Inclusive business, as a requirement for inclusive market development, presents a promising strategy to bring the benefits of economic growth directly to low-income people, by including them within value chains. This new ‘kid’ on the block; the concept of Inclusive Business, is gaining momentum, especially in developing societies. More efforts are being made to innovate, collate data and gather a systemic knowledge base, learn and publicize existing and successful inclusive business models. It has become clear to business owners, CEOs and aspiring entrepreneurs that in order to scale businesses, inclusion is key.
Despite the growing importance of inclusion, considerable innovation and entrepreneurial drive in building inclusive businesses in Africa, the business environment is still limited by struggles to reach a larger scale. Some of the businesses that have integrated the poor into their value chains are faced with a number of challenges ranging from lack of infrastructure to low levels of knowledge and skills, to limited access to finance for low-income consumers and producers.
Inclusive businesses therefore need to establish a strong bottom-line and sustainable growth by engaging in partnerships for inclusion, harmonising the excluded and ushering them into the marketplace with supporting ecosystems that provide appropriate data, access to fund and an action plan.
Navigating these Barriers
The first step is to prioritize the challenges and work them out from there. In prioritizing these issues, the following may be implemented:
Build confidence to innovate: Innovation is the soul of any business. Businesses should be aware of megatrends in the market place and think of new and creative ways they can use this to their advantage. Moreover, benefiting from innovation requires a focus on core business competencies and strengths.
Foster partnerships: This cannot be overemphasized, partnerships are needed for any inclusive venture. Some people think that companies must have large reserves of cash in order to operate inclusive business models or that it is all about investing with low profit in view however, with partnerships, doing an inclusive business gets easier. Public Private Partnerships is usually a productive move towards inclusive business furthermore, partnerships with civil societies and expert/ bigger organisations can help in achieving desired success rates.
Aside partnering with bigger/experienced organisations is the need to learn from them. Small companies should endeavor to learn from the bigger ones that have succeeded in implementing the Base of the Pyramid (BoP) – Inclusive Business model, in their value chains such as Nestle, Coca cola, Unilever, Promasidor and a host of other multinationals. They can also work with these large companies to build their knowledge base. More so, companies can collaborate with organizations with existing networks, which can act as intermediaries, to get to scale more quickly.
Incentives: On the part of the government is ensuring conducive business environment for the performance of inclusive businesses. The surest way to get people to behave in desirable ways is to reward them for doing so (Foundation for Economic Education). Business owners need to be provided with the impetus to engage with low-income communities by rewarding positive externalities and reducing the cost and bottlenecks of doing business. In addition, providing implementation support for logistics, transaction, marketing and communication, micro-business support services, and infrastructure will enable inclusive businesses to function in a variety of dynamic environments.
Non-Governmental Organisations (NGOs) and the civil society should support by advocating for inclusive business initiatives; even as they can also be involved as partners.
Resource organizations can challenge companies to look for opportunities across their business and provide access to goods and services fostering economic growth. This can be achieved by mobilizing stakeholders to share knowledge and find a common focus to develop cross-country solutions.
Closing the curtain, research shows that more public-private collaboration and coordination efforts is required to bring together the different ecosystem actors. The corporate giants as well as the one-man businesses and MSMEs need sustenance through information and other resources as well as an investment cum action plan in place. For businesses to grow, supportive ecosystems should be established to contribute to the development of more inclusive and sustainable businesses with greater impact.
This way, the power of each distinct influence is multiplied when the others are in place.
Business Call to Action (2010); Overcoming the Barriers to Inclusive Business Growth: International Business Leaders Forum
WEF (2016); The Global Information Technology Report 2016: Innovating in the Digital Economy: World Economic Forum
World Bank Group (2016); Doing Business 2017: Equal Opportunity for all