How Do We Build the Inclusive Business Partnerships for the Future?
In my recent reading about inclusive business models I have come across a few major reports that offer the same advice to large companies – transform your business strategy to include the base of the economic pyramid (BoP) as consumers, producers and entrepreneurs and therefore profit from a largely untapped market while having a lasting social impact.
Some of these reports -The World Economic Forum’s “Next Billions” Reports, KPMG’s “Sustainable Insight” Report (2008) and “Growing Inclusive Markets: Creating Value for All” – also emphasize the need for multi-stakeholder partnerships in order to achieve successful inclusive business models. Companies should partner with local actors such as civil society organizations (CSOs), local entrepreneurs and community members in order to accurately develop products and services for the poor. These partners provide local market knowledge, potential distribution channels and local legitimacy to help big business successfully engage BoP communities. Companies are also advised to work with CSOs, the government and other businesses to “combine their capacities” to effectively include the poor in their business strategy.
An often cited example of success is the collaboration between Indian food manufacturer Britannia Industries, the Naandi Foundation (public trust focusing on child rights) and the Global Alliance for Improved Nutrition (GAIN) to make iron fortified biscuits for school children. Using Naandi’s infrastructure of school feeding programs in Andra Pradesh to distribute the biscuits to over 150,000 children, the partnership makes an impact on malnutrition among poor children in India. Britannia now markets these fortified biscuits in commercial markets to reach the general population and has sold over 2 billion packets.
While these examples are informative and encouraging they don’t describe how these partnerships are built. Reports provide wonderful examples of fruitful partnerships that lead to successful market based strategies to improve the lives of the poor, but how did these partnerships get started? How does a large corporation arrive in a BoP community and establish relationships with local actors? When will we move from advice to rigorous research and strategic toolkits to establish effective partnerships?
In the “Second Edition: The Next Generation of BoP Strategy” report released in 2008, Stuart Hart and Erik Simanis make it very clear that we cannot continue to simply sell to the poor as potential consumers of products. “Second-generation BoP strategy requires an embedded process of co-invention and business co-creation that brings corporations into close personal business partnership with BoP communities.”
With BoP 2.0 strategy as our back drop, there emerges a need for real tools and service providers on how to build this intimate partnership. The significance of this struck me during a fascinating Growing Inclusive Markets Initiative workshop last week that brought together all of the major stakeholders to discuss what the next set of case studies should look like in GIM 2.0. Some popular topics included innovation, scalability, collaborative models and environmental sustainability. In my opinion, their first report “Creating Value for All” constitutes an invaluable contribution to the field of inclusive business but if they want to set themselves apart in GIM 2.0 they should include a focus on practical toolkits and lessons learned for business-social collaboration. This would not only provide a practical follow up to their original set of case studies – moving from examples to how-to’s-but fill an essential gap in inclusive business research.
Do others agree that this need for tools and lessons learned (good and bad) are apparent? If anyone has any insight on whether this research exists or any experiences they would like to share they are certainly welcome!