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 the IKEA social entrepreneurship program creates work for more than 30,000 people, with products available globally. The ambition? To scale up our global purchasing, increase volumes and number of products made by social businesses, both by new and existing partners.
A huge part of these jobs will come from partnering with social businesses in the healthy and organic food sector, such as snacks, coffee and tea. Purchasing the final product directly from these social businesses – instead of having it refined and packaged in Europe – will keep funds closer to the source. This way, the profit remains within the countries that need it most, in turn generating even more jobs.
There’s more work ahead
“I’m very proud of what we’ve accomplished, and I know that we can do much more,” says Vaishali Misra, who has been a driving force behind IKEA Social Entrepreneurship. Eight years ago, she was one of the people who set up the initiative. As Business Leader for IKEA Social Entrepreneurship, a role she held until Spring 2021, she was responsible for steering the direction, framework and selecting the partnership sponsors – working with the social impact offer throughout the IKEA organisation. Here she looks back on the journey, sharing her hopes for what this can mean for IKEA and retail in the future.
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
“Social enterprises around livelihoods are actually quite rare, but those are the ones that need to be scaled, which is about putting money in the wallets of the poor. That’s why the relationship with IKEA is even more critical, because unless social enterprises engage with big business, we’re not gonna see scale. We need the power of big business behind us.”
Neelam Chhiber, Managing Trustee, Industree Craft Foundation, India
“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.
“The ambition for this partnership is to create jobs and integration for female refugees, mainly from Syria, together with female Jordanian artisans. We do this through a business collaboration, where we create beautiful, handmade products. It is a co-creation where IKEA co-workers contribute with their knowledge in product development, logistics and supply and JRF are sharing their unique craftsmanship and local design heritage.”
Ann-Sofie Gunnarsson, Partner Development Leader IKEA Social Entrepreneurship, IKEA of Sweden.
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, one can also diversify and grow. Vaishali explains, “If the vulnerable and marginalised gain access to education and practise, they have all the passion in the world to prove themselves and become self-sufficient. This has always been important to us, as we do not want these business partners to become too dependent on IKEA. Instead, we want to create prerequisites to reach out to other customers and expand.”
Beyond limited edition collections
Much of the collaboration between IKEA and social businesses have resulted in limited edition collections, which sell in all markets globally. While these collections have been instrumental for giving the initiative a face and continuously vitalise the IKEA range, the business is actually much larger.
“The limited edition collections have been essential for many reasons. But by integrating the unique products that these enterprises produce throughout the total IKEA range, we can increase volume and offers better preconditions for our partners to earn a stable income. This is the model for how we build a more sustainable business in the end – with products that are beautiful, impactful and commercial,” explains Vaishali.
Examples of 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.
The ambition is set: IKEA has made the commitment to continue to scale up over the coming years, expanding through both existing and new partners and by focusing on both global home furnishing products and responsible sourced food products. Beyond this, IKEA has a vision that could change the very core of their supply-chain, with fairness and equality integrated throughout the entire IKEA business.
“My hope is that the entire IKEA supply chain becomes more inclusive; delivering to our economic, environmental and social agenda,” says Vaishali. “We’re soon joining hands with some highly established social businesses, and we will learn so much from them. Just imagine if all of our suppliers over time could work this way – becoming social businesses – by economic empowerment taking responsibility for the vulnerable and marginalized. This would impact the total IKEA business, not just bits and pieces. Then we could also inspire other retailers to do the same. That’s what I call impact!”