In many countries, the poor are still excluded 16 from economic development. “Is it possible fight- 17 ing poverty through business?” The idea behind 18 inclusive business is that developing business and 19 fighting poverty can go hand in hand and can be 20 synthesized in “doing business with the poor to 21 combat poverty”: “Whenever I see a problem, 22 I immediately go and create a company” 23 (Muhammad Yunus, Founder, Grameen Bank). 24 There are a number of terms that characterize 25 the concept of inclusive business (Table 1). The 26 inclusive business models also frequently appear 27 in connection with the following two concepts:Social enterprise/social business, which refers 28 to companies that pursue social objectives as part 29 of their business model, among them fighting 30 poverty. 31 Corporate Social Responsibility, which refers 32 to the responsibility of companies to make 33 a contribution to society and prevent damage. 34 Many companies strive to integrate CSR activi- 35 ties into their core business. Inclusive business 36 pursued by companies also falls into this cate- 37 gory. In fact, these types of initiatives also often 38 originate in the CSR department in larger 39 companies. 40 These models try to answer the question: 41 Inclusive business is all about including the 42 poor and disadvantaged, especially in developing 43 countries, in the business process, either as 44 producer or consumer, bringing added value for 45 companies and people living in poverty alike and 46 contributing to poverty reduction through engag- 47 ing them in different ways in any stage of the 48 business value chain: as employees, suppliers, 49 distributors, consumers, and/or innovator – i.e., 50 directly employing low-income people, targeting 51 development of suppliers and service providers 52 from low-income communities, or providing 53 affordable goods and services targeted at low- 54 income communities – thus making a positive 55 contribution to the development of companies, 56 the local population, and the environment. 57 This strategy can be successful because people 58 living in the slums and villages of developing 59 countries have difficulty accessing the market. 60By giving them access, new opportunities often 62 emerge for both sides. 63 In the last years, there has been growing 64 evidence that many companies are making a 65 serious effort to align their core business func- 66 tions with the needs of the societies in which 67 they are operating. Even though business 68 solutions often require complex collaboration 69 with nontraditional partners, as well as a signifi- 70 cant rethink of conventional business models, 71 there are a growing number of companies that 72 have profitably navigated these challenges, and 73 the development benefits appear to have been 74 significant. 75 Inclusive business models can include the 76 developing or adapting existing supply and dis- 77 tribution chains in order to increase the participa- 78 tion of disadvantaged producers, informal 79 traders, and employees; developing or adapting 80 existing product and services needed by the poor 81 and or enable greater access to these product and 82 services to the poor; and creating low carbon, 83 climate-resilient businesses that help business 84 and communities adapt to a changing environ- 85 ment. Relevant domains include renewable ener- 86 gies and energy efficiency, water treatment, and 87 emissions prevention but also medical and phar- 88 maceutical technology or food chemistry. 89 Inclusive businesses can therefore be con- 90 ceived as sustainable business solutions that 91 increase access to goods and services and 92 create new source of income for low-income 93 communities. There are four main areas where 94 the principles of inclusive business can be incor- 95 porated: supply chain, employment; products/ 96 services; distribution channels. Business models 97 that open up these kinds of possibilities also cre- 98 ate income and business opportunities for third 99 parties (employees, business partners, and micro- 100 entrepreneurs), giving rise to other positive social 101 and economic effects. 102 The basic idea is to use the know-how and 103 capital base accumulated at the top of the eco- 104 nomic pyramid to develop its base (BoP 105 approach, Base of the Pyramid). Private-sector 106 institutions and especially governments play an 107 important role in inclusive business ventures. 108 They are responsible for protecting the interestsof both consumers and producers. They can also 109 improve the overall conditions for business at the 110 micro and macro level.
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