Giving Compass' Take:

• The Aspen Institute makes the case for investing in artisan businesses around the world and the need to explore new models for financing small business owners.

• For those engaged in microfinancing, boosting local artisans is a great way to lift people out of poverty and give under-served communities an opportunity to thrive.

Learn more about the work of female artisans in India.

Artisans, farmers, and small business owners are an integral part of all communities, whether in the rural US or a huge international city. The artisan sector is a key driver of economic growth, job creation, and cultural preservation. It is the second-largest employer in the developing world, behind only agriculture, generating incomes and providing important and unique skills development — particularly to women. Artisan businesses help expand opportunity by diversifying and stimulating local economic activity and creating new jobs that can help families and communities thrive.

Investing in the artisan sector is not charity — there’s incredible economic potential with even more opportunities to be realized. According to the United Nations Conference on Trade and Development, the global artisan market generates an estimated $34 billion a year, and the demand for handcrafted, authentic, and locally produced goods is growing. More and more individuals, foundations, businesses, and banks are seeing this artisan entrepreneurial space as an investable sector.

Despite the growing influence and impact of the artisan sector, access to capital remains one of the main barriers facing creative entrepreneurs.

There are many ways to help bridge this gap. On February 7, in a forum hosted by the Aspen Institute and Clinton Foundation, participants discussed the different mechanisms to deploy capital, including impact investing products, which generate both social impact and financial return for investors; or royalty arrangements, which can produce returns over time without compromising an artisan’s financial independence.

Read the full article about how to support artisan businesses by Peggy Clark and Gregory Milne at The Aspen Institute.