FAIR ISLE, United Kingdom — On the most remote inhabited island in Britain, 24 miles south of the Shetland mainland, 27 miles north of the Orkney Islands and 250 miles west of Norway, it's always sweater season. With 600-foot cliffs overlooking the North Sea, thousands of acres of peat bog and a climate that's perennially cool and damp, Fair Isle is a rugged place where wool is a way of life.

For centuries, the island’s resourceful inhabitants have been turning local fleeces into one-of-a-kind, handmade knitwear with distinctive, multi-coloured patterns arranged in horizontal rows. Sturdy as well as attractive, the jumpers were bartered with sailors on passing ships and spread along the trade routes of the British Empire. In the 1920s, the Duke of Windsor, briefly known as Edward VIII and famous for his eccentric sense of style, popularised the design and the jumpers are now known the world over as Fair Isles.

It's remarkable to think that this tiny island of 70 inhabitants has a world famous brand name. But because neither the pattern, nor the name are trademarked, "Fair Isle" sweaters, cardigans, hats and scarves with variations on the traditional motifs are mass-produced in factories as far afield as China and sold in varying levels of quality by global brands like Gap, J. Crew, Marc by Marc Jacobs and Ralph Lauren, while the people on Fair Isle have struggled to capitalise on the iconic pattern and its local provenance.

Today, true Fair Isle jumpers are still handspun and handknit by traditional knitters who live on the island. They take over 100 hours to make and can command upwards of £600. But you have to travel to Fair Isle to get one. Indeed, no shop anywhere in the world sells authentic Fair Isle jumpers — which are labeled "Made in Fair Isle" — because production levels are so low.

While many of the islanders can knit, only three currently handknit Fair Isle patterns commercially, while another four use hand-frame machines, for a combined output of less than 75 jumpers per year. "The demand for genuine Fair Isle knitwear today still completely outstrips availability," said local knitter Kathy Coull.

In a place as idyllic and isolated as Fair Isle, it’s not surprising that change is viewed with skepticism. But some of the islanders see a missed opportunity.

“There is an increased awareness of the unique designs and heritage. The knitwear remains world renowned; and the resurgence of interest in hand spinning and hand knitting as creative pastimes has attracted more people to the island to engage in these indigenous crafts,” observed Ms. Coull.

But while a local cooperative called Fair Isle Crafts promotes the practice of hand-frame knitting using rudimentary "machines," the primary obstacle to a healthy commercial enterprise remains volume. Indeed, the Fair Isle Crafts webpage currently notes: "Our order book for custom-made garments is currently closed until further notice. Please check here on our website for details of additional stock garments that may be made available from time to time, particularly at the end of the season."

For the knitting community on Fair Isle, the question is how to increase production, while maintaining quality and provenance. “We should do a feasibility study into new production processes,” says Ms. Coull. “Increase the production level by using an industrial knitting machine — on the isle, with home grown wool — for machine-knit, hand-finished garments, while keeping handspun and handknit goods at the top end of an exclusive market.”

Fair Isle is a small place and exploiting opportunities for the sustainable development of authentic Fair Isle knitwear will require investment. But perhaps the timing is right. In today’s post-recessionary economy, many affluent consumers are rethinking the value equation and increasingly seek out products they perceive to be timeless. Classic design, quality and authenticity matter. At the same time, increasingly informed and selective shoppers are asking more and more questions about where and how their products are made. They want to know that the whole life of their product was thought about and guided by the same care and attention as the finished piece.

But identifying the opportunity is not the same as operationalising it. Developing a sustainable commercial venture, while preserving the fragile island ecosystem and negotiating the quirks of local politics is no easy task. Still, Kathy Coull is optimistic: “Things ‘not being easy’ has not daunted Fair Isle in the past!”

Vikram Alexei Kansara is Managing Editor of The Business of Fashion