtual rather than in-person during the COVID-19 pandemic).
More Than Purely Transactional Relationships
In mainstream businesses, supply chain relationships are formed according to transactional priorities. Who can bring parts, components, raw materials, and associated services into the company that meet certain specifications and at the best cost?
By factoring impact as well as economic value into their decisions, social enterprises form relationships with their value chain participants that go beyond the strictly transactional realm. Through their semi-formal work opportunities, they often invest in training, networking introductions, and other resources for those supplying their businesses and distributing their products. Semi-formal work also offers greater time flexibility, which can be crucial for women who are juggling unpaid care responsibilities alongside their income-generating activities.
In addition to supporting the economic empowerment of women throughout the value chain, semi-formal work also triggers a powerful multiplier effect that extends throughout the communities where social enterprises operate. Women with greater economic resources and agency become customers for other local goods and services, boosting others’ incomes. And because women consistently spend more of their income on their households than men, women doing semi-formal work can contribute directly to their families’ health, education, and welfare.
Doing the Math: How to Enhance the Multiplier Effect
What can be done to strengthen social enterprise value chains? Here are some ideas:
- The first step is simply to recognize that social enterprise value chains are an important avenue for supporting women’s economic empowerment.
- Seek out and purchase goods, such as coffee or artisan crafts, produced or distributed by social enterprises.
- Provide support to social enterprises and/or the ecosystems surrounding them, whether in the form of capital, technical, or business assistance.
As a leading accelerator for social entrepreneurship worldwide, Miller Center works to nurture social enterprise value chains and enhance the multiplier effect. One way we do that is to focus on scaling and replication of successful social enterprise business models. To see an example of how scaling and replication can be encouraged, I invite you to download our Last-Mile Distribution Playbook.
Brigit Helms is executive director, Miller Center for Social Entrepreneurship. She last wrote about the role social enterprises can play providing good jobs for women.