inclusive business - the importance of scale
TRANSCRIPT
Inclusive Business: The Importance of ScaleDavide Fiedler, WBCSD
Inclusive Business: Solutions at Scale in IndiaChennai, 6 October 2016
Background The context of today’s world
• Slowing economic growth in developed world
BoP maybe world‘s largest untapped market; there is immense room for growth
• The Sustainable Development Goals (SDGs)• Formulate vision of a more equitable world• Emphasize notion of „leaving no one behind“• Provide shared language and common framework for action• Ackwnowledge role of business and explicitly invite business to
contribute• Innovation - Technology - Investment
Background From the bottom to scale
Background The status quo of inclusive business
Companies of all sizes have launched hundreds of inclusive business models…
only very few have reached scale so far.
„Perfect storm“ is forming for inclusive business• Increasing value of corporate purpose & social impact• Emergence of dedicated financing mechanisms• Emerging conducive policies and regulations• Enabling technology & digitalisation
Question now is not anymore „should we do inclusive business?“
but „How do we get better at doing this?“
Magnitude of challenges Poverty in all its dimensions
Source: World Development Indicators
1,7 billion people lack access to basic healthcare
1,3 billion live without electricity
1,1 don’t have access to clean
water
3 billion people live on less than 3 USD per day
Magnitude of opportunities There’s a huge market
1990 2000 2006 2007 2008 2009 2010 2011 2012 2013 20140
20
40
60
80
100
120
140
7175
115121
Mobile cellular subscriptions (per 100 people)
Sub-Saharan Africa South AsiaLatin America & Caribbean Euro area
Source: World Development Indicators
People without access to mobile services
South Asia 438 million
Sub-Sahara Africa290 million
Unbanked adults2 billion
38% of adults have no access to basic financial services and are excluded from the formal financial system
Source: World Development Indicators
Graph from „The Next 4 Billion“
BoP has a combined spending power of 5 trillion USD per year
62% of global
spending is from BoP
Magnitude of opportunitiesSpending power
It encourages innovationFrom marketing to transportation to
product design, inclusive businesses find innovative approaches to serve BoP
customers. It’s acompetitiveadvantageInclusivebusinesses are early-movers into untapped BoP markets. They enhance their brand value and license to operate by building their reputation as a business partner of choice.
It’s a supply chain strategySourcing materials locally from small-scale producers, inclusive businesses build stronger and more productive suppliers and secure access to local resources.
It expands the labor pool
Inclusive businesses have higher access
to appropriately skilled and more
cost-effective employees. Better
wages and more secure livelihoods contribute to local
economies.
Business caseBeyond the numbers
ConclusionIn a nutshell
Scaling up is...
• An attractive business strategy, because of the magnitude of the business opportunities;
• A sustainable development imperative, because of the magnitude of the challenges;
• Challenging, Because business as usual won‘t work;
• Possible!
