TRADITIONAL CRAFT SECTORS AND ECOLOGIES OF TRADITION

DRAFT FOR INTERNATIONAL WORKSHOP ON CRAFT AND EMERGING FORMS OF

ORGANIZING

Kiyohiko Ito, Schidler College of Business, University of Hawaii at Manoa

Elizabeth Rose, Indian Institute of Management, Udaipur
D. Eleanor Westney, MIT Sloan School of Management & Schulich School of Business

1. Traditional Sectors and the Challenges of Organizational Change

In a surprising number of industries, we can find traditional sectors where methods of

working and operating that developed in earlier centuries have been preserved in what
population ecologists would call “niches” with the larger industry. These traditional niches have
persisted in countries that experienced industrialization over a century ago, in industries that
have pre-industrial roots, such as foods, textiles, weaponry, writing materials and instruments,
musical instruments, clock-making, building, brewing, distilling, and even some service sectors
such as health care, entertainment, and inns and eating establishments. The viability of these
traditional niches, which are a subset of the larger category of craft and creative sectors, has
waxed and waned over time, even before the modern era, and their salience in the larger
industries varies considerably across sectors and across locations. As the larger industry and the
social and economic worlds around them have changed and continue to change, these traditional
sectors must adjust and change – and yet not changing (that is, preserving traditional ways) is
essential to their continued survival.

Interest in traditional sectors of industries has grown over the last three decades. In
reaction to the perceived homogenization and commodification of late 20th and early 21st century
globalization, many consumers have become increasingly drawn to products perceived as
traditional, perpetuating ways of working and organizing that are “authentic,” and growing
demand and interest have expanded the market for the traditional sectors of a wide range of
industries (Campbell, 2005; Carroll, 2015; Wilkinson-Webber & DeNicola, 2020). Increasing

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ecological anxieties have also raised interest in traditional sectors, which are seen as having the
added virtue of sustainability, employing natural materials and production methods from an
earlier and much less wasteful time, and minimizing the use of the fossil fuels that have
dominated industrialization. The expanding markets for traditional products have led
development agencies and NGOs to see these traditional sectors as a viable path for revitalizing
local communities in developing countries and among indigenous communities in the highly
developed nations (Scrase, 2009; Wilkinson & Nicola, 2020). Ironically, the resulting expansion
of demand for products from these sectors has created further challenges for the difficult balance
between stability and change in modes of organizing and operating.

Academic research on traditional sectors has also expanded considerably in the past three
decades. Mirroring their niche position within larger industries, research on these sectors has
tended to be a niche activity in the study of a wide range of industries, including the creative
industries (e.g. Luckman, 2015; Vencatachellum, 2018); tourism (e.g. Bessière, 1998); health
care and pharmaceuticals (WHO, 2005); food (e.g. Blundel & Tregear, 2006); textiles (e.g.
Nakatani, 1999); beer (e.g. Cabras & Bamforth, 2016); and pottery (Paredes, 2018). Traditional
sectors as a category have also attracted attention from scholars in the fields of history (e.g. Roy,
1999), industrial districts (e.g. Tolliday & Yonemitsu, 2007; LeBlanc, 2010), design (e.g. Lin,
2007), cultural studies, gender studies, and marketing (e.g. Hartman & Ostberg, 2013), and
anthropology (Wilkinson-Weber & DeNicola, 2020).

In addition, social scientists have become increasingly interested in two aspects of

traditional sectors. One focuses on the ways of working embodied in the concept of the craft,
using the term heritage or traditional craft to distinguish it from the much larger categories of
modern handcrafting, industrial crafts, and those creative industries that are organized by
specialized crafts (Luckman, 2015; Ravasi et al, 20). The other focuses on the ways of
organizing and managing exhibited by long-lived traditional enterprises, many of which have
continued to be family-owned and operated across many generations (e.g. Sasaki et al, 2019).
The former focuses on the organization of work; the second on the organization of the business
enterprise. Understanding stability and change in traditional sectors demands both: that is, the
craft-based work process in traditional enterprises, and the nature of the enterprise in the
traditional craft. These two different but complementary approaches both emphasize the extent to

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which change and stability in traditional sectors cannot be understood without looking beyond
both the craft and the enterprise to the economic and social-cultural infrastructures that sustain
them while the larger industry to which they belong is transformed by new technologies and
ways of organizing.

This paper is a very preliminary exploration that builds on this diverse literature to
understand how organizing and operating in these traditional sectors of larger industries has
responded to changes in the economic and social environments in the countries that
industrialized in the 19th and early 20th centuries, and how these sectors have balanced the
potentially competing pressures for innovation and preservation. We use the concept of the
ecosystem as a framework for exploring areas of further inquiry and research. We define
“traditional sectors” as those which preserve ways of operating and organizing that build on
preindustrial models. It also invokes a deeper meaning of “traditional” than simply originating in
some earlier time. A leading modernization theorist identified the defining feature of traditional
economic activity as “the emphasis on continuing to do something in a specific way because the
perpetuation of doing it that way is regarded as good, respectful, and right” (Levy, 1966: 108).
As a later definition asserts: “A living social tradition, I argue, must engage a group of
practitioners who have a sense of community based on a shared identification with a particular
past” (Scares, 1997). Traditional sectors cannot be understood simply as economic activities;
values, identity, and community are equally if not more important. They therefore operate in two
ecosystems: an economic ecosystem and a socio-cultural, normative ecosystem.

2. The “Niche”: Sector Dynamics and the Economic Resource Ecosystem

At its simplest, ecology looks at the interactions between organisms and their
environments (Lejano & Stoloks, 2013). Drawing on this perspective, the term “ecosystem” is a
biological metaphor used in sociology (and increasingly in the field of strategy) to refer to a
resource environment shared by a species that both produces and takes in resources from the
environment. This framework has been at the core of organizational ecology, in which the
species is a kind of organization, an organizational form, which is portrayed as an input-
throughput-output model. Organizational ecologists in sociology (for an overview, see Hannan
& Amburgey, 2005) have defined niches within an industry as “those combinations of resource

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levels at which a population [of organizations] can survive and reproduce itself” (Hannan &
Freeman, 1977, p. 947). In addition to the sources of inputs and the market for outputs, they have
acknowledged the importance of regulatory authorities in shaping both the nature and availability
of inputs and the markets (in the broadest sense) for outputs.

In their initial, somewhat polemical development of the organizational ecology approach,

Hannan and Freeman (1977) insisted that organizations had very limited capacities to adapt to
changing environments and that unless a subpopulation of organizations could shelter in a
protected niche where it could continue to have access to needed resources and a market for its
outputs, it would disappear, replaced by organizational forms better adapted to the changed
resource environment. The extensive and ongoing debate among organizational sociologists on
the capacity of organizations to change in response to changing environmental opportunities and
constraints is less relevant for the current topic than the insight that many organizations try to
change when their environments change but fail to do so, whereas in traditional sectors,
organizations resist changing but do.

That traditional sectors are usually identified with a particular place aligns with
organizational ecology, which would predict that traditional sectors that managed to survive
would do so in protected local niches. Sometimes these were small communities distant from the
growing urban and industrial districts of the industrial era. In these communities, transport and
communications difficulties limited access to the new industrial products or made them
prohibitively expensive. Local production used local inputs that were usually readily available
and shaped the products in important ways (the heavy clay in Japans Mashiko pottery region, for
example). Traditional sector enterprises developed close relationships with suppliers of key
inputs, as they did with customers. By the time industrial products entered these local markets,
the traditional sectors that continued to survive had found a market in which the traditional
products and modes of production using locally-specific materials were vested with value, for
which customers would pay, and often pay a higher price. In some cases, such as sake in Japan
or local breweries in Germany, these customers were local; in other cases, customers were drawn
from more distant locations by the value they attributed to the traditional product or service
(examples include traditional inns or handicrafts such as pottery). In other cases (such as
traditional tatami mat makers in Tokyo or bespoke bootmakers in London), traditional sectors

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managed to survive in large urban centres, but usually in specific neighbourhoods or even
specific buildings, often catering to a small but stable market. The close, mutually beneficial and
accommodating ties with suppliers and customers were a notable feature of the economic
ecosystems of those traditional sectors that survived. Customers is a category that can include
both individual users and specialized intermediaries (such as galleries for many crafts,
restaurants in the food sector, specialized merchants for other products). This is a feature worth
noting, given that some scholars in the Strategy field have recently touted relational, mutual
benefit ecosystems as a development of the 21st century enabled by the density of information
exchange made possible by ICT (see for example Adner, 2023).

Traditional sectors face challenges in terms of both inputs and inputs. On the input side,
traditional sectors have faced challenges as local sources of cheap, familiar inputs have
contracted or even disappeared. Thatching in the UK provides an interesting example. The
advent of mechanical harvesters and balers after World War II dramatically reduced the
availability of the long straw needed for thatch, and land reclamation and urbanization eliminated
most sources of reed. Several business models developed to adapt to the changes. Some thatchers
have turned to growing their own materials, others have developed sourcing networks with more
distant producers, first in other western European countries with traditions of thatching (the
Nordic countries, the Netherlands), and then eastern Europe. Today, China has become a
significant supplier of thatching reed to the UK and other countries (Wichmann & Köbbing,
2015). Another crucial input that faces challenges concerns labour: the potential labour pool in
most traditional sectors has contracted (in some cases, even family members, a traditional source
of recruits, have turned to other occupations and moved away).

For many traditional sectors, maintaining enough customers to sustain the enterprises has
been an enduring challenge, particularly in areas where local economies (and populations) have
been in decline. For the most part, enterprises in these sectors have increasingly targeted more
affluent customers (thatching, for example, has gone from a ‘poor man’s roof’ to a ‘roof for the
rich’). In the 21st century, the rapidly falling costs and dramatically increased capacity of
information and communications technology networks has provided new ways for enterprises in
traditional sectors to connect with potential customers, both local and distant. Today enterprises
in these sectors must either have or hire skills for managing on-line websites and customer

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interactions. In some sectors, the principal challenge on the output side of the ecosystem has
changed in recent times to that of meeting growing demand, because the modes of working and
organizing in traditional sectors impose inherent limits to scale. Finally, many traditional sectors
faced challenges from regulatory authorities whose statutes and regulations aimed at the larger
industry had unanticipated effects on traditional sectors (for example, food or building safety
regulations).

While these challenges come from the resource/economic ecosystem of traditional sectors,
addressing them effectively has often drawn on another important ecosystem: the socio-cultural.

3. The Socio-Cultural Ecosystem

By the early 1990s, the range of disciplines and perspectives using ecological approaches
to industry and organizational analyses had expanded significantly, and some of these, most
notably institutional theory in sociology, included institutional and socio-cultural concepts in
analyzing industry environments (Amburgey & Rao, 1996). Values, identities, industry belief
systems, and the social processes involved in building and sustaining them (see for example
Porac, Ventresca, & Mishina, 2005) have been recognized in sociology as significant elements of
industry environments, although in recent decades institutional sociologists are more likely to
speak in terms of institutional fields rather than industry environments. For traditional sectors,
where values and identities are crucial to their capacity for creating economic value, the
organizations and social processes that define “tradition” and “authenticity” have become foci
for social science research (Carroll, 2015; Thurnell-Reed, 2019; Wheery, 2006). The continuity
with the past that defines “traditional” has both economic and socio-cultural value, and yet the
changing economies and societies within which traditional sectors operate can pull them away
from the practices and values of the past. Maintaining stability and continuity within these
changing larger contexts draws on extensive networks of organizations that reinforce the larger
value of the sector and provide support and legitimation for changes needed for the sector to
survive (see for example Raitis et al, 2021).

The socio-cultural ecosystem of most traditional sectors centres on the associations

formed by traditional enterprises. These provide opportunities for enterprise owners to learn

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from each other within the sector, build support among potentially influential constituencies
(such as networks of customers), reinforce the distinctive identity and values of the sector, and
influence government regulations that might inadvertently harm the traditional sector (such as
local government building or zooming codes). Whereas in most modern industries, industry
associations focus primarily on this last role (influencing regulators), in traditional sector
associations this is usually the least salient role. The primary level on which the earliest
associations in a traditional sector formed and with which most enterprises in traditional sectors
are most closely involved, are local/regional associations. These often have become affiliated
with later-developing national associations (whose members are the local associations rather than
individual enterprises). In some traditional sectors, a global level has developed, with UNESCO
and affiliated organizations promoting the preservation of traditional sectors, especially in less
developed areas.

In addition, the socio-cultural ecosystem can include a range of actors who are not
themselves practitioners but are important in perpetuating both the values and value of the sector.
They provide both display venues (such as galleries, museums, restaurants) and, equally
important, information and education for potential customers and even potential recruits to
employment in the sector. The socio-cultural ecosystem may also include related sectors that
share similar values and may also share aspects of the resource niche (such as the building
preservation movement for thatching, or gastronomic tourism for traditional food enterprises and
eating establishments, or heritage and cultural tourism for many handicraft sectors). Research
focused on the socio-cultural ecosystem (culture, values, and identity in the sector) has tended to
focus more on its conserving activities than the extent that it facilitates learning about potential
alterations to traditional business models and legitimating those models both for practitioners and
for potential customers. However, both activities – encouraging the preservation of traditional
ways of organizing and enabling and legitimating change – are important for understanding the
complex interplay of stability and change in traditional sectors. Many traditional sectors today
face challenges because, paradoxically, their socio-cultural ecosystems have been effective in
establishing their cultural value, and this in turn has created pressures for expansion. Historically,
enterprises in traditional sectors have valued steady and predictable throughput (at a level that
sustains the enterprise) rather than growth, which has been the major driver of business models
in the larger industry.

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4. Re-creating and Building New Traditional Sector Ecosystems

The last two to three decades have witnessed a number of efforts to revive or revitalize
traditional sectors that have either been eliminated by colonialism, war, revolution, and/or
economic change or have been practiced within households on a part-time basis for household
use or local barter or sale (Thai & Turkina, 2012). Examples include craft sectors in Turkey
(Gumus Ciftci & Walker, 2017), textiles in various regions of India (Singh & Gupta, 2019),
aboriginal crafts in Taiwan (Lin, 2007), and a range of traditional handicrafts in China (Chen,
Ren, & Zhang, 2021). Both the role of the two ecosystems – economic and socio-cultural – and
their development over time is obviously quite different from those of traditional sectors that
have survived within their larger industries for a century or more.

Both ecosystems must be constructed quite quickly, and a much larger role in both is played
by outsiders to the local sector. Local and even national governments, NGOs, and social
entrepreneurs play significant roles in constructing and maintaining both ecosystems. In the more
continuous traditional sector ecosystems that were the focus of the previous discussion,
preserving as much as possible the throughput patterns– work processes and systems – was a
priority for most actors in the economic and socio-cultural ecosystems. In contrast, in the context
of reviving or even creating ecosystems to establish an economically viable sector that can
contribute to regional development, much of the traditional rhythm of production has either been
lost or, in its local as a part-time household activity, is not sufficient. The actors and processes –
the nature and levels of agency – involved in re-forming throughput processes vary enormously
across contexts and are often a matter of contention. In some sectors, for example, professional
designers have become involved in working with local artisans to adapt traditional designs to
modern consumer tastes (Lin, 2007). Changes in the input side of the ecosystem to accommodate
increased production volume and building new infrastructure on the output side are also
challenges that involve both local and non-local actors in ways that will likely differ substantially
from those in long-established traditional sectors.

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