Inclusive business can address problems of the poor at scale in a sustainable, commercially viable way. But this approach is still a small niche, and scaling it up will require all actors to ‘up their game.’
Earlier this year, inclusive business pioneers and thought leaders from across Asia came together to share ideas, experience and knowledge at ADB’s 2nd Inclusive Business Forum for Asia in Manila. The result was four days of lively discussion, collaboration and questioning on the state of inclusive business in the region and where it is heading.
A new report, entitled A Gathering of Pioneers, takes an in-depth look at the key themes discussed and the implications for Asia.
There were diverse participants and views at the forum, but consensus that the potential of inclusive business is huge although so far underexploited in the region. Inclusive business can address problems of the poor at scale in a sustainable, commercially viable way. But this approach is still a small niche, harnessing a fraction of investment and attention. It needs to grow.
Consensus was also strong that scaling inclusive business will require all actors to ‘up their game.’ Aside from businesses and governments, the discussions drilled into the key roles that commercial banks, investors, advocacy facilitators (like business associations) and development banks in particular can play.
We also heard clearly that:
- Inclusive business is less developed in Southeast Asia than the rest of Asia for multiple reasons. The policy framework is improving in all countries, but governments and industry associations can do more to catalyze new business models and create a conducive environment. Inclusive business certification was discussed as a way forward.
- The profitability of inclusive business is now being demonstrated in some portfolios. Impact at scale is emerging. However, perceived riskiness of inclusive business deals remains a huge issue. It is perceived as more risky than conventional investment, but in fact the risk is different—not necessarily higher—and there is a host of risk mitigating strategies already being deployed. There is a need for more information and training for traditional investors.
- Inclusive business is emerging across sectors in Asia. So far it is most common in agribusiness. It is growing fast in finance. Inclusive business innovations are not confined to any sector, and indeed they often involve business partnerships that straddle sectors.
- Participants combined enthusiasm with realism. Inclusive business is hard because it is pioneering. There is no blueprint and iteration is demanded. Leaders in the field started slowly and evolved time and again. There is much further to go but the potential is rewarding.
This was a conference with a difference in many ways: a balanced mix of businesses with investors, bankers and development bankers; a mix of experience from corporates and social enterprises, and from South Asia and Southeast Asia, with candid recognition of the differences; almost all the presentations that speakers used are available online. How often do you hear that will happen but never see the reality? A great synthesis of information about the status of inclusive business in the region was shared by ADB in advance of the conference, and posted in the Practitioner Hub for Inclusive Business.