Tackling Barriers to Scale: From Inclusive Business Models to Inclusive Business Ecosystems

Abstract

This paper describes the concept of an inclusive business ecosystem, and presents three structures companies can employ to strengthen these ecosystems. It is based on an analysis of 15 case examples that have been identified in a review of 170 documented efforts by companies to start and scale inclusive business models. Inclusive business models engage people living at the base of the economic pyramid (BOP) in corporate value chains as consumers, producers, and entrepreneurs. Such models offer great promise: to enable business growth in markets that cover two thirds of the world's population, while creating economic opportunity and better standards of living for the poor in the process. Yet while companies - and also donors, development banks and other players - have put much effort into creating such models, relatively few have gained significant scale so far. What is keeping inclusive business models from reaching their full potential? Among the most obvious factors is that operating environments for inclusive business are challenging, with significant gaps in the institutional, informational and infrastructural conditions required to make markets work.