Thursday, 3 May 2012

When is business ‘inclusive’?

By Elise Wach (guest blogger, IDS Impact and Learning Team consultant) 

This has been a question that has been nagging at me for quite some time.

We have initiatives such as Vodafone’s M-PESA (supported by DFID) which seem to be unquestionably inclusive – M-PESA has enabled more than 18.5 million people to access money transfer and banking services and continues to be a profitable business model for Vodafone (i.e. it is a win-win for development and for the business).

But then we have other business models which, for me, are not quite as straightforward. Coca-Cola’s new distribution scheme that is meant to ‘empower’ women, for example, never really resonated with me as inclusive. Does it really empower women? What were those women doing before? They’re still selling carbonated sugary drinks, right? What if Marlboro distributed its cigarettes through women? Would that still be inclusive?

These types of questions are what led to this paper, which I wrote as my MA dissertation last year. It was quite a cathartic process to delve into the questions of ‘what is inclusive?’, ‘how can you tell?’ and ‘why does it matter?’

You’ll have to read the paper to find out all the details, but I’ll share one of my key findings here: a number of studies and reports have been done to prove the impact of inclusive businesses. I couldn’t analyse all of these, but I picked a few of the major ones (i.e. the INSEAD Poverty Footprint, the Oxfam Poverty Footprint, the WBCSD Measuring Impact Framework, and the BCtA Results Reporting Framework (pdf), to name a few) and found that none of them really unpacked the assumptions around why a certain business model was inclusive, and none of them actually succeeded in measuring the impact of an inclusive business.

Why does this matter?
  1. There’s a lot of potential for inclusive business to contribute to development goals. Again, look at M-PESA. When was the last time a development initiative reached 18.5 million people with just some start-up support?
  2. There’s a lot of enthusiasm for inclusive business initiatives in both the development community and the private sector. DFID, UNDP, and USAID are all supporting inclusive business initiatives. Businesses are definitely catching on to the idea that there's a ‘fortune at the bottom of the pyramid’.
With all this potential and all this enthusiasm, we need to be sure we know what we’re supporting and promoting. We need to have accurate information that enables us to identify and respond to opportunities as well as problems.

So I hope that some of the concepts discussed in this paper are taken into account as we seek to harness the potential of the private sector to contribute positively to development outcomes, and as we identify and promote inclusive business models (such as in the upcoming World Business and Development Awards at Rio+20).