An inclusive business is a sustainable business that benefits low-income communities. It is a business initiative that, keeping its for-profit nature, contributes to poverty reduction through the inclusion of low income communities in its value chain.In simple words inclusive business is all about including the poor in the business process be it as producers or consumers.
Large corporations traditionally target consumers in the middle and high-income segments of society, and established suppliers and service providers from the formal economy. Inclusive businesses find profitable ways to engage the low-income segment into their business operations in a way that benefits the low-income communities and creates sustainable livelihoods.
Inclusive businesses may engage low-income communities through, among other things, directly employing low-income people; targeting development of suppliers and service providers from low-income communities; or providing affordable goods and services targeted at low-income communities.
Inclusive business is not corporate philanthropy, which has inherent limitations of scope and budget. Rather, it is the search for sustainable business models that "do well by doing good" and have the potential to become part of the mainstream business model within the companies concerned — the key to business having development impact at scale.
As employees and suppliers, the low-income segments gain access to the formal economy; including provision of training, access to finance and income. As consumers, low income customers can benefit from products and services that meet their needs in an affordable way. If business does both, it opens up the virtuous cycle of business in development. Such an inclusive model functions by engaging the poor in any stage of the business chain. This would result in creating more employment, income, technical skill and local capacity. The basic idea here is to use the know-how and capital base accumulated at the tip of the economic pyramid to develop its base.
Read more about Inclusive Business: Areas For Inclusivity, Challenges
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