The business of the future? It’s fair and inclusive
Since 2012, IKEA has been collaborating with social businesses – pioneers with the ambition to create business that is ethical in all dimensions. This is the story of business done differently, which aims to create more jobs by scaling up our global global purchasing, increasing volumes and the number of products made by social businesses.
IKEA Social Entrepreneurship is a business that started with the vision of honouring unique skills and competences and gives them a global platform to stand on – resulting in better lives for those who need it most. This has been accomplished by partnering with enterprises that produce products and services that in turn empower people who struggle to provide for themselves and their loved ones. The result is financial independence and life-changing opportunities for families and communities; with improved health care, education and gender empowerment
Working with IWAY
IKEA has high standards for all suppliers through something called IWAY. IWAY sets social and environmental requirements for all IKEA suppliers; making sure that people are well treated, resources are protected, and workspaces are healthy and safe. A social business meets these standards, but chooses to go beyond IWAY to reach people furthest from the job market.
More than 2 billion people struggle to provide for themselves and their families, through no fault of their own. The IKEA Social Entrepreneurship initiative sees these people as valuable competencies.
Today, there are
- 1.8 billion people in fragile contexts
- 69 million forcibly displaced people, such as refugees
- 750 million children in poverty
More than 2 billion people struggle to provide for themselves and their families, through no fault of their own. The IKEA Social Entrepreneurship initiative sees these people as valuable competencies.
Growing ambitiously
The partnerships between IKEA and social businesses have grown steadily since the start in 2012, initially employing a modest 100 artisans and selling only in selected markets. Today IKEA partners with 12 social businesses for global product offers with majority of them operating in rural areas with a focus on women, youth and persons with disabilities.
Co-creating handcrafted products provides a unique offer for IKEA customers, while preserving the knowledge and local craft traditions. It also creates many work opportunities. Today over 20,900 people have found long-term jobs through this production, together with social businesses.
Within food products IKEA are piloting chocolate and coffee made by social businesses, to understand how social businesses can improve working conditions and livelihoods within the agricultural and food processing sector.
There's more work ahead
"Since the start 2012 we have learnt a lot. Co-creation of unique products for a few markets has now become a global part of the IKEA range offer. In the. coming years, we will see more global products made together with social businesses - all with the aim to create long term jobs for people that need it the most. We want our customers to be able to, all year round, find the products from social businesses around the world - bringing hand crafted products with a unique story into their homes.”
Marie Olsson, RA Manager
The result of IKEA partnering with social businesses has always been a selection of affordable limited edition collections and products. These collections and products are key in keeping the IKEA offer exciting and unique. And with global products available throughout the year, items from a social business are always accessible at IKEA.
The first limited edition collection ever made by IKEA and social businesses was BEDRIVA, back in 2013. The collections and products have developed a lot over time, yet are more important than ever.
The LOKALT collection
LOKALT, means ‘Local’ in Swedish, and is the latest collection co-created with social businesses. For this project IKEA tried something new: to collaborate with local designers and social businesses in India, Jordan and Thailand. Together with fashion designer Tania Haddad from Amman, the design duo Ploypan Theerachai and Decha Archjananun based in Bangkok, and Akanksha Deo based in Delhi, the collection LOKALT was given life. Local stories, told by local designers, and made by local artisans.
The IKEA social entrepreneur business model
By combining local expertise and craft skills from social businesses with competences in design, product development and logistics from IKEA, unique products and services come to life.
“My husband and others at home wanted to stop me, said it was all lies. But I said that “This is an opportunity”, whether it was a lie or not. I went there after many arguments at home. I wanted to make something out of myself."
Saroj, Craft Manager, Rangsutra, India
“We believe in being the change we want to see in the world. The change we envision is a more just and inclusive world where everyone has the chance to grow. When women in marginalized communities are empowered, skilled and employed, they ignite transformation within themselves, their families and communities, resulting in change.”
Sumita Ghose, Founder, Rangsutra
“As a designer in current times, we have a responsibility to add value to the community through our work. The handmade cushion covers we’ve created tell the story of craft and the artisans in Bikaner, in northwest India. The cushions combine Scandinavian design and Indian roots, and we are proud to have them celebrated and enjoyed on the global market.”
Akanksha Deo, Designer, India.
“At the core of social entrepreneurship lies love, and this love is what drives my passion for our people and products. I find it personally fulfilling to have the responsibility of helping the artisans become self-sufficient and working together to create exquisite handmade collections for IKEA.”
Simi Gauba, Product Design Developer
It’s not a business as usual. But it’s business for sure
The key to a successful partnership is that the benefits are mutual. The same goes for IKEA Social Entrepreneurship, where the enterprises and IKEA gain valuable know-how from each other; resulting in unique and covetable collections, products and services.
IKEA and the social businesses have shaped their working relationship on knowledge sharing, a mutual exchange of competences and inspiration. The social businesses ensure a diverse and unique product offer, meanwhile, IKEA uses its network to supply the enterprises with affordable, high-quality raw material, extending their infrastructure to the social enterprises. IKEA knows what consumers want and how to produce efficiently, resulting in unique and affordable products available to customers across the world.
The power of scale
Like ripples on a pond, each successive layer reaches farther and impacts more lives.
It starts with the skilled co-worker…
Local artisans, farmers and specialists, on their own, often struggle to provide for themselves and theirfamilies, making them vulnerable an unable to escape the poverty trap.
…who comes into contact with a Social business…
Social business employ local artisans into decent jobs, providing them opportunities to build skills andimprove their own livelihood.
… and then IKEA comes into the picture…
IKEA Social Entrepreneurship partners with social business to scale up their impact, supporting withknowledge and expertise around product development, logistics and supply.
…and engages with Global markets…
The IKEA global sales channels enable social businesses to scale their production and their impact and improve livelihoods for even more of the many vulnerable and marginalised people.
Inspiring others
When big businesses show the way in creating a more fair and equal society, it creates a ripple effect inspiring other businesses to follow.
Creating independence takes time
One of the main goals of this initiative is to make the partners more employable, and therefore more independent. By transforming learnings into other aspects of their business, they can also diversify and grow. This has always been important, as these business partners should not become too dependent on IKEA. Instead, the aim is to create prerequisites, enabling them to reach out to other customers and expand.
From small and limited to global collections
Our partnerships with social businesses has grown over time, to secure the long-term commitment IKEA wants to have with all suppliers. This is even more important when collaborating with social businesses whose employees come from vulnerable groups – people who are most affected by loss of income.
Today we have built a portfolio of products that are sold globally across all IKEA markets. We provide the platform for consistent jobs and scale, and are now continuing future developments, with more collections each year.
IKEA social business partners
Accelerating through support
Since 2019, IKEA has also been supporting social enterprises worldwide through accelerator programs that are not directly related to the IKEA business. The ambition has been to expand ways of supporting social enterprises to scale up their impact through grants, loans, IKEA co-worker mentorship, business development and more; testing, piloting and finding new ways of creating lasting change. During FY20, 36 social enterprises were supported through our accelerator programmes or directly, with 77 IKEA co-workers acting as advisors and coaches. This resulted in 1.65 million people impacted through access to jobs, incomes, tools and services.
One of the social entrepreneurs is Fernando Assad from Brazil. Through his organisation, Programa Vivenda, he provides affordable house renovation to mitigate the unsafe housing situation in Brazil’s favelas. There are about 40 million people in Brazil living in 11 million inadequate houses which pose health risks.
Learn more about how Fernando is working to improve families' living conditions in Brazil.
For the future, we will continue to develop new global collections and collaborate with social businesses long term. It's a win-win for all: The collaborations provide IKEA with a better understanding of how to create change through the businesses, our customers can buy unique, handcrafted products in IKEA stores around the world, and crucially, we can offer long-term job opportunities and improved livelihoods to people who need it the most.