Inclusive Business: Moving from the why to the how – today's launch of the Business Innovation Facility

Zahid Torres-Rahman

It is striking how far we have come. Only a few years ago, it seemed that many of us, represented in this network, were spending large amounts of our professional energy convincing donor agencies of business’ role in meeting international development challenges. Looking back now, three major trends stand out.

First, there is a widespread, though of course far from universal, acceptance that businesses – from large international and domestic companies to small-scale farmers – have a central role in driving the growth and opportunity needed to underpin a wide range of development goals. Numerous aid agencies have or are developing strategies for engaging business. The UK Department for International Development has stepped up its own efforts in this area, and is now seeking to connect with like-minded donors to drive thinking and action in this area.

Second, the focus has shifted – both for larger businesses and for donor agencies – from philanthropy to core business. That is, rather that focusing on the amount of money companies give away, attention is moving to how they make their money in the first place.

“Inclusive business models” is the latest jargon that refers to business processes and products that create opportunities for poor people. Many have been showcased by the Business Call to Action, and the concept is explored on this excellent website. It practice it covers a wide range of models, from opportunities to be part of the supply and distribution chains of large companies (such as SABMiller’s use of small scale farmers in their supply chain, or Coca-Cola’s use of small enterprises in their distribution chain). It can also include products and services that help poor people generate livelihoods (such a mobile phones with market price information for farmers).

The third trend I have seen has been a shift in focus from the argument around whether business has a role, towards a practical understanding how this role can be best leveraged. How can we best design inclusive business models? How can we best measure their impact? We started to look at these issues last year during the 2009 Event Series, which many members of this site attended and that was hosted by Business Action for Africa, the Overseas Development Institute and the Department for International Development.

We will be diving deeper into these “how-to” issues during the 2010 Event Series, hosted this year by Business Action for Africa, DFID and Harvard University. The two themes are “how to make partnerships work” and “how to measure impact”. We’ll be running events in London starting later this month (watch this space for details), as well as in Africa. We are also planning a series of business practitioner roundtables. The International Business Leaders Forum will be our knowledge partner on the partnering theme, while the World Business Council on Sustainable Development will be our knowledge partner on the impact theme. The ODI will be a knowledge partner across the series.

The how-to story today took an important step forward, with the launch of Business Innovation Facility, funded by DFID. This will provide practical advice to businesses on developing inclusive business models, help businesses find on-the-ground partners, and bring together insights and learnings from the initiatives it supports. The Business Innovation Facility has partnered with Business Fights Poverty to develop a practitioner hub for those interested in the Facility.

While we have a long way to go in embedding an appreciation of business’ role in fighting poverty across the development community, all the trends are in the right direction. And it makes for an exciting time to be working in this field.

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