Shojanoori et al., Int. J. Rev. Life. Sci.

, 5(10), 2015, 91-102

ISSN 2231-2935
Research Article
www.ijrls.pharmascope.org

An Analysis of the Environmental Factors Influencing the Handicraft

Development
Foroogh Shojanoori 1*, Maasoumeh Jamali 2, Farzaneh Honarbakhsh3, Nikoo Shojanoori4, Morteza Akbari5
1
Assistant Professor of the Women Research Center; Alzahra University
2
MA in Entrepreneur Ship from the Tehran University, mjamali89@ut.ac.ir
3
Academic Member of the Art Faculty; Alzahra University, f.honarbakhsh@alzahra.ac.ir
4
Academic Member of the Art Faculty; Alzahra University, n.shojanoori@alzahra.ac.ir
5
Assistant Professor of the Entrepreneur ship Faculty; Tehran University, mortezaakbari@ut.ac.ir

ABSTRACT

In today's global policy, in order to achieve a sustainable development, the handicraft sector has received a par-
ticular attention as an important part of cultural industries. The present article mainly attempts to study the envi-
ronmental factors affecting the development of the handicraft and its competitiveness in domestic and interna-
tional markets. Handicraft development is influenced by tourism industry development and represents the local
traditions and indigenous populations, as well as a symbol of places visited by tourists. Thorough review of envi-
ronmental factors influencing the development of the handicraft, both internal and external environment, is es-
sential for adopting appropriate policies. Because from one hand, compliance with these conditions is essential for
the survival of businesses and on the other hand identification of these factors enable governments to develop
this critical industry and to generate wealth inside the country by the adoption of effective laws and regulation.
Using descriptive-analytical methods and by collecting relevant information from various sources, the present
article attempts to investigate political, economic, social, technological and other factors associated with handi-
craft development. A study of strengths and weaknesses, threats and opportunities in the industry indicates that
the development of handicraft depends on quality enhancement and paying special attention to the needs of the
market, to compete in domestic and global markets. In this context, paying attention to the nature of the handi-
craft, manpower employed in the industry, investment, technology level, the necessary infrastructure and geo-
graphical distribution of production sites are of great importance. It seems that by improving the business envi-
ronment, the development of use of new technologies, create incentives to increase private sector investment, it
is possible to help the development and competitiveness of the handicraft industry.
Keywords Cultural Industries; Handicraft; Handicraft Development.
INTRODUCTION ical policies. Such policies can help the development of
rural areas and reconstruction of remote cities and
Nowadays, the cultural industry in more developed or
play significant roles in the poverty eradication, job
developing countries has received special attention.
creation, enhancement of local economy in remote
This industry includes large sections of economic and
villages and towns and also increased self-confidence.
artistic activities, including handicraft, music, cinema,
So it is reasonable to adopt appropriate and coherent
printing, publishing, and multimedia industry.The
logistic, industrial, cultural and commercial policies,
common characteristic of cultural industries is that
along with creating a perfect environment to develop
they all utilize creative, cultural knowledge and intel-
and encourage such type of industry (UNIDO &
lectual property for their products and services with
UNESCO, 2005: 11).Many countries also benefit from
social and cultural meaning. Recent international at-
the handicraft as a part of cultural tourism, because
tention paid to cultural industries is considered a as
handicraft industry is regarded as a source of job and
part of the emerging worldwide strategies for sustain-
income for them. Handicraft is an integral part of the
able development (UNESCO, 2007: 3-11).In many de-
tourist experience that represents the local traditions
veloped and developing countries,the promotion ofthis
and indigenous populations, as well as a symbol of the
category of industries has been incorporated into polit-
places visited by tourists and their experiences (Mosta-
fa, 2011). Handicraft is an ideal subject for creative
* Corresponding Author entrepreneurs as a means of subsistence and inde-
Foroogh Shojanoori pendence (Barber &Krivoshlykova, 2006).Despite the
fshojanoori@alzahra.ac.ir many attempts that have been made in the develop-

©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences 91

ment of handicraft in Iran, this industry suffers from a
severe recession. Malekjany (2008: 99) states that the
status ofhandicraft in Iran economy is minimal. While
Arthur Pope (2008: 10-6) argues that Iranian art is an
important historical phenomenon. Malekjany (2008)
also argues that the attractions of the handicraftthat
roots from the nature, culture and religion of Iran is a
boon for Iran economy. In case it was possible to con-
vert handicraft would into the capabilities powerful
enough to generate constant currency exchange reve-
nue, the country's socio-economic sustainable devel-
opment would be highly likely. It seems that the most
basic and prominent profession of Iranian ethnic
groups has been paying attention to art ranging from
writing to clothes and furniture and war tools. Howev-
er, Brojeni (1999) argues that the handicraft has not
been able to sustain its prominent status as in old days
and the exporting of handicraft is not satisfactory. Here
the question is what factors are important in the de-
velopment of the craft? And what are the characteris-
tics of the environment that influences the handi-
craft?Therefore, the main objective of this study is to
identify the environmental factors affecting the handi-
craft production in Iran.In other words, this study seeks
to answer the question of what are the environmental
factors influencing the development of handicraft?
Finding an answer to this question is important due to
the fact that the existing agencies in each industry an-
ticipate the present and future trends and situations by
examining the factors influencing that industry. And on
the basis of such anticipations, it is possible to adapt to
changing conditions.
THEORETICAL LITERATURE
Definitions
1-Cultural and creative industries: the concept of “cul-
tural industries” is almost synonymous with the con-
cept of "creative industries”. While the former places
more emphasis on cultural heritage and artistic and
traditional elements, the latter underlines individual’s
creative talent and innovation and also exploitation of
intellectual property (UNESCO, 2007:11). However,
UNIDO (United Nations Industrial Development Organ-
ization) and UNESCO (2005:11) are referred to as a
group of cultural and creative industries that can lead
to tangible or intangible artistic creative output and
have sufficient potential for income generation
through exploitation of cultural property and produc-
tion and also services built upon artistic knowledge (
both traditional and modern), and include thirteen
sub-categories namely advertisement, art and antiqui-
ties, architecture, handicraft, painting, fashion, cinema,
interactive leisure, music, performing arts, publishing,
television and the radio.
2-Handicraft: handicraft is defined by a group of hand-
icraft scholars as a set of art-industry that the resultant
hand-made product and object is designed and con-
structed by using local raw material and performing a
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
part of basic production stages by hand and hand tools.
Each piece of such hand-made products manifests ar-
tistic taste and intellectual creativity of its maker and
this is the main distinguishing factor of such products
from machine and factory artifacts (Yavari, 2010:7).
2-1 Characteristics of Handicraft
UNESCO (2007: 12) regards common and unique fea-
ture in all of the cultural industries, including handi-
craft, as human skills and knowledge involved in the
process of production. According to Yavari (2010: 8)
some characteristics of handicraft include performing-
some basic production stages by hand, providing the
bulk of raw materials from local sources, having cultur-
al meaning, the lack of need to invest a lot, the ap-
plicability of its products, having a value added high
compared with other industries, the ability to create
and develop in different areas (urban, rural, and tribal
communities), mobility of experiences and production
secrets and techniques in oral from or according to
teachers and students’ procedures.
The handicrafts can also have other advantages such as
proper work hours, possibility to work at home, free-
dom in managing the business, and proving those with
a limited economy and cash with a high level of self-
sufficiency (Barber &Krivoshlykova, 2006).
2-2 Economic, social and cultural consequences on
handicraft development
Handicraft along with information technology and
communications (ICT) is an integral part of new
knowledge-based economy. Such industries ranging
from handicrafts to performing arts and multi-media
development have become the sectors undergoing
quick economic growth following industrialization
(UNESCO, 2007: 3). Regarding the significance of hand-
icraft in economy, Malekjani (2008) states that in case
it was possible to convert handicraft would into the
capabilities powerful enough to generate constant cur-
rency revenue, the country's socio-economic sustaina-
ble development would be highly likely. This is because
one of the main strategies to protect Iran economy
against the destructive effects of price volatility and
instability in the market of other products is the devel-
opment of handicraft. Furthermore, handicraft devel-
opment can bring about more efficient wealth distribu-
tion and balanced development of underprivileged
area. Yavari&Nourmah (2001:27) believe that revival
and development of handicraft can result in generative
job creation for a variety of urban, rural and tribal
population. On the other hand, UNIDO & UNESCO
(2005:11) state that the handicraft play a critical role in
the development of tourism, indigenous economy and
job creation (Muhammad AbiSofian, Azman, 2010).
Also, strengthening such industries is a key to sustain-
able development and thus development and exten-
sion of traditional sectors in a community in which
poverty has been deeply rooted. Therefore, in the re-
cent years, much emphasis has been put on the en-
92
 Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102

hancement of culture in the national development time in the offices of handicraft industry and executive
plans as a tool to achieve sustainable development, research centers in different provinces. Another chal-
because cultural industries play key roles in the ac- lenge of the present study was dispersal of production
complishment of such strategies (UNESCO, 2007:3). units that made difficult familiarity with the problems
of manpower and their production techniques and so
UNIDO & UNESCO (2005:11) highlight the impact of
there is not accurate and comprehensive statistics for
handicraft in creation of social capital and reducing
doing effective evaluations.
poverty along with other achievements. They also state
that it is logical to adopt coherent logistic, industrial, Use of PEST Matrix in the analysis of internal and ex-
cultural and commercial policies, along with creating a ternal environment of handicraft industry
perfect environment to develop and encourage such
1- External Environment:
type of industry. The future development of handicraft
is essential due to two reasons: firstly, inheritance of 1-1 Economic Factors
traditional culture in terms of preservation, mainte-
The investment of the private sector is one of the most
nance, and also promotion of traditional handicraft,
significant variables of macro economy in each country
and secondly, to promote local cultures and industries
that its evolutions is closely associated with economic
and to find new development directions in this context
development and is of critical significance (Arabmazar,
(Dan Lin, Shiang Li, 2010).Michael Keane, quoting from
Nazarigovar, 2012). The investment in Iran handicraft
Hu Huilin (2007) states that the practitioners of domes-
sector is under influence of a series of factors that are
tic cultural industries should be encouraged to export
sometimes motivating and sometimes threatening that
cultural products to external markets because this
will be further clarified later.
leads to further protection of cultural security against
cultural imperialist powers in the world. Also, Yava- 1-1-1Inflation Rate
ri&Nourmah (2001:27) regard other consequences of
Inflation rate is a harmful economic phenomenon that
handicraft development as reduced migration to cities,
can impose a high and acute rate of social and eco-
fringe income for rural and tribal people and conse-
nomic costs on communities. According to the Iran
quently agriculture and husbandry boosting, further
Central Bank report on the inflation index, since 1936
social equilibrium, ethnic heritage and national identity
to 2012, this index has been constantly positive and it
preservation.
has been two digits especially in late 20 past years (Iran
Research Methodology Central Bank, 2013). The impact of inflation is the con-
stant increase in prices, thus it can reduce customers’
The research was done based on a descriptive-analytic
purchasing power. Inflation rate can have long term
method. The data collection was conducted by a li-
and short term negative significant impacts on private
brary- and field-based method (workshop observa-
sector investment. The results indicate that the impact
tions). The environment was examined both externally
of inflation on investment follows an asymmetric ad-
and internally, and attemptswere made to identify the
justment process. The inflation rate threshold level is
most fundamental environmental factors influencing
estimated by 11.9. In case such rate goes higher than
handicraft industry using PEST Technique as a method
this threshold, the inflation can negatively impact in-
built upon political, economic, social, technological and
vestment, i.e. if the inflation rate is higher than this
legal factors, in order to ultimately obtain a set of in-
level, it can have a reverse and significant impact on
fluential factors and to introduce some proper strate-
investment decisions. One percent increase in inflation
gies for improving the situation given all the relevant
rate higher than the optimal threshold level can reduce
factors, and also to anticipate the probable changes in
investment by 0.283 and roughly by 0.66 in short and
these factors and to measure the possible conse-
long term, respectively.Higher inflation rate can pre-
quences of such changes on handicraft industry. This is
vent investors from retention of their actual property
because the situation of general environment plays
(Arman, Mirabizadeh, 2012). On the other hand, the
significant roles in understanding links between busi-
inflation rate can influence customer purchasing power
nesses and environment (Danaeifard, 2009:115). In
and lowers tendency toward some unnecessary con-
addition, in terms of internal environment, as handi-
sumer goods. UNIDO & UNESCO (2005:15) argue that
crafts are administered often in the form of house-
in case of increase in income further than meeting
holds, small and traditional workshops and without a
basic goods, demand for goods with ethnic identity will
coherent structure and organization, the manpower
be raised, thus a new market created. Consequently,
engaged in this area and technology subcategories are
some opportunities can be provided for cultural crea-
investigated in the current study. Two of the challenges
tive industries both in industrial and developing coun-
faced by the present study include research limitations
tries. As most of handicrafts have lost their applicability
and lack of resources that mainly roots from the relo-
with time, and have become mainly as a decorative
cation of handicraft organization and some books,
object, by a reduction of customers’ purchasing power
documents and research to Shiraz and Isfahan. A por-
tendency toward these artifacts has become progres-
tion of research and books are kept in warehousesand
sively lower and lower and the customers give high
another portion is accessible by investing high cost and
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences 93

priority to more essential commodities. When econo-
my suffers from high inflation, even handicraft con-
sumer goods cannot compete with alternative factory
products that have a lower cost due to the use of tech-
nology and mass production. However, it is possible to
consider the issue of inflation from a different perspec-
tive, and it is that handicrafts are grouped in the cate-
gory of applied industry and huge investment in this
area is not necessary. When a proper strategy and plan
is adapted to lower prices and to make handicrafts
applied and also to incorporate it in household daily
shopping list, economy will be further boosted and a
more secure space can be created for investors and
planners (Aaker, 2007:134).
2-1-1 Unemployment rate
The unemployment rate in 2011 was announced as
12.3% by Iran Statistics Center that was reduced by
1.2% compared to the previous year. This rate in ur-
ban and rural areas is reported as 9.9 and 13.7%, re-
spectively (Iran Central Bank, 2013:29). This report is
indicative of high rate of unemployment in Iran, espe-
cially in rural area and the need to pay attention to
applied and job creator industries.
Isazadeh&Ghodsi, quoting from Aminifard, state that
Iran is one of five historical countries in the world and
one of the ten richest world countries in terms of natu-
ral resources and tourism attractions. Therefore, it is
expected that Iran is able to become one of ten top
countries in terms of tourism attraction. However, un-
fortunately Iran is not even placed among 50 top tour-
ist countries in the world. Tourism industry includes a
wide range of economic activities including production
of souvenirs and handcrafts, which one of the most
significant advantages of tourism industry is that it is
the most important job creator industry in the world.
3-1-1 Interest Rate
The bank real interest rate has a significant and nega-
tive impact on private sector investment in short and
long term. The variable coefficient of bank real interest
rateis estimated by -2.66 in the long term, indicating
that one percent increase inbank real interest ratecan
reduce private sector investment by -2.66 (Arab Mazar,
Nazarigovar, 2012). Providing household workshops
with low-interest bank facilities (e.g. Mehr Reza Fund
facilities) is one of the factors encouraging investment
in household business sector and handicrafts. With
regard tothe problems of handicraft producers with
receiving loans, AlirezaGhafari (2014) states that hand-
icraft is a user-based industry and most of the work is
done by hand. Therefore, in order that a workshop
turns into an economic enterprise, it requires high
number of manpower to achieve a high production
rate. On the other hand, a workshop with 5 workers
and over should pay higher premium and taxation by
23%. Thus, producers must have a high circulating capi-
tal in order to afford high costs relevant to vast work-
shops and high number of manpower and other addi-
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
tional costs. Meanwhile, it is not possible for them to
increase their circulating capital by receiving loan from
banks. This is because all bank loans are accompanied
by high interests which it is not cost effective to do
such work. So even when small scale workshops with
the limited number of manpower are faced with a high
rate of order, it is not possible for them to fulfill all the
orders due to the lack of sufficient manpower. For
example, in 2013, a small workshop that had accepted
an order of 30.000 pieces for New Year market was
able to produce only 4000 pieces with all its efforts and
so it was forced to deliver reminder of the orders to
other workshops.
4-1-1 Currency Exchange Rate
This rate links prices to global market through goods
market and finance, and is regarded as a factor influ-
encing policies, strategies, daily mechanisms,political,
social, and cultural structure. Currency exchange rate
can influence the price of imported goods and service
in domestic market and the prices imported capital
commoditiesand those manufactured inside the coun-
try (MousaviMohseni, Sobhanipour, 2008).
By an increase in real currency exchange rate, non-oil
exports will be increased accordingly. So, it is possible
to introduce real currency exchange rate as a motivat-
ing policy for non-oil exports. However, it should be
noted that currency fluctuations and the impact of
currency risk effect on exports are negative. Risk-
evading exporters react to high rate of currency fluctu-
ations by reducing the export volume. Therefore,
adoption of proper policies to reduce currency volatili-
ty rate and the use of some tools to cover currency risk
are necessary for exporters (Raskhi, Shahrazi&Abollahi,
2013). Pedram, Shirinbakhsh and RezaeiAbyaneh
(2012) argue that an increase in currency rate on the
industries whose exporting goods are dependent upon
facilities, machinery and imported commodities can be
effective, so that whatever the share of such equip-
ment is higher in exported commodities, the price of
exported commodities will be higher and thus it can
lead to the failure of the policy of national currency
depreciation. As it was indicated in defining handi-
crafts, these industries are made of indigenous raw
materials. So increased currency does not significantly
impact the handicraft,which is not dependent upon
capital commodities and imported services, and it has
even a positive impact. However, regarding other types
of handicraft like carpentry that require machinery and
instruments such as gouge, grindstone, file, saw bow
and cutting machines, increase in currency can influ-
ence the finished commodity price to some extent.
Mousavi Mohseni & Sobhanipour (2008) also believe
that depreciation of money can lead to an increase in
the price of imported commodities, thus it can raise
demand for domestic products and enables them to
compete with foreign goods. Though, it should be not-
ed that fluctuations in non-governmental and official
94

rates of currency exchange can affect any volatility and
change in consumer price index and wholesaling as two
real bases for inflation rate. Therefore, in case the
quality of handicrafts was increased same as the facto-
ry products, money depreciation could result in higher
competition.
5-1-1 Government economic policies: Henderson re-
gards one of the challenges faced by rural entrepre-
neurs as remoteness and small size of village and also
the lack of communication infrastructures for access to
market and technical knowledge (Eftekhari &
SajadiGhaidari, 2010:27). Distance is an explainable
issue in rural areas. These areas are remote from main
urban centers and this makes all forms of link and
communication more costly. As the roads and transfer
time are longer, costs are so higher.
Also, many rural areas have a small populations, which
this affects production rate and use of public service. In
the rural areas with limited yet dispersed population,
costs of communication between people through mar-
ket or government intervention is high as well. While if
we want to make rural cooperatives and households
involved in the strengthening of national economy, it is
necessary to provide sufficient service and facilities at
site (OECD, 2010:28). The presence of infrastructure
establishments such as airport, main communication
ways outside and inside provinces, etc. can promote
handicraft productsby directly influencing product sale
and their distribution channels. For example, a study
performed on pottery in Fars Province in 2011 indi-
cates that two workshops established in the city have
been constructed at the vicinity of earth mine 10 km of
Grash City, due to road problems and traffic saving.
Also, due the lack of electricity in the areas, all the ac-
tivities in the workshops including wheel turning are
performed without electricity (Herami, 2011:32).
Unfortunately, while handicraft development can be a
good strategy to protect the national economy against
the adverse effects of price volatility and instability of
market of other industrial products, it seems that Iran
economic policy has not long taken advantage of this
great opportunity. Concerning the status of handicraft
in Iran economy, Malekjani (2008) argues that “of 25
economic sectors in Iran, handicraft has the place of
18, emphasizing its weak role in the economy. This
means that the economic policies in Iran, especially in
two late decades, have not been able to enhance the
status of handicraft and to utilize its positive impacts
on the national economy”. Jacob Pollock and K. A. Ab-
bot, Kent Dosserci and other figures who visited Iran in
Qajar era all reports on the severe weakening handi-
craft products such as weaving, coppersmithing, and
pottery, etc., in Iran at that particular age due to the
inefficient policies, so that Tahvildar (2009:56) gives a
detailed review concerning broke or almost forgotten
professions of clothing in Isfahan at the age of Mo-
hammad Shah due to the lack of support of domestic
industries and in turn importation of a huge volume of
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
foreign commodities and promotion of the West life-
style and culture. Underlining the impacts of some in-
efficient governmental policies such as evasion of ex-
porters from paying currency obtained from exports to
Iran Central Bank and closure of public handcraft stores
and also lack of support of small size local producers,
etc., Bakhtiari (2014) states that “until 1993, handicraft
situation under the control of the Ministry of Industries
was very good. In that period of time, only in the area
of glass blowing industry there were 220 active work-
shops that their products were exported to foreign
countries. However, due to the negative impact of the
inefficient government policies on handicraft industry,
200 active glass blowing workshops now have reduced
by almost 12. On the other hand, the government poli-
cy to impose some limitations on imports and to in-
crease custom tariffs led to a reduction in the imports
of Chinese products and thus greatly helped handicraft
producers.
6-1-1 Taxation
In Iran, to encourage investors to invest in handicraft
sector, tax exemptions are introduced as one of the
most important encouraging tools announced by the
governor general offices of most provinces. The inves-
tors who become engaged in this area are not con-
cerned about tax only when tax officials ascertain their
activity as the builders of handicraft workshops. How-
ever, most of the time, when officials have not suffi-
cient expertise to identify the originality and authentic-
ity of handicrafts, or producer is not able to ascertain
the authenticity of its productsrelevant workshop can-
not take advantage of tax exemption.This problem can
be seen especially with regard to the group of handi-
crafts that are new or modern technologies have been
used in their production or their production happens in
the factory or invery high numbers (Abadinaghsh,
2014).
2-1 Demographical and Social factor
1-2-1 Lifestyles and consumer preference
The growth of urbanism, distancing from genuine val-
ues, and immersion in a bulk of soulless and senseless
commodities have greatly impacted man’s life. In this
context, handicrafts that root from nature, culture and
history and religion of Iran can act as a way to revive
the elegant forgotten past and establish a link between
man and its lost identity. On the other hand, the uni-
verse has been increasingly encountering bio-
environmental problems and threats that affect human
race and other creatures and ecosystems (Dabiri, et al;
2007) and it is necessary more than ever to reconsider
our life style and to pay special attention to increasing
trend of environmental threats. Undoubtedly, we are
entering a new universe. However, it is not clear
whether this modern world is an arena for the fall or
decline of environment and or it is an arena for the
revival and revitalization of environment and economic
development (Brawn, 2008:243-252). Paying attention
95

to the green chain is one of the issues that has increas-
ingly developed and institutionalized. The green chains
guarantee value creation, waste reduction and intro-
duction of an ideal plan to control waste matters and
their recycling. These chains have received the atten-
tion of many small- and large scale organizations and
different fields and industries. Management of com-
plex relations and material flow in organizations and
cultures is a basis for reacting to challenges faced by a
green supply chain. This chain is the supplier of a wide
variety of advantages (Larson, 2011). Creative indus-
tries often are able to establish a good relationship
with environment, and they can bring about the indus-
trial development (UNIDO & UNESCO, 2005:
19).Handicrafts as creative or cultural industries are
qualified to receive the brand of “the green supply
chain” due to some advantages including use of natural
resources in their structures, their complete after-use
decomposition in the nature, use of hand in the major
part of their construction and finally creation of mini-
mum air pollution. This privilege provides handicraft
industry with a special competitive advantage in a situ-
ation that factories have been forced to pay a large
sum of money for pollution taxes.Enhanced level of
education in Iran and other countries increasingly has
led to the more reaction and sensitivity of people to
health domain and the relevant issues and awareness
of the damaging impacts of the pollutants. According
to researchers, the growth the green products is a
hopeful sign (Allan Dernick, 2008:94). Concerning the
poll held in Denmark in 2008, Larson (2011) writes that
82% of respondents are inclined toward implementa-
tion and planning of the green supply management
strategies. Therefore, it could be said that the populari-
ty of the applied handicrafts is not only due to its his-
torical and cultural roots, but also due to its sensitivity
to the nature and its increasing interests of the con-
sumers shown toward it (Larson, 2011).
2-2-1 Brand: a powerful commercial brand can be a
highly valuable property. A company with a popular
brand benefits from a special competitive advantage,
and it can also makes consumers loyal (Parsaeian,
2007:378). The brand determines the expectations and
views of customers toward the company (Aaker,
2007:160). One challenge raised in creative and cultur-
al industry of handicraft is the lack of a brand and ISO
standard (Dan Lin, Shiang Li, 2010). So it should be un-
derlined that having a popular brand in handicraft in-
dustry is a highly critical key to success.
3-2-1 Advertisement & popularity:
Unfortunately, despite success of the Western coun-
tries in utilizing advertisement to increase their com-
modity sale rate, Iran has not been able to advertise
sufficiently on handicraft industry, and worse than this
situation is the fact that even when a special commodi-
ty due to its high quality has attracted much customer
after a while is duplicated by either workshop itself or
duplicating workshops, and losing its initial high quality
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
yet with the same form and structure enter into the
market and makes customers so disappointed. There-
fore keeping the quality for marinating the market is an
important point that must be always taken into ac-
count. Thus the most critical thing is quality rather than
price, because customers always pursue high quality.
Mostafa (2011) considers quality as a major factor in
advertisement, and quoting from the World Trade Or-
ganization (WTO) states that a high quality handicraft
not only is reminder of good memories in the mind of a
tourist, it can motivate others to pursue such product
and even purchase it by any means. Brojeni (1999)
believes that the lack of package, small volume of pro-
duction, limited range of promotional activities and
lack of quality of some commodities are some weak-
nesses of handicrafts and the exports of such commod-
ities should be prevented and many attempts should
be made to enhance the quality.
Malekjani (1999) also underlines the lack of advertise-
ment and presents some suggestions as the govern-
mental support of the presence of handicrafts in inter-
national markets, advertisement through public media,
creation of handicraft showcases and exhibitions in
residential and tourism centers and all the centers ca-
pable of attracting visitors. Finally, UNESCO (2005) rec-
ommends some other strategies including border festi-
vals, exhibitions, cultural touring programs, paving the
way for enhancing culture and tourism. Concerning the
impact of exhibitions on how to find foreign markets,
Abadinaghsh (2014) claims that “about 15 years ago,
due to participation in different domestic and foreign
exhibitions and also the unique quality of my products,
many orders from all around the world were arrived in
my workshop (composed of 25 workers) until it led to
the opening of a permanent exhibition in Amsterdam.
These exports, up to 7 years ago, reached 2 to 3 tons,
which due to the sanctions imposed on Iran the exhibi-
tion was closed and all the products blocked”.
3-1 Political factors
The most common form of government actions for
encouraging or prohibiting each work is law (Osborn,
2005, 353). The strengthening of cultural industries
requires a unified political development. In increasingly
growing economies, the governments have invested on
doing studies and research and development of politi-
cal actions that contribute to further development of
creative and cultural industries. However, in many of
developing countries, cultural and creative industries
do not take advantage of a distinguished place within
the framework of national planning and development
strategies (UNESCO, 2007: 3).
1-3-1 Legislation in the foreign and international are-
as: this component can indirectly influences product
exports and tourism industry. As there is a highly close
association between tourism development and handi-
craft development, so the former can significantly in-
fluence the latter.
96

2-3-1- business climate policy: This policy is considered
as one of the factors affecting the business. According
to the World Bank (2014), Iran ranked 152 among 189
countries in terms of its business environment.General
characters of the business environment on the basis of
10 smaller characters include ease of starting business,
business licenses, employing workers, property regis-
tering, getting credit, protecting investors, tax, trade
globally, contract enforcement and bankruptcy and
ease of use of energy power. This ranking shows the
suitability of each country to carry out economic and
trade activities. Thus, in terms ease of use and suitabil-
ity for carrying out economic activities, Iran is on the
far end among 189 countries.
3-3-1 Commercial policies: based on the report of the
World Bank (2014), Iran has achieved the rank of 153
in terms of trade facilitation in the world, and seven
documents are required to export commodities
through the border in Iran, and ten documents are
need to import commodities. The required time for
exporting and importing is 25 and 37 days, respective-
ly. Exports cost in Iran borders for each container is
1.470 dollars and for imports is 2.100 dollars. The
above shows that while Iran has an inferior situation
than other 153 countries (most as the competitors for
Iran) in the world in terms of handicraft exports, regu-
lations and conditions in Iran for exports are better
than those of imports. Nowadays, in Iran, by injecting
financial resources higher than absorption capacity,
inflationary tendencies have been intensified. In this
context, the faced bythe surplus exchange rate, the
government uses exchange to control inflation to open
the doors to imports of foreign goods (Mehrjerdi, Re-
zaei, Arabion, 2010). Imports of goods of competitors
supplied sometimes with a lower cost and higher quali-
ty than domestic products make the area tighter for
domestic craft makers.
4-3-1- Financing, grants and facilities: a cursory look at
handicraft websites indicates that providing active
handicraft workshops in Iran provinces with grants and
low interest loans has been main concern of the gov-
ernment and many good opportunities could be found
in this area. However, artists and craftsmen’s mistrust
to the sale of the manufacturing products is the most
critical problem (Mojib, 1997:85), and the above men-
tioned motivations have not played an effective role in
the development of these industries.
5-3-1 Environmental regulations: since the majority of
the handicraft products are adaptable to the environ-
ment, bio-environmentalregulations not only do not
create problems for these industries, but also provides
them with a special competitive advantage. Whereas,
factory competitors must await the stringent national
and international regulations, because experts believe
that the most effective way to control the pollutants is
imposing tariffs on them.If officials seriously imple-
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
ment this strategy, people find motivation to avoid
environment pollution and the agencies that invest
their money and time to reduce pollution would be
highly susceptible in terms of competitiveness. If the
pollution leads to exorbitantcosts, the industries do
their best to avoid this additional cost through some
effective strategies such as innovation of a cleaner
technology, change in consumption fuel, and use of
renewable material and saving in energy consumption
(Osborn, 2005, 325-326).This means that the competi-
tors of handicraft factories must pay some money in
addition to production costs including tax and costs
related to bio-environmental consultations.
6-3-1 Taxation policies:by proving taxation facilities,
governments encourage industries to development
and facilitation (Osborn, 2005, 354). A review of the
websites of Iran Governor General Office and invest-
ment motivating factors shows that handicraft and also
a small portion of exportsare subject to tax exemption.
Therefore, lack of development of such industries de-
spite motivating actions indicates that the lack of
growth in handicrafts roots from other latent reasons.
7-3-1- Investment incentives: investment incentives
intended for investors in this sector are presented in
the information portal Article 44 of the constitution as
follows: a) The tax exemption of handicraft workshops,
b) payment of 5% of export incentives, c) social securi-
ty law of carpentry, carpet weaving and licensed hand-
icraft workers d) deductible insurance contributions of
employers and workers in small workshops for all dis-
ciplines of handicraft trade up to 5 persons, e) requir-
ing all executive agencies to mobilize appropriate loca-
tions and purchase items of handicrafts;f) the use of
handicraft products in non-cash prizes card of banks, g)
prohibit the sale of non-Iranian handicraft works within
the historical and cultural sites of the country, h) inclu-
sion of tariffs on water, electricity, gas and fuel subsi-
dies of the industry sector in the subsides targeting law
into workplace handicrafts, i) granting credit facilities
(associated auxiliaries in the annual budget law, small
economic business, boxes of MehrImam Reza (AS), the
law ofdomestic jobs organization).
4-1 Technological Factors
1-4-1 Use of technology: use of technology in the area
of handicrafts to reduce unemployment, hard physical
activity, increased production, reduction in production
costs, the reduction in the finished price of manufac-
tured product and also formulation of some standards
in some parts of handicraft productions are the highest
priorities in this context (Yavari, 2002, 22-23). In addi-
tion, to identify different needs of customers such as
aesthetical, cultural, economic, ergonomic ones and
instant recognition of opportunities and ability to fulfill
these ever-changing needs, utilization of relevant
knowledge and information is of critical significance.
Eliasi, Rokni, Taiebi (2012), quoting from Shin, state
that access to the relevant information plays a critical
97

role in the identification of opportunities, and those
with more access to information for grasping better
opportunities have more chance to accomplish their
objectives. Bakhtiari (2014) considers the factors of his
success as having a strong public relation and paying
attention to customers’ demand, visit of foreign work-
shops in different travels, a constant review of market
daily products, materials and even kiln and finally per-
forming repeated tests to manufacture the high quality
products.
2-4-1 Investment on research & development: prod-
uct development is one of the most critical factors that
must be taken into account given the marketing re-
search and targeted purchasers; otherwise the market
development from local market to other markets can-
not be accomplished. UNIDO & UNESCO (2005:20) re-
instate that to facilitate investment for development of
creative industries and an evaluation of their role in
social and economic development in a country or re-
gion, the identification of a set of creative indicators
that have potential to develop at a regional and na-
tional level is of critical importance in order to become
informed of their potentials and thus to ensue social
and economic growth. This information can be ob-
tained through the Creative Industries Atlas.A brief
look at the portal of Cultural Heritage & Handicraft
Organization in different Iran provinces shows that the
Creative Industries Atlas has now at the top of the
agenda of many of these organizations and this is so
promising for the future of handicraft in the country.
3-4-1 Financing of research & study
This sector whose one of subcategories is handicraft
plays a significant role in Cultural Heritage Organiza-
tion, and it is of particular importance in providing data
banks and launching museums for designers and inves-
tors. According to Davari&Nourimah (2001) the dyna-
mism of designing and designers in each country is of
utmost significance for achieving a sustainable devel-
opment in the area of handicraft industry, and the mu-
seums are also critical determinants in this context.
Use of other countries’ experiences can be helpful as
well. For example, in French, Casimir Technology Cen-
ter in 1958 provided small scale businesses (primarily
rural) in the region with free consultation and relevant
helpful information, associated these businesses with
service providers and laboratories and also supported
special projects. One of the strengths of this center is
the presence of technology development counselors.
Each counselor will be engaged in a special business for
a five or six month period in order to link technical and
practical skills directly (OECD, 2010: 63).
4-4-1 replacement of technology/solutions:Mojib
(1997:82-85) states that the qualitative and quantita-
tive development of handicrafts is possible by the ap-
plication technology. Also, he highlights the important
role of state organizations and general governor offices
in the handicraft development and suggests the for-
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
mation of executive expert committees consisting of
experts from various organizations in the form of hu-
man resources committees (with special educational
objective), equipment and means committee, the
Committee on Scientific and Technical Infor-
mation,committee of raw materials and motifs (for
procurement of high quality raw material and original
designs and producing designs ID), the organizing
committee of production, marketing and sales of-
fers.He believes that artists and craftsmen’s mistrust
with the shopping of productions is one of the most
obvious problems and the solution is to guarantee pur-
chasing of these products and providing financial facili-
ties through budgets auxiliaries. A review of construc-
tion methods and handicraft production workshops
indicate that the construction stages and the tools
used in some of these industries are completely primi-
tive and handmade and it is of critical importance to
introduce the modern technology into this area in or-
der to enhance the speed and quality of production
and to create change and innovation in some past pro-
duction forms and formats that are no longer worka-
ble. Also, it is necessary to preserve high status of
handicrafts and prevent use of pollutants in production
of these products.
5-4-1 Information and communication technology
(ICT): ICT has influenced all dimensions of our life. ICT
includes all forms of computer system, remote com-
munications and network. Use of this technology en-
hances man’s intellectual and social level in developing
countries and underdeveloped area. In the other
words, to enhance human potential and empower-
ment, reduction of poverty, strengthening of commu-
nications, content and local knowledge development
and also to ensure an equal access to information, ICT
is utilized. Furthermore, this technology facilitates
remote training and learning whenever or wherev-
er(Alias, 2013: 11-12). It is clear that the presence of
bandwidth with a high speed to enable rural people to
grasp opportunities is so determining, and in case help
rural households and families to play proper roles in
the strengthening of the national economy, an appro-
priate set of service should be provided at site (OECD,
2010: 44-47).
6-4-1 Technology of consumer purchase mechanisms:
Abadinaghsh (2014) regards the most effective factor
in handicrafts development as the creation of multiple
spaces and markets for sale of handicraft and also
providing people with shopping facilities and encourag-
ing people to always purchase domestic commodities
(Abdinaghsh, 2014). On the other hand, nowadays, a
variety of modern techniques have been invented for
instant and simpler purchase of required commodities
such as online purchase. This trend has been used in
Iran for a short period of time in the area of handicraft
products by intermediary purchasers, which of course
given the lack of standards and brands in handicraft
industry, correct diagnosis of a high quality and original
98

product through online websites is challenging and
almost impossible. The enhancement of packaging
quality and handicraft products transfer for supporting
handicraft consumers can be regarded as another im-
portant contribution.
7-4-1 Intellectual property: report of UN on the devel-
opment of entrepreneurships in the creative industries
sector regards intellectual property as one of the key
required interventions, because without such protec-
tion, creative entrepreneurship will be a pawn in the
hands of the pirates of artistic and literal works, traffic,
forgery and fraud and other forms of illegal acts. This
issue should include the trade marks system, collective
marks/certification, design rights, geographical indica-
tions, patents registered, traditional knowledge and
copyright (exclusive), and publication and publishing
copyright (ILO, 2011: 9).
Den Lee & Shiang Li (2010) also suggest that copyright
and patent must be licensed and inventions should be
encouraged to innovate and develop products. Inade-
quate measures in the field of intellectual property
rights reduce potential to develop and produce high
quality industrial products. In order to convert creativi-
ty intoa long-term flow, widespread public awareness
of the importance of intellectual property rights should
be guaranteed (UNIDO& UNESCO, 2005:20).
Unfortunately, this problem can significantly hurtthe
creativity in the area of handicrafts. Form one hand,
creative artist is suspicious of instant copying of its
work in the market as soon as it will be entered into
market, and has not sufficient time, money and desire
to develop and design a new product, and on the other
hand lower level artists instead of spending time and
capital on innovation and design of a new work, they
prefer to copy the product that has a good sale in the
market; and unfortunately, in most cases this copying
and forgery is done by a low quality and it hurts even
selling of original products and discourage preliminary
designer of work.Of course, workshops with a powerful
team of designing and innovation immediately present
a new higher quality original product in order to pre-
serve still their customers (Bakhtiari, 2014).
5-1 legal factors affecting the handicraft development
in five-year development plan of the Islamic Republic
of Iran (2012) include: designing, manufacturing, dis-
tribution, publishing and export of cultural goods and
services, arts, media, handicraft and cultural heritage
(Article 13-c ), financial support of launching special-
ized museums or public institutions, non-governmental
organizations and the private sector (Article 13 (c)),
financial support and encourage of networks, clusters
and production chains (Article 80-a), the expansion of
domestic business and income generation projects
private and cooperative, especially in regions with un-
employment rates above the national average unem-
ployment rate (Article 80- c), (Article 80-b), supporting
the development of rural industriesby giving priority to
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
the development of clusters (Article194- b), continuous
technical and vocational training with the aim of em-
powering villagers to provide and use new services and
participation in industrial activities and improve the
quality of production (Article 194- e), and organizing
and establishing the activities of small and medium
entrepreneurship and employment in rural areas
through the provision of credit and financial incentives
(Article 194- g)
6-1 Institutional factors
The growth of generative entrepreneurship using in-
stitutions
Bamol, Litan&Sheram (2009) have stated that one of
the economic growth factors that can bring about
higher production is creating encouragement to gener-
ative entrepreneurship. To achieve this goal, the com-
munity should pay a portion of its highest bonuses to
the most successful entrepreneurs. One of these bo-
nuses is eradication of barriers. Also, through legisla-
tion and law making, institutions should prevent non-
generative entrepreneurship. For example, institutions
can restrict illegal actions to earn the points from
competitors, prevent corruption in launching corpora-
tions, and prevent covert negotiations with great insti-
tutions equipped with government financial support,
etc. so take more effective action.
2- INTERNAL ENVIRONMENT
Industrial workshops are managed usually in the form
of households or small size enterprises, and no ministry
administers their affairs. Technical constancy and su-
perb reliance upon skilled physical power are two of
the most significant characteristic of rural handicraft
industries. However, instruments and production pro-
cedures do not remain constant in long term and main-
ly follow technical and industrial evolutions, which not
only this can further develop their field, can also sub-
sist and sustain their business trend (Yavari, 2011).
Because most of handicrafts workshops often are ac-
tive in rural areas, obstacles and limitations of entre-
preneurship in rural areas can include 1) individual and
family barriers 1 (low level of literacy, rigid attitudes,
low income), 2) socio-cultural factors (low power and
understanding of innovation), 3) economy (lack of de-
mand, lack of access to sufficient resources) and 4)
management (structure, lack of support for new inno-
vative and dynamic ideas) is (Eftekhari & SojasiGhai-
dari, 2010: 51- 54). Allison suggests the most important
strategies to strengthen local entrepreneurship include
capacity building by creating infrastructures in the are-
as of entrepreneurship, enabling the creation of self-
esteem, accelerate growth through mobilization.By
enumerating ten main elements of farmer subculture,
Rogers regards them as main obstacles to entrepre-
neurship. These elements include lack of a mutual trust
in personal relations, lack of innovation, fatalism (a
degree of understanding of its inability to control the
future), low expectations and aspirations, neglecting of
99

future benefits in favor of immediate benefits, attach-
ing less significance to time, family orientation, family
goals dependence, reliance upon the capability of
partners and lack of empathy. Notably, in case trans-
formation plans for rural areas are not based on the
identification of farmers’ values, viewpoints, opinions
and motivations would lead to failure. The executors of
rural development plans should consider demograph-
ical and cultural characteristics of people targeted in
the plans (Azkia, 2008:118-133). In addition, William
mentions several factors for further rehabilitation of
farmers, which some of include: 1) positive self-
evaluation 2) empowerment tendency, 3) self-
confidence, 4) know individual potentials, 5) motiva-
tion and enthusiasm 6) understanding personal emo-
tions and personal power and control to guide them
(FazeliBaigi &Yavari: 2009: 48).Smith believes that, by
creating social networks, financial and technical institu-
tions (entrepreneurship supporting organizations) and
the economic activity of clusters, rural entrepreneur-
ship can be developed more and more. Robert Botman
also shows that how social capital is a prerequisite for
access of small communities to economic dynamic life.
According to him, social capital has three resources
including a)social resources such as history and social
culture, b) physical (natural) resources such as human
constructions and natural environment (forest, soil,
renewable resources, etc.), c) economic resources such
as capital instrument in the construction of environ-
ment and financial capitals (Moti’eiLngeroudi et al,
2012).
In this part, we take a cursory look at manpower or the
people involved in handicraft industry and also the
type of indoor technology of this industry.
1-2Technological subcategories
According to UNIDO & UNESCO (2005:30) handicrafts
are divided into four main groups 1) fine 2) artistic 3)
applied & 4) mass production. All those who aim to
enter handicraft industry, they first must identify their
own desired category. This is because the type of
commodity, technology used, price, consumers, market
output, distribution channel and manpower of each of
the above categories are different, and these factors
can significantly affect production policy making.
2-2 Categorization of employees in the area of handi-
craft
Two main categories should be taken into account in
the categorization of personnel in the design of organi-
zation include a) the level of skill and expertise that is
associated with educational and training needs of a
certain job b) social-mental characteristics as the most
profitable pattern for design of cognitive complexity
pattern organization. Whatever manpower is more
experienced in facing various environments and differ-
ent persons, he/she takes advantage of a higher cogni-
tive complexity. In terms of mental complexity, people
are categorized into two groups including those with
©JK Welfare & Pharmascope Foundation | International Journal of Review in Life Sciences
Shojanoori et al., Int. J. Rev. Life. Sci., 5(10), 2015, 91-102
objective thinking or low cognitive complexity and
those with abstract thinking and relatively high cogni-
tive complexity. The first category requires framework,
order, constancy and adaptation to environment and
they have a closed, absolute and pattern-based think-
ing (Hellander, 2001). In the area of handicraft, we
mainly fact people with little education and training
and this play a highly effective role in formulating
structure and policy making.
DISCUSSION AND CONCLUSION
Despite the huge potential of Iran’s handicraft sector,
the state of the industry is not in an optimal position.
The different incentives in the form of provision oflow
interest facilities, tax exemptions and other govern-
mental supporting activities introduced in this sector
have not effectively led to a further development. This
is because most of the handicraft industriesbelong to
rural industries, and remoteness and isolation and low
population residing in rural areas are among the rea-
sons that make provision of infrastructure and public
services in this sector not affordable. Thus, the possi-
bledevelopment will not be provided as soon as possi-
ble and requires more time and investment. Be-
sides,difficulties of handicraft producers in a cycle of
deprivation and isolation, and lack of access to re-
sources, facilities and necessary training have hurt the
quality and dynamism of such products and have di-
minished the attraction of private sector investment in
this industry.Therefore, to enable handicraft industry
to achieve an effective economic scale, the participa-
tion of all stakeholders including government, private
institutions, government and non-profit institutions as
well as active participation of universities in the devel-
opment of rural industries, by giving priority to the
development of clusters, as well as the establishment
of centers offering handicraft business servicesshould
be at the top agenda of planners and policymakers,
due to the fact that these centers have provided access
to some advantages such as joint use of design service,
marketing, finance, research&development and the
entrance of technology (to a reasonable extent) and to
overcome the problems in this area and provide im-
proved quality and production relevance to the needs
of the consumer.On the other hand, acculturation and
widespread publicity in the popular media, and holding
ofinvestment opportunities exhibitionsin the field of
handicrafts is also considered one of the important
factors for the development of this industry.Because
this not only makes investors more informed of the
potentials of this industry, but also raise awareness of
purchasers on the advantages of this type of indus-
try.Along with all these measures, the government's
efforts to develop the tourism industry as one of the
best platforms to create jobs and strengthen the cul-
ture, and the government's determination to improve
the business climate in the country is of the utmost
significance and can effectively stimulate entrepre-
neurship and exit the industry from this downturn.
100
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