Supporting the Growth of Inclusive Businesses: Three lessons on ‘industry facilitation’
After more than five years spent working with inclusive businesses, first through the Center for Health Market Innovations (CHMI) and most recently the Center for Education Innovations (CEI), we at Results for Development Institute (R4D) have done our share of thinking about what “getting to scale” means.
Of course, there is no simple answer. But the recent report by Monitor Inclusive Markets, Beyond the Pioneer: Getting Inclusive Industries to Scale, prompted us to reflect on the role of an “industry facilitator” – a term coined by Monitor that’s now finding its way into the broader development lexicon.
We started our work in 2009 when the term “industry facilitator” did not exist – but that is essentially the function we wanted to fulfill. We had identified an important gap: Information about the scale, scope and impact of innovations targeting the poor was not easily available, and when it was, it was not always in the hands of decision-makers who could act on it. We also knew that having more and better information about inclusive businesses – where they work, their business models and impact (if known) – alone was not enough. Proactive targeting to connect those working to implement business innovations and those who could support them was also needed.
In response, we launched CHMI and CEI as public good resources to improve access to information about the universe of innovations serving the poor. We collected a lot of data, produced analysis and crisscrossed the world to identify, document and learn from inclusive businesses and those who work to support them – governments, funders, researchers and a whole constellation of members of the so-called innovation ecosystem.
It is worth acknowledging that we agree with what many others have noted before about “getting to scale” – i.e. scale is not necessarily appropriate for all, and if it is, there are many paths to get there. It depends on the services being scaled, how scale happens, who is being targeted, along with many other factors. But in looking beyond individual organizations trying to grow their business models, we saw some common themes about what industry facilitators can do to support the growth of inclusive industries.
First, what goes to scale is not just poorly understood from a business perspective, but also from a policy and impact perspective. Not all inclusive businesses are created equal. For example, over the past few years we have seen the proliferation of pharmacy chains and franchises. This has happened due to a combination of market conditions and the fact that there are some successful examples that have paved the way for the sector. This growth of the pharmacy sector is largely organic, without much intervention by governments and funders. In the area of primary care, on the other hand, inclusive businesses are struggling to scale. This is again due to a variety of factors (e.g., ability of consumers to pay, especially in rural areas; health-seeking behaviors; too few entrepreneurs getting into this business, etc.). Given that extending access to primary care for many countries is a pressing priority, more support should be directed at primary care businesses that do not have the favorable conditions to scale. A concerted effort from relevant stakeholders could lead to greater impact, not just for one primary care business but for the industry as a whole.
Second, targeted learning and the diffusion of what has worked, and how and why, can be just as important as access to funding and other resources. Funding and visibility opportunities such as global competitions and challenge funds have been successful in building important momentum for key global health and education priorities such as maternal and child health and girls’ education. But from what we have observed, taking one, or two, or 10 promising models to scale may not be enough to unlock the potential of a whole industry and impact impoverished millions. Ensuring that there is solid learning coming out of such support, and that that learning is shared widely and proactively with those who are struggling with similar challenges in the same and other countries, may ultimately be one of the key contributions industry facilitators can make.
Third, adaptation and replication can be encouraged more openly and promoted as a public good. One of our key observations is that inclusive businesses rarely develop something vastly different from what came before – many adapt what has seemed to work in other settings and customize it to meet their needs. Open adaptation of what may be working in one setting to another for similar contexts and challenges as one way of encouraging scale is one area where industry facilitators can play a more explicit role. We have observed some of this in the eyecare industry, with industry leaders serving as centers of excellence and learning hubs. More of this can and should happen in other industries and even across sectors.
We at R4D will continue to apply what we have learned about getting to scale in our health and education centers, and in launching work in new sectors. Some of our current efforts will take us closer to being able to identify what types of innovative programs and interventions have the greatest potential for scale and impact (see our work with UNICEF for education) and support those that show promise – as we are doing with our primary care collaborative. We hope that the discussion started by Beyond the Pioneer and other efforts will continue to push our collective thinking forward on the critical issue of what it means to be an industry facilitator.