Innovating for Inclusive Business- Introducing the "Innovation Insider"
The World Resources Institute and the International Finance Corporation did a detailed study of the BOP around the world and estimated that the market is about $5trillion in purchasing power parity. Is this a large untapped market or a fuzzy mish mash of expectations that just cannot be profitably or sustainably exploited? Is the glass half-full or is it half-empty? Any company seeking growth ought to be attracted to this largely untapped market but is the game worth the candle? Is it for everyone? Are innovations in inclusive business suited only to multinational corporations, or is there room for local start-ups as well?
The leading writers on the subject suggest that the key success factors for sustainability of inclusive business approaches are at least service/product acceptability, affordability, accessibility, awareness & availability. So, innovation involves more than “what” is offered and must touch the “why”, “how”, “where”, “when” and for “whom” especially when unorganized, fragmented markets like the BOP are being considered. Sounds like the risks are likely to be much higher than business as usual but are there commensurate returns to be had from promises of “The Fortune At The Bottom Of The Pyramid”?
I explore these issues in a new "Inside Inclusive Business" brief on "Innovation in Inclusive Business". I review the portfolio of projects supported by the Business Innovation Facility to assess who triggers innovation in inclusive business, and what type of innovation we are seeing emerge from these projects.
It shows that whilst certain styles and scopes of innovation (such as in big, bold, commercial moves) may lead to large scale impact on the BOP, others which make a sustainable difference within a small ecosystem or niche are also valid innovations. An important note from the insider is that when companies find it difficult to meet their growth targets through existing capacities they are likely to be more willing to try something totally different – innovation requires a willingness to try something new, better or different.
Is there room to cut one’s innovation ambitions according to one’s cloth and if so, can one match the risks to the rewards? The insider suggests that innovation occurs along a continuum so companies can pick an approach that is right for them. Not all approaches will change the world but some can lead to systemic change. The insider identifies four typologies of companies after the Magic Quadrant developed by the Gartner Group. It concludes that companies classed as “Leaders” according to that typology have the best chance of pulling off systemic change through innovation. What sort of company is yours?
This blog was first published on The Practitioner Hub blog and is reproduced here with permission.