Inclusive Business: An Opportunity Where Everybody Wins!

Mar 5, 2014

Businesses nowadays seek ways of becoming more active, innovative, and responsive to changes, and big potential for entrepreneurial development lies where it is not usually searched- among low income, vulnerable or marginalised layers of population. This led to the emergence of the ‘Inclusive Business’ concept, which is getting a lot of attention from companies nowadays.

Inclusive business models represent a unique way of doing business, where all involved parties benefit. For companies, inclusive business models are opportunities for expansion and competitive advantage. For development agencies and governments, inclusive businesses embody an effective approach to achieving growth and development. And finally for population, inclusive business models serve as a source of better life, social inclusion, employment and sustainable livelihoods.

In essence, the term 'Inclusive Business', which was first invented by World Business Council for Sustainable Development, stands for ventures aimed at reducing poverty in commercially profitable ways. Thus the difference from non-profit organizations lies in the fact that that in case of inclusive businesses, there actually are profits. In this way, inclusive businesses go beyond simple philanthropy and create sustainable solutions to social problems, make goods and services more accessible, help to fight poverty, improve livelihoods, provide opportunities to people with low income, and in the same time retain commercial benefits.

Studying the concept of 'Inclusive Businesses' brings up the question as to what are the ways to make a business inclusive? This might perhaps be answered by stating that most often it is done through including vulnerable population into their value chains. By doing so, low income population receive a chance to become a part of inclusive business- oriented company, for example as employees, suppliers, distributors, retailers or service providers. Alternatively there is another way of ‘going inclusive’ without including targeted population in the value chain: by creating value directly to those who are in need. For instance, companies can direct activities towards enabling access to basic services like electricity, or by producing affordable products for low income population that meet such essentials as water, sanitation, housing and health care.

There are many examples of successful inclusive business initiatives around the world. For instance, the famous health and beauty corporation L’Oréal created a model named “Solidarity Sourcing” which is implemented through their supply chain. As a result, 15,000 individuals including small and mid-sized businesses and minority-owned companies benefited from this programme in 2012. Employment and learning opportunities have been opened for the disadvantaged, students and young men and women seeking to acquire valuable skills and professions.

With the help of 'Business Forum of Uzbekistan' project, successful inclusive business models are also emerging in Uzbekistan. The Milk Collection Centre in Namangan purchases milk from small-scale farmers at market prices, and by this guarantees sustainable livelihoods to local population who keep livestock. In Yangiyul area the waste management system was implemented through a public-private partnership, which helps to address the problems of pollution caused by region growth. People living in Khorezm area also benefit from socially inclusive initiative: a local factory has taught young vulnerable women, including those with disabilities, handicraft skills, and subsequently provided them with employment.

As can be seen, Inclusive Business Models hold mutual benefits for all involved parties, and embody a powerful, win-win approach to socio-economic development. Such synergy between public and private sectors and population, leads to a range of viable returns for companies, like innovations, competitive advantage, better reputation, secure market share and many others. Successful socially inclusive business models result in simultaneously bringing big benefits for public and opening new striking growth opportunities for entrepreneurs and companies.

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