NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

How do we increase awareness for the concept of inclusive business? The WBCSD Future Leaders Team 2009 tackled this important question during an 8-months training program they are wrapping up this month. This week, the 13 young professionals tested their response to that question in a gathering in Washington DC with representatives from a range of institutions working on the topic including the UNDP, the International Finance Corporation, Booz Allen Hamilton, Ashoka, and the World Resources Institute.

The response created by the WBCSD Future Leaders Team is a simulation – “The Inclusive Business Challenge” – that illustrates the wide variety of issues to consider when thinking about inclusive business. Let’s jump right in: Imagine you are a consultant for a US-based textile company wishing to diversify into the Indian low-income market. How would you design each component of the value chain in order to optimize your results in terms of inclusiveness and profitability? Would you choose to stick with business as usual relying on designers from a multinational company or rather work with an NGO to train local designers from disadvantaged communities? Would you procure organic material from a farming cooperative or from a local supplier that works on being more inclusive itself? Would you build your own manufacturing sites or rely on numerous small local enterprises? Would you choose a direct sales approach engaging local women or rather work with a large and already established distributor?

Each choice you make will affect your “inclusiveness score” as well as your costs and revenues, thus directly impacting your profitability. But wait until you hear about the news flashes – news bits that will give an unexpected twist! Your choice might seem like a good idea at first but what if there are natural disasters, if your supplier relies on child labor or if the local enterprises you work with don’t comply with the necessary quality standards?

Participants of the test session were generally well impressed by the quality of the simulation. The common weaknesses of such educational tools, like the oversimplification of the introduced concepts, were outweighed by the easy to understand and engaging simulation approach. The Future Leaders Team also managed to keep the simulation interesting throughout as it was not too easy to anticipate its course. Just because you are confronted with a news flash revealing child labor in the procurement bit of your supply chain does not mean that a similar news flash cannot come up in the manufacturing bit – just like in reality.

The target group of this simulation is comprised of members of the business community who are not very familiar with the challenges and opportunities for inclusive business. Engaging hands-on rather than listening to yet another presentation will enable them to take away several lessons:

• There is a variety of levels and options to consider when designing and pursuing inclusive business approaches.
• There is a variety of internal and external factors that may influence the outcome of business decisions.
• Inclusive business is not only a matter of goodwill but also has potential for increased profitability.

After incorporating the feedback of this week’s test session, the WBCSD Future Leaders Team will finalize their simulation and encourage WBCSD member companies to use it internally. If you are interested in the tool or have advice for the WBCSD on how to disseminate it more broadly, feel free to post your thoughts as a comment right here in NextBillion or send an email to the WBCSD Future Leaders Team. Jessica Davis from WBCSD would surely be happy to share the team’s experience in developing and applying the tool – one that will hopefully contribute to increased awareness for inclusive business and stimulate more dedicated efforts within the business community.