Inclusive business is a newly emerging concept that refers to purpose-driven businesses that aspire to achieve societal impact or to create “shared value” (Porter and Kramer 2011). Only recently has the concept been introduced in development and business literature [cf. Van Tulder and Da Rosa (2011) for a literature review and Halme et al. (2012) and Hahn (2012) for early adoptions of the concept]. “Inclusiveness” can be understood narrowly as referring to societal impact and inclusion, or more broadly as comprising both societal and environmental considerations. Inclusive businesses are thus businesses that not only generate financial returns to their shareholders, but also explicitly include societal and environmental considerations in their core operations.
The importance of inclusive businesses for achieving sustainable and inclusive development is receiving attention at national, regional, and international policy fora ( undp 2013; Mignano and Ishikawa 2014). Among policymakers, business-based approaches to poverty alleviation are appealing for their capacity to sustainably finance themselves and achieve scale. Among businesses, inclusive approaches represent an opportunity to give a “humane face” to their operations by allowing them to generate financial returns while simultaneously addressing societal issues that adversely affect the community in which they operate. Inclusive business strategies have the potential to seize new opportunities in yet unchartered markets (Prahalad 2004). The convergence of financial, strategic and societal considerations are thus presented as a win-win scenario for companies and societies – although the increasing attention it is receiving perhaps stems from a number of concurrent societal issues, including widespread and rising income inequalities and the recent financial crisis that adversely affected the legitimacy of business. The emergence of the “inclusive business” concept also reflects the increasing demand for sustainable business practices that address concerns of environmental sustainability and resource efficiency.
Academic discourse on the multi-faceted relationship between business and society is extensive and with a long history (Clarkson 1995). Several conceptual and theoretical approaches have been introduced to understand the
Two specialised streams of literature can claim the legacy of studying the conceptual predecessors of what we call here “purpose-driven” or “inclusive” businesses. The social entrepreneurship literature is a relatively distinct domain that analyses entrepreneurship that gives primacy to social over business ambitions (Mair and Marti 2009; Mair et al. 2012). The common thread in this literature is the aim to understand how entrepreneurs create societal value by providing solutions to social problems, focusing on themes such as motives, processes, and challenges (Dacin et al. 2010). Understanding the likes of the Grameen Bank of Bangladesh, whose model spawned a microfinance revolution around the world, has been the main concern of the social entrepreneurship literature.
More recently, the fields of international business and strategy have started to take interest in societal issues such as poverty and sustainability. More classical approaches in this domain focused on the role of foreign direct investment on sustainable development in general, for instance through technology transfer and spillover effects (cf. Dunning and Fortanier 2007). Only a few studies have devoted systematic empirical attention to the level of the firm (Fortanier and Kolk 2007 Fortanier 2008). Corporate interest on the subject was initiated through case-based arguments, in particular following the publication of books such as Fortune at the Bottom of the Pyramid (Prahalad 2004) and Capitalism at the Crossroads (Hart 2005). These books have received a fair deal of criticism for “commercialising” and “romanticising” poverty (Karnani 2009; Munir et al. 2010). But they are also recognised for reshaping the discourse on poverty by challenging multinationals to consider developing economies as potential
As such, “inclusive business” can be seen as the convergence of the Bottom of the Pyramid (BoP) and social entrepreneurship values and practices within mainstream business. This convergence, and the increasing attention given to inclusive business in national and international policy fora, also highlights the rising “developmental” imperative attributed to the private sector. The aim is not only to positively impact the communities in which the business operates, but also to create a virtuous cycle that boosts business productivity and performance through these interventions.
Inclusive Businesses in Africa
The image of Africa as the continent bypassed by globalisation is already changing rapidly, giving way to the “Africa rising” narrative that highlights promising trends of economic transformations. In the decade since 2000, economic growth in the African region was second only to East Asia, averaging 5.1% per annum (Mckinsey and Company 2012). Africa has become an important destination of foreign investment, creating tens of millions of jobs, allowing millions of African consumers to join the middle-class consumer group ( ey 2015). In spite of this progress, manifold structural challenges constrain African economies from reaching their full potential, including poor economic governance, inadequate infrastructure, underdeveloped financial services, low levels of literacy and, in many cases, fragile political institutions ( giz 2013). As much as two thirds of Africans of working age are estimated to lack stable employment opportunities, showing that by far the majority of Africans still live in abject poverty (McKinsey and Company 2012). Companies that invest in the continent often come to realise that they need to address issues of inclusiveness, either as threat or as opportunity. A systematic research on the strategies that Dutch companies employ in Africa to gain a sustainable competitive advantage found that more than two thirds of these companies search for ways to achieve greater inclusiveness (Lem et al. 2013).
Insofar as inclusive businesses thrive by translating social needs into (marketable) business ventures (Mair and Marti 2009), Africa’s extensive socio-economic issues and the institutional voids (Khanna et al. 2005) provide
There is indeed evidence that inclusive and socially-oriented businesses are playing a crucial role in Africa’s development, as highlighted by a number of emerging examples from the continent. Ignitia, a young business in Lagos, uses advanced weather forecast models to provide affordable, sms-based daily weather forecasts for tens of thousands subsistent farmers. Safaricom, Kenya’s largest telecom operator, is best-known for its M-Pesa service, which is an sms-based platform for transferring, saving and borrowing money using basic mobile phone devices. In less than a decade, M-Pesa has managed to reach more than 20 million Kenyans, extending financial services to millions of otherwise financially excluded individuals. Sole Rebels is a business from Ethiopia that specialises in eco-friendly, hand-crafted shoes made from locally-available materials using traditional artisanship and empowered women. It aspires to be “the new Nike of Africa”, and already sells its products in over 30 countries through online channels, while also distributing through more than ten retail shops in cities as diverse as Athens, Barcelona, and Taipei.
These examples illustrate the power of “inclusive” business models for transforming lives and connecting Africa to global markets. They also indicate how the challenges of doing business in Africa can be surmounted by leveraging new and innovative, technology-driven business models.
But what are the kinds of approaches or strategies that are used by inclusive businesses in Africa? And what societal issues are given greater attention? What kinds of challenges do these businesses face? Little is currently known regarding the strategies, priorities, and challenges challenges of African entrepreneurs in the domain of inclusive business. The purpose of this study is to provide exploratory evidence on inclusive business practices in the continent. Using a survey tool designed for this purpose, we collected responses from 75 organisations operating in six East-African countries, namely: Ethiopia, Mozambique, Rwanda, Kenya, Tanzania, and Uganda. The survey covered, in particular, organisations from The Netherlands that were active in addressing social issues in these African countries as part of their core business strategies. This chapter presents the main findings from this survey.
The rest of the chapter is organised as follows: the second section describes the methods of data collection and analysis. Subsequently, we present the
Data and Method
In the second half of 2015, an open-ended questionnaire was distributed among a large number of organisations operating in Africa. 1 The purpose of the data collection was to gain insight on how organisations understand and approach the multi-faceted issue of “inclusiveness”. The questionnaire was exploratory in nature, and was developed using insights from literature reviews in the fields of international business in Bottom of the Pyramid (BoP) markets and social entrepreneurship.
Efforts were made to include “frontrunner” organisations that explicitly mention societal impact as their strategic orientation. The survey also covered organisations that did not define themselves as “inclusive”, but nevertheless indicated “contributing to society” as one of their objectives. By covering a diverse set of organisations, we hoped to get a relatively diverse and representative response, thus supporting the exploratory aims of this study.
Data collection was conducted between June and October 2015 in organisations that were active in six East-African countries: Ethiopia, Mozambique, Rwanda, Kenya, Tanzania, and Uganda. We also covered 13 organisations from the Netherlands that were active in these and other African countries. All responses from the Netherlands were received by email. Research assistants personally filled in the survey in each of the African countries. The data collection elicited responses from 75 organisations. The respondents come from a wide range of industries and from the non-profit sector (Table 4.1). The majority
While useful as a benchmark, this definition is, in some ways, more specific than other alternative definitions since, for example, it includes sme development among inclusiveness strategies. The survey, therefore, also included other general questions that recognise the diverse approaches organisations could adopt for becoming inclusive.According to undp, inclusive businesses are businesses that include poor people on the demand side as clients and customers, and on the supply side as employees, producers and business owners at various points in the value chain. Inclusive businesses also work actively to benefit other socially and economically disadvantaged groups such as women, ethnic and religious minorities and handicapped people.
Inclusiveness Strategies and Approaches
The strategies that could be used by businesses to engage their communities are diverse and multifaceted. Since not all approaches are equal in their capacity to achieve impact, studies have sought to understand major approaches for inclusiveness. Munir et al. (2010) identifies four typologies with increasing levels of knowledge transfer potential: market-driven, distribution-driven, production-driven, and knowledge-driven. Compared to market driven approaches in which the producer targets the BoP simply as target buyers, production and knowledge driven approaches directly engage the BoP as co-producers and thus have greater potential to achieve impact.
Jenkins et al. (2010) outline five thematic areas in which inclusive businesses can achieve impact: extending reach through distribution networks, facilitating financial access for suppliers and consumers, increasing demand by changing mindsets, designing relevant products and services, and developing the right pricing and payments policies. While these typologies are more
Nelson et al. (2013) pinpoint the following four general approaches in which businesses can contribute to inclusive development:
- • Inclusive core business whereby businesses directly impact upon society through their core operations; for example, through the goods and services they produce, the employees they hire, or by developing their value chain members such as suppliers and distributors.
- • Hybrid models that combine social and commercial capital and/or public and private resources.
- • Corporate social investment and strategic philanthropy including strengthening of public services, civil society organisations and communities, and investments on key social services such as health and nutrition, education and skills, infrastructure, including by indirect means through sharing know-how and technology.
- • Public policy engagement and advocacy including strengthening institutional capacity through investments on the development of governance, ethical, social, and environmental standards.
The first two of these four typologies appear to be more sustainable the rest considering their potential capacity to create societal and shareholder value simultaneously. This classification also recognises that not all societal issues can be integrated with core business operations, necessitating diverse approaches that include strategic philanthropy, social investment and public policy engagement.
Van Tulder and Da Rosa (2011) defined four general requirements for inclusive business strategies that need to be addressed in order to establish a link with inclusive growth: (1) Mission: an active and identifiable approach (or narrative) towards poverty and income inequality; (2) Impact: accountability beyond the direct effects of the business model (including indirect effects and unintended consequences); (3) Inclusive business cases: a clear link to the core activities and competencies of the corporation (both in production and sales); (4) Stakeholder involvement: pro-active partnerships with ngos and government in a firm’s portfolio of primary and secondary stakeholders.
Given the diverse ways in which the concept of inclusive business is defined, understood, and operationalised, one of the goals of our research was to understand how organisations approached the concept. The survey, therefore, included the following two related questions: “What does inclusive business mean to your organisation?” and “What are the approaches or strategies your organisation uses to becoming inclusive?” As indicated earlier, we asked these
The responses to these questions showed that organisations nevertheless define and frame inclusiveness in many different ways. The following summaries highlight some of the most commonly cited ways in which organisations frame the subject of inclusive business:
- • Inclusive business means maximising triple bottom-line goals of serving people and the planet while remaining profitable.
- • Inclusive business means providing affordable and tailored products for disadvantaged people (e.g. loans without collateral for women, accessible financial services for low-income people, and providing advance payment for suppliers).
- • Inclusive business means economically empowering poor people at the bottom of the pyramid by giving them trainings, by hiring them directly, or by selling to them affordable products.
- • Inclusive business means giving back to society (e.g. scholarships for girls, distributing solar lights, and supporting rural workers).
The extent to which an organisation’s core business model directly tackles critical social issues is an important characteristic of a successful inclusive business model (Nelson et al. 2013; Van Tulder and Da Rosa 2011). Our data, however, shows that inclusive business is, in many cases, still seen as a corporate social responsibility (csr) initiative that is not directly linked to core operations. We find that particularly among African respondents inclusive business is characterised as the responsibility of the csr department, whereas inclusiveness strategies appear relatively well integrated within the organisation among Dutch respondents. However, many African organisations also indicate that they tailor their products to meet the needs of disadvantaged people. This seems a typical sign of organisations that are in a relatively early (and often reactive) stage of transition to a more inclusive business model – despite of their frontrunner status (cf. Van Tulder et al. 2013). The transition literature argues that these companies face a number of additional barriers to change in their internal organisation as well as in their relations with external stakeholders.
A few organisations appear to be ahead of the curve in terms of promoting inclusiveness. One tourism organisation, for example, defined its vision of promoting “the five Ps”, which, in addition to the triple P’s of Planet, People and Profit, includes Passion and Pleasure. Likewise, a number of organisations pointed out that they actively reach out to partner with other stakeholders to maximise social impact. In contrast, a few other organisations indicated
Taking the transition stage that companies are in – between strategic intent and realisation – thus provides an important context through which to assess their inclusive business strategies. The critical csr literature argues that companies that have not successfully linked their csr (inclusiveness) ambitions to actual realisation are engaged in “window dressing” (cf. Frynas 2010). This argument, however, fails to appreciate the importance of the transitioning process that companies have to go through and which requires ambitions first and implementation later – often under challenging circumstances (cf. Mintzberg et al. 2009). 2
The respondents also identified a number of strategies used for promoting inclusion, such as improving access to education, inclusive finance, value chain development, inclusive/frugal innovation, and making available affordable products. Among these, providing affordable products appears to be the most widely used strategy, especially in Africa, which perhaps reflects the pressing challenge of satisfying customers with low purchasing power. Developing different aspects of the value/supply chains is also among the most frequently cited approaches for inclusiveness. The importance of value chain development could be reflective of the fact that agriculture and agribusiness are important sources of livelihood for millions of subsistence farmers in Africa ( giz 2013).
Levels of Inclusiveness
Do organisations differ in the emphasis or priority they give to inclusiveness? To answer this question, the survey included a question that asks: “On a scale of one to ten, how would you evaluate the extent to which becoming ‘inclusive’ is a policy priority in your organisation?”
Comparison of businesses and ngos shows that ngos give notably higher priority to inclusiveness (Figure 4.1). The relatively low level of standard deviation among ngos also indicates that the adoption of inclusiveness policies is unanimous among civil society organisations compared to businesses. This result confirms the pioneering role ngos can play in promoting socially-oriented policies.
Policy priority of inclusiveness: Businesses vs ngos
The level of priority given to inclusiveness also differs among industries in terms of adopting inclusiveness (Figure 4.2). The energy industry (N = 4) gives the highest level of priority for inclusiveness, followed by food (N = 10) and finance (N = 9) industries. In contrast, the transport and logistics industry (N = 4) gives by far the lowest level of priority for inclusiveness.
Average levels of policy priory for inclusiveness by industry
A potential reason for these variations is the nature of the industries, especially their proximity to and embeddedness with local communities. For example, businesses in the food industry by definition have to engage directly with farming communities from whom they source their raw materials. In contrast, industries such as transportation and logistics that often serve business customers are less likely to have strong ties with local communities. In addition, the adoption of inclusiveness themes in management discourse is likely
Priority Disadvantaged Groups and Exclusion Issues
Priority Disadvantaged Groups
One way of characterising inclusive or social businesses is identifying the disadvantaged groups or societal issues their business models aim to address (Mair et al. 2012). We, therefore, include the following question in our survey: “Which potentially disadvantaged groups are most relevant for your organisation?” Respondents were given the option of indicating more than one answer when deemed necessary.
The responses to this question across the whole sample are summarised in Figure 4.3. The figure shows that empowering women to foster gender equality is considered to be the most important goal of inclusiveness. As indicated in the note under the figure, 36 organisations, or about half of the total sample, consider women priority social groups. Owners of small enterprises and poor people (employees) are the next most important disadvantaged groups. The focus on these disadvantaged groups is perhaps not surprising considering the prevalence of significant informal economic activity, poverty, and gender inequities in East-Africa.
Priorities given to different disadvantaged groups
Note: The maximum response (1) is 36 (of the total sample of 75 organisations)
Next to the above-mentioned “top-priority” disadvantaged groups, a number of other groups were given moderate level of priorities. These include rural inhabitants, illiterate people, (owners of) medium-sized enterprises, and
Figure 4.3 also allows comparison of responses among African and Dutch organisations. The solid-filled bars indicate responses among African organisations, whereas the pattern-filled ones indicate the responses of Dutch organisations. The two groups of respondents seem to agree with the top-level priorities (women, small enterprises, and poor people/employees). However, empowering illiterate people seems to receive more attention among African organisations than their Dutch peers, whereas the reverse is true for medium-sized enterprises.
Further investigation of the responses suggests some important variations across countries. For example, organisations from Tanzania and Uganda consider illiterate people as top priorities, whereas those from Mozambique and Rwanda consider them among the least prioritised groups. Likewise, respondents from Kenya and Tanzania consider, respectively, disabled people and indigenous people as top priorities, although these groups fall much lower
Priority Societal Issues
Which societal issues are targeted by inclusive businesses? This question already hints at the value propositions that inclusive business could offer with regard to social inclusion and development. Our survey, therefore, included a question whereby respondents could select priority social exclusion issues.
The responses to this question are reported in Figure 4.4. The top three priority societal issues are employment generation, access to finance, and capacity building. Closely following them are the issues of access to information, access to education, and income and productivity growth. These results tally with the results reported in the previous section, suggesting that organisations use employment generation and income/productivity improvement to target
Priorities given to different societal issues
Note: The maximum response (1) is 42 (of the total sample of 75 organisations)
A large number of societal exclusion issues receive medium-level priority. These include community development, medium and small firms and microenterprises, access to energy, access to clean water, new enterprise development, and health services. Finally, a number of issues related to social justice and security receive the least level of response. Overall, these results indicate that “inclusiveness” is more strongly associated with economic empowerment rather than other (social and political) aspects of development.
Comparison between African and Dutch organisations does not indicate any large priority differences. Two minor exceptions are income and productivity growth, which received greater response from Dutch organisations compared to Africans. By contrast, African organisations give greater priority for access to information than their Dutch counterparts.
Comparison of the results across countries indicates notable differences in the importance attributed to “access to information”. The issue receives significantly higher level of priority in Ethiopia, Mozambique, Uganda, and Tanzania, whereas it is among the least priorities in Rwanda and Kenya. Likewise, there is limited cross-country unanimity on the importance of employment generation, which is a top priority in Ethiopia, Kenya, and Rwanda, but much lower in the list in Mozambique, Tanzania, and the Netherlands. Dutch organisations also focus on a broader range of exclusion issues compared to other African organisations. Again, these findings suggest heterogeneity across countries and thus point to the importance of addressing country- and sector-specific factors to understand the types of social issues taken up by inclusive businesses.
Challenges Faced by Inclusive Businesses
To find out the most important challenges that organisations face in their efforts to implement inclusive business practices, the survey posed the following question: “What are the most important managerial, organisational, technical or external obstacles that hinder your organisation from becoming more inclusive and contributing to society?”
The question was open ended so that respondents could provide their own responses for each category of challenges. The respondents identified dozens of challenges with varying degrees of importance. Word frequency analysis revealed that factors such as policy, capacity, resources, and government are most frequently mentioned. However, many words describe the same idea – for example, the words knowledge, skills, education, and training all describe more or less the same concept.
Table 4.2 summarises the identified challenges more systematically by grouping them into four major categories. Among technical obstacles, shortage of trained and skilled manpower is the most important obstacle that organisations face. A larger number of organisational obstacles were identified, including lack of financial resources and limited organisational capacity. Bureaucracy within the organisation was also found to be an important hindrance. Finally, an even greater number of external obstacles were pointed out, including inhibitive government policy, insufficient access to electricity and road networks and, more generally, to public infrastructure, high levels of corruption and unfavourable laws and regulations.
We use a word frequency graph to assess the importance of these challenges. Figure 4.5 presents the results of the word frequency, also subdividing the total frequency between African and Dutch respondents. Shortage of skilled and knowledgeable manpower was identified as the most important performance obstacle, followed closely by limited financial resources. African and Dutch organisations unanimously identify these two issues as by far the most important challenges to becoming inclusive.
Major challenges faced by inclusive businesses
Note: The maximum response (1) is 44 (of the total sample of 75 organisations)
These responses are not different from findings in other surveys. For example, a undp report finds that the five primary constraints in the market environment of developing countries are lack of market information, ineffective regulatory environments, inadequate physical infrastructure, limited
A second-tier list of challenges in terms of importance includes shortage of resources, poor government policy, insufficient infrastructure, lack of access to energy, limited organisational capacity, and constraining government laws and regulations. The level of emphasis given to these constraints is generally comparable between African and Dutch respondents. One exception is constraining laws and regulations, which are perceived to be more important by Dutch organisations. In contrast, access to electricity and roads is considered to be of greater importance by African respondents.
Discussion and Conclusion
This chapter provided exploratory results on different aspects of inclusive business practices in Africa. The chapter highlighted major approaches and strategies towards inclusiveness, priority disadvantaged groups and exclusion issues, and the kinds of challenges faced by frontrunner inclusive businesses.
The
Inclusiveness is generally understood as economically empowering disadvantaged groups of people, especially women, small-scale entrepreneurs, and poor people, but also, to some extent, rural inhabitants, illiterate people, and owners of medium-sized enterprises. The focus is mostly on improving income and productivity for these people by means of employment creation, improving access to finance, capacity building, and access to information and education.
The survey identified a large list of internal and external obstacles that limit the ability of organisations to implement their inclusiveness policies. Shortage of skilled manpower and limited financial resources are found to be the two most important constraints In addition, a number of organisational factors, such as lack of capacity and bureaucracy as well as external factors, such as poor infrastructure, low levels of access to energy and roads, and prohibitive laws and regulations were identified as critical obstacles.
What kind of policy lessons can be extracted from this analysis? While our results indicate a number of ways in which the private sector is contributing to inclusive growth, they also suggest significant technical and organisational challenges that limit its ability to achieve social impact. In this last section, we consider potential policy interventions that could alleviate the most important challenges for inclusive businesses, namely inadequate technical and managerial know-how and shortage of financial resources.
Building Inclusive Ecosystem
An economic community supported by a foundation of interacting organizations and individuals – the organisms of the business world. […] The member organisms include [consumers,] suppliers, lead producers, competitors, and other stakeholders. Over time, they coevolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies.
Supporting institutions are largely absent in many African countries, which could adversely affect performance in many ways. For example, poorly developed “framework conditions”, such as public education, could expose businesses to productivity losses and remedial-training costs (Porter and Kramer 2011). Since most firms do not have the resources and the capacity to build inclusive business ecosystems single-handedly, they need to rely on collaborative efforts that are able to mobilise sufficient resources and technical know-how ( giz 2013; Gradl and Jenkins 2011). From the lead company’s perspective, the best approach would be identifying gaps and deficiencies that represent the greatest constraints to productivity and growth (Porter and Kramer 2011). The company can then distinguish those areas where it is best equipped to lead cost effective collaborative efforts. Gradl and Jenkins (2011) identified three strategies in which multinationals could strengthen their inclusive business ecosystems: (i) Unilateral initiative, e.g. educational, or infrastructural interventions; (ii) Project-based alliances between a company and one or more organisations and; (iii) Platforms that allow many different players to coordinate with each other. There is also great potential for partnership strategies (Lem et al. 2013), which requires proper partnership management practices, but also requires national legal conditions under which cross-sector partnerships can materialise. The link between the inclusiveness strategy of companies and the macro-outcome on the national level in terms of inclusive growth is achieved through the creation of new institutions of which partnerships seem to be an important form. Further research is thus needed to identify how African countries can provide better legal, cultural, and institutional conditions than others for “inclusive partnerships”.
Inclusive Financing
The financial sector in Africa is uncompetitive and often state-dominated, which limits access to external financing that is critical for the development of a vibrant private sector. External financing is especially likely to be scarce for inclusive businesses that also take up social issues, and thus appear to be relatively more risky (Gradl and Jenkins 2011). Inclusive businesses may take longer to become profitable, and therefore have long-term investment horizons, which would discourage private investors pursuing only financial return (Jenkins et al. 2010; giz 2013). It is, therefore, imperative to avail targeted financing schemes that are especially designed to meet the needs of socially-oriented businesses. Firstly, governments and other policymakers could encourage and invest in venture capital schemes that fund start-ups. Providing initial seed money for innovative solutions with significant social impact can be fruitful, as has been shown by the uk Department for International Development’s (dfid) experience of investing in M-PESA, the now famous mobile-based banking system in Kenya. Local governments need to provide regulatory support for impact investors, while also encouraging local entrepreneurs to capitalise on emerging financing schemes such as crowdsourcing. Secondly, policymakers could support the development of local financing sources for aspiring inclusive businesses. Many African countries have state owned development banks. These banks are shielded from competition and are often slow to adopt new lending modalities that foster the development of inclusive businesses. Institutions with greater expertise on inclusive business financing, such as the World Bank, could collaborate with local development banks to enhance their ability to fund inclusive businesses. Finally, providing further support to microfinance institutions could improve financial access for small and micro-businesses, especially those owned by women and those in rural areas. Apart from direct financial provision, governments could provide policy and regulatory support and capacity development for smaller microfinance institutions to help them deliver financial services with greater potential for social impact.
Knowledge Generating and Sharing
There is great scope for generating and sharing practical knowledge to enhance the capacity of the private sector to achieve greater social impact. One potentially fruitful approach is establishing and strengthening resource centres that specialise in generating and sharing applied knowledge. Well-run, sector-specific centres of excellence could serve as knowledge portals that generate, consolidate, and disseminate market and technological know-how
Business incubation centres have the same advantage of serving as portals for creating and disseminating practical knowledge on business development. Business incubation hubs can provide a safe space where aspiring entrepreneurs can experiment with new business concepts, share experiences, and learn from one another. They can be important nods for connecting entrepreneurs, especially in countries where support services are scarce and knowledge and expertise is geographically scattered. Experiences in developing countries (iHub in Nairobi and Impact Hub around the world) illustrate the usefulness of open spaces for business incubation and innovation.
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The survey was a part of a larger research projected funded by nwo-wotro on the subject of inclusive business models in Africa. The research project further looks into the various definitions and operationalisations of inclusive business and the process of transitioning strategies towards greater inclusiveness.
The research in this chapter is a part of a larger research project that aims to reveal the conditions under which inclusiveness intentions can materialise in specific sectors and in African countries. Analytically, we thus have to make a distinction between “real” intentions and “window dressing” intentions. In other studies, we have made the distinction between (1) intrinsically and (2) extrinsically motivated strategies and between (a) reactive and (b) active strategies. This will be further elaborated in the present research project (Van Tulder et al. 2013).
There are several examples of inclusive ecosystems in the BoP including mobile money ecosystems (Jenkins 2008), financial services (Ehrbeck et al. 2012), and agricultural value chains ( giz 2013; Chung et al. 2004). Examples of successful ecosystems include it in Silicon Valley, North Carolina’s Research Triangle, cut flowers in Kenya, and diamond cutting in Surat, India. The “Silicon Savannah” technology ecosystem in Nairobi, as well as the Konza Techno City that is under construction, are other recent examples of emerging business ecosystems.