Inclusive business models integrate the poor as consumers, distributors, suppliers or employees – and can benefit from various forms of support, e.g. developing an enabling environment, value chains, or engaging individual businesses to facilitate risky investments. Some argue in favour of adapting support specifically to inclusive business. This page explores debates, current practice and advice.
At a glance: Short reads on inclusive business
- Synthesis Note: Current Debates on Inclusive Business, DCED, 2017. 4-page summary of current debates on what inclusive businesses are, whether they can effectively reach the poor and how best to support them and measure their results. Key take-aways include:
- There is broad agreement that inclusive businesses integrate the poor in their value chain, but definitions vary in how exactly inclusive businesses, benefits for the poor or ‘inclusiveness’ are defined – with possible implications for how support is designed and targeted.
- While low-income populations offer sizeable commercial opportunities, businesses often cannot rely exclusively on very poor clients or suppliers for profitability. Alternatively, they may need to engage with people who are not the poorest.
- While support to individual businesses has helped achieve direct impacts on poor people in their value chains, practitioners increasingly seek more systemic solutions, e.g. by promoting an enabling environment or helping to scale up and replicate successful models.
- Summary: How to create an enabling environment for inclusive business, DCED, 2017: Two-page summary of the DCED’s extensive review of experience and evidence in this area.
BMZ’s introductory video below explains the concept of inclusive business in 3 minutes.
- How to create an enabling environment for inclusive business? Learning from experience and debates in private sector development, DCED, 2016. This paper summarises a very large body of emerging evidence, structuring it into key debates for further exploration. It incorporates lessons from the inclusive business literature as well as other communities of practice in private sector development.
- Does business structure influence social impact? Early insights and practical implications for donor agencies, DCED and Oxfam, 2016: This Briefing Note explores why business, form, governance and ownership matter, and reviews the evidence that they can influence outcomes for the poor. It is intended to support donors in choosing what types of businesses to engaging with.
Background papers on inclusive business
- Business models for decent work, ILO 2019: This paper explores cases in Afghanistan, Zambia, Kosovo and Nigeria to draw lessons on how practitioners can support business models that bring both commercial viability and development impact.
- Inclusive Agribusiness. The state of play, GDPRD, 2016: The paper outlines the concept of inclusive business and its application to the agrifood sector; it maps the current state of play and explores implications for donors.
- Innovative Business Approaches for the Reduction of Extreme Poverty and Marginality, Heike Baumueller, 2013:This book chapter outlines the evolution of thinking around pro-poor business approaches and examines whether and how these can support the poor.
- Literature review: seminal papers on ‘Shared value’, DFID, 2013: This review identifies seminal papers on the concept of shared value and business ventures at the bottom of the pyramid.
- The Fortune at the Bottom of the Pyramid, C K Prahalad, 5th edition, 2009: In this book, C K Prahalad, who ‘invented’ the Bottom of the Pyramid concept, makes the case for the entrepreneurial opportunities being found among the billions of poor people.
Building inclusive business models: business and development perspectives
- Corporate Impact Venturing at the Base of the Pyramid, Endeva, 2019: Explores when it’s best to buy inclusive business externally – through Corporate Impact Venturing (CIV) – and when to build inclusive business models within existing business.
- Reaching deep in low-income markets Enterprises achieving impact, sustainability, and scale at the base of the pyramid, Deloitte, 2017: This review of 20 case study assesses the success factors of inclusive business models, and whether or how they have been able to reach low-income and BoP populations.
- Uncharted Waters: Blending Value and Values for Social Impact through the SDGs, Business Call to Action, 2016. This paper gives an overview of how inclusive businesses can accelerate both business growth and social impact.
- Growth for Good or Good for Growth? How Sustainable and Inclusive Activities are Changing Business and Why Companies Aren’t Changing Enough, Citi Foundation et al., 2014: This report studies corporate incentives and disincentives for inclusive business models through primary research of over 40 companies.
- Why Business Models Matter, Michael Kubzansky, in: Chandy, Laurence et. al., 2013, Getting to Scale: How to bring Development Solutions to Millions of Poor People: This article explores the importance of getting the business model right when it comes to designing solutions that are able to reach scale.
From inclusive business to inclusive markets
- Shaping Inclusive Markets. How Funders and Intermediaries can Help Markets Move toward Greater Economic Inclusion, FSG, 2017. This report reviews seven historical cases of successful and systemic inclusive market development to draw lessons on how similar progress may be achieved in other markets.
Grow-Scale-Impact. How to help inclusive business reach scale, GIZ, 2016: This handbook aims to provide private sector development programmes with a practical handbook on how to support the scaling up and replication of inclusive businesses.
- Multiplying impact: Supporting the replication of inclusive business models, BMZ, 2014: This report provides guidance on how best to support the replication of inclusive business models based on three challenges they face: the lack of knowledge; the difficulty in finding partners to execute replication plans; and the absence of tailored financing instruments.
- Business and International Development: Is Systemic Change Part of the Business Approach?, IDS, 2014: This empirical study explores whether and how pro-poor business approaches can drive shifts in broader market systems. It finds that initiatives focused on the value chain of a single company failed to achieve systemic impacts.
- Beyond the Pioneer: Getting Inclusive Industries to Scale, Monitor Inclusive Markets, 2014: This report studies market-based solutions to poverty reduction, focusing on barriers they face to scaling up, as well as factors that enabled successful examples to reach scale.
Different types of support to inclusive business
- What small and growing businesses need to scale up: the case for effective technical assistance, Argidius Foundation, March 2018. This report describes how donors and other actors can collectively build and support a stronger ecosystem through technical assistance for small businesses to scale their profits and impact successfully.
- G20 Inclusive Business Activity Update, IBAN, 2018: This report compiles 47 inclusive business initiatives currently supported by G20 member states and summarises key lessons arising from them.
- More than money: Mapping the landscape of advisory support to inclusive business, USAID, 2017: This report takes stock of the landscape of advisory support for inclusive businesses, highlighting trends and lessons learnt to date. It is based on a review of relevant literature and 65 initiatives, plus interviews with 21 advisory support providers.
- Inclusive Business Toolbox. Promoting Inclusive Business Models in Development Cooperation Programs, GIZ, 2015: This toolbox aims to provide planning officers, project leaders and staff involved in PSD and other development programmes with a set of tools that can be used to integrate Inclusive Business into programming.
Partnerships (grants/ technical advice to inclusive businesses)
- NGO and company partnerships for inclusive business, Endeva, 2019: Guide on how NGOs and companies can conduct more productive IB partnerships as equal partners
- Public-Private Partnerships in global value chains. Can they actually benefit the poor?, Duke University for USAID, 2015: This report examines partnerships in three global value chains – cocoa in India, coffee in Rwanda and horticulture in Kenya – which had varying degrees of success in reaching the poor.
- Adding Value to Innovation. Lessons from Donor Support to inclusive business from the Business Innovation Facility Pilot, Business Innovation Facility, 2014: This report summarises key lessons learnt from a facility that provided technical advice to inclusive businesses.
Value chain/ market development
- Growing together – strengthening micro-enterprises in value chains, CARE International, 2016. This paper is addressed primarily at large companies, and aims to fill a gap in the availability of guidelines that assess business objectives in micro-enterprise development.
- Smallholder engagement with the private sector, EPS PEAKS Topic Guide, 2014: This Guide looks at smallholders’ degree of engagement as well as the possibilities to link them to formal firms in ways that may improve access to capital, inputs, know-how and markets.
Business Environment Reform
- Advancing Enabling Policy Environments for Inclusive Businesses in ASEAN, 2019. Defines IB, reviews policy advances in the ASEAN region, and maps the road ahead to promote IB in ASEAN.
- Enabling the Business of Agriculture 2017, World Bank Group. Enabling the Business of Agriculture 2017 is the third report in the series. The data can be used by governments, investors, donor programmes and others to assess countries’ performance and to identify regulatory good practices that can contribute to inclusive agricultural development.
- How to create an enabling environment for inclusive business? Learning from experience and debates in private sector development, DCED, 2016: This scoping paper summarises a large body of emerging evidence, structuring it into key debates for further exploration. It incorporates lessons from the inclusive business literature as well as other communities of practice in private sector development.
- Realising Africa’s Wealth. Building Inclusive Business for Shared Prosperity, UNDP AFIM, 2013: This report describes the status of inclusive business in sub-Saharan Africa and the ecosystems, including government policies, underlying the enterprises and entrepreneurs driving such approaches.
Social enterprise support
- Why and how are donors supporting social enterprises?, ODI, 2014: The report attempts to provide a preliminary stock-take of donor activities in the area of social enterprise.
- Mixing business and social. What is a social enterprise and how can we recognise one?, ODI 2013: This Working Paper argues in favour of a narrow definition of social enterprise, combining an enterprise’s social intent and robust financial viability thresholds.
- Social Impact Investment 2019. The Impact Imperative for Sustainable Development, OECD, 2019.
- Impact investing: Measurement valued by investee businesses, DCED, 2017. This study examines the data being generated by impact investee organisations. Little is known about the forms of impact data generated and valued by these enterprises, this study looks at why they are generating it and how they are using it.
- Impact Investing: who are we serving? A case of mismatch between supply and demand. Oxfam, April 2017.
Case studies on inclusive business models
- Inclusive business practices in Africa’s extractive industries, ILO, 2016. This policy note presents key factors contributing to inclusive extractive industries. Each of these factors is explained with reference to examples and lessons learned from African countries.
- Smallholder farmers and business. 15 pioneering collaborations for improved productivity and sustainability, Hystra, 2015: This study looks at how pioneering companies and organisations have succeeded in enrolling smallholder farmers in productivity-enhancing schemes, sustainably and at scale.
- Sustaining and Scaling the Impact of Enterprise Development Programmes: SABMiller’s Approach to Strengthening Business Ecosystems, Harvard Kennedy School (2014): This report documents SABMiller’s approach to create more sustainable impact at scale through their enterprise development programmes, with case studies on Columbia and South Africa.
- Leaping and Learning: 31 case studies on linking smallholders to markets, ODI, 2013: This documents offers short profiles of 31 business models that link smallholders to markets.
- Promise and Progress. Market-Based Solutions to Poverty in Africa, by Michael Kubzansky et al., 2011: Based on a sample of 439 market-based initiatives in Africa, this study identifies the business models that have achieved large-scale development impacts.
Other useful links
- The Inclusive Business Action Network (IBAN) – iBAN blue: iBAN is a global initiative supporting the scaling and replication of inclusive business models. iBAN blue is an online knowledge platform on inclusive business. iBAN weave is a focused Capacity Development Programme for selected companies and policymakers in developing and emerging countries.