Inclusive business - An update from the WBCSD

“Meeting basic needs and respecting human rights” has been identified as one of nine key priority areas within the Action2020 platform of the World Business Council for Sustainable Development (WBCSD). In this context, the role of inclusive business models as sustainable solutions which contribute to achieving the aforementioned priority has been endorsed by our member companies and partners.

Published: Tue, May 6, 2014
Author: Filippo Veglio
Type: Insight

Building on our long-standing work on the topic of inclusive business, here at the Council we are keen to be a catalyst for scaling up action, awareness, and skills in this space. As part of a wider re-organization of the Council, we have now embedded the theme of inclusive business in the newly created Social Impact cluster.

Find below some updates on what we have been up to over the past few months, alongside some blurbs and links referring to some interesting activities and outputs produced by colleagues in other organizations active in this space.

What have we been up to? Updates from the WBCSD

For starters, we are excited to co-organize the Inclusive Business eLab – please sign up! It is a 6-week online course supporting company managers working on building sustainable business ventures targeting the base of the economic pyramid (BoP) in emerging markets. The course, which kicks off at the end of May, is based on a collaboration between the WBCSD, the European BoP Learning Labs, and Business Fights Poverty.

We would also like to inform you that our recent issue brief, titled Scaling up Inclusive Business – Solutions to overcome internal barriers, is now also available in Spanish, thanks to the work done by BCSD Argentina (CEADS), a long-standing partner of the WBCSD’s Global Network.

Lastly, in late February, I participated in a series of meetings at the Asian Development Bank (ADB) headquarters in Manila, in connection with the Bank’s Inclusive Business Initiative. The focus of the discussions was placed around the launch of a US$ 3.6 million technical assistance facility to support companies keen to develop these inclusive business solutions in the region. You can read a summary via this post. We are supporting the organization of a series of workshops backed by local working groups (most notably in Japan, the Republic of Korea, and the People’s Republic of China) to engage company representatives and familiarize them with the concept of inclusive business and its relevance in today’s economy; showcase examples of inclusive business investments by Asian companies; identify and discuss common challenges and barriers faced, as well as solutions to overcome them; and provide insights into social impact measurement (business case, challenges, tools).

What have we been reading? Sharing some links to interesting materials

Beyond the pioneer: Getting inclusive industries to scale
Why do barriers to scaling up inclusive business exist? Why do firms not tend to resolve them on their own? And how were these problems solved in successful cases of scaling in a range of sectors including financial services, energy, agribusiness and healthcare? A recent report by Monitor Inclusive Markets, a unit of Monitor Deloitte.

It's time for inclusive business to move beyond pilots
Next Billion, February 19, 2014 – Fernando Casado Cañeque, director of the Centre of Partnerships for Development, argues that we've shown that the concept can work - now it's time to increase the impact. “The tendency for those of us who believe in and promote the potential of inclusive economic models must be to increase the level of impact and transform the way companies operate, so that together they transform the society in which we live. Therefore, the phase of pilot projects has come to an end. We have shown that some work; now it is time to show that through them we can create a fairer and less destructive world.”

Overcoming the last mile challenge: Distributing value to billions
Forbes, February 17, 2014 – Nicolas Chevrollier of the BoP Innovation Center and Stéphanie Schmidt of Ashoka write about how some social entrepreneurs are providing innovative solutions to make what is commonly known as the “last mile distribution challenge” a first opportunity. Some of these alternative distribution schemes include: leveraging existing retail channels; creating hybrid partnerships; and tapping into village entrepreneur forces.

Why entrepreneurs will beat multinationals to the bottom of the pyramid
Harvard Business Review blog, April 2014 – Paul Polak and Mal Warwick are the co-authors of the book, "The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers". According to them, “there is scant evidence that multinational corporations have expanded any further into the bottom-billions market. We believe they’re unlikely to do so, and that entrepreneurs working solo or in teams are far better positioned to go serve these customers. The reason is that multinationals face the constant temptation to apply their substantial resources to extend the reach of their existing businesses, rather than starting from scratch. Entrepreneurs, by contrast, start from scratch almost by definition. (…) That approach is essential to successfully serving the bottom of the pyramid.”

The dark side of reverse innovation
March 5, 2014 – Stuart Hart, who coauthored "The Fortune at the Bottom of the Pyramid" with C.K. Prahalad, writes in his blog about the potential dark side of reverse innovation: “The risk that corporations gradually come to view the world's slums and rural villages primarily as laboratories for incubating innovations for the rich.  The poor, in other words, come to be seen more as guinea pigs than as underserved people and communities with special needs and requirements--a place for corporations to force cost constraints on their innovation process enabling even higher returns in the eventual (ultimate) market at the top of the pyramid.”

Stay tuned for new updates via this blog in the coming weeks! In the meantime, keep in touch via Twitter.