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Many believe inclusive business is just philanthropy and only for big
corporates, Suba Sivakumaran busts some of the myths
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Suba Sivakumaran
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Some 30,000 children are expected to benefit from nutritious foods in low-
income areas of Jakarta from the BCtA initiative by global science-based
health and nutrition company, DSM. Photograph: DSM
What is an inclusive business model? Business Call to Action (BCtA) uses the
UNDP definition that says it is a commercially viable model that benefits low-
income communities (those who live on less than $8 a day) by including them
in a company's value chain on the demand side as clients and consumers,
and/or on the supply side as producers, entrepreneurs or employees.
In our five years of experience, we've found that there are many
misconceptions about what inclusive business is.
Some think that companies must have large reserves of cash in order to
experiment with inclusive business model innovation within their companies.
But many small and medium enterprises can and do create business models
that intentionally and explicitly include the poor; from Waste Ventures in India,
to Pupa in Brazil, to Envirofit in Kenya.
8. I can do it alone
Research from BCtA indicates that many inclusive businesses create
innovative partnerships, whether between them and governments, NGOs or
other non-traditional partners that underpin their value chains. Whether it's
NGOs providing technical assistance to smallholder farmers resulting in
improved yields for buyer corporations, or governments that act as anchor
buyers for inclusive businesses and/or create pro-poor business policies,
collaboration between the public and private sector now is the norm rather
than the exception.
9. OK, social impact is important but it's too hard
for me to measure
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What gets measured gets done. And there are a plethora of frameworks, from
the BCtA Reports Resulting Framework, to IRIS, WBCSD's Measuring Impact,
the Oxfam Poverty Footprint, and the BIF M and E system. However, the
proliferation of methodologies has not quite kept pace with the amount of
results being reported by inclusive businesses.
The goal of measurement is not to maximise the amount of data collected, but
to get the right data and institute the right processes that will use that data
internally to refine the business model for the better. At BCtA we advocate
companies to find the right set of questions that are relevant to their
operational (including social impact) performance, recognising that there is no
one-size-fits-all approach to impact measurement.