Workshop Schedule

Topichycadb Time

Welcome session 03:00 Pm – 03:10 PM

Lecture Session 1: Introduction to Inclusive

03:15 PM – 05:00 PM
Business

Prayer Break 05:00 PM – 05:20 PM

Lecture Session 2: Business Model Canvas 05:30 PM – 06:45 PM

Prayer Break

Brainstorming Session 07:00 PM – 07:45 PM

Presentation ad Conclusion Session 07:45 PM – 09:00 PM

Content
The Introduction to Inclusive Business, that includes:

•the core concepts behind Inclusive Business and Base of the Pyramid (BoP),

•the Inclusive Business Principles, a tool to evaluate and guide businesses through
the different degrees of inclusivity,

•Value-Chain Actors and Incentives, a framework to understand how to include the

BoP in the value chain, as well as to understand the roles and incentives of
participating and supporting actors in an inclusive value chains,

•Business Model Canvas, a valuable tool for businesses and entrepreneurs to

design a business model that captures and creates value for the customer, the
business and the BoP groups,

•all above is exemplified through the Case Study of an inclusive business that
manufactures children’s toys and clothes in Bangladesh.
Core Concepts
 Inclusive Business
“Inclusive Business is a private sector approach to
providing goods, services, and livelihoods to people
at the base of the pyramid, by including them in the
value chain as consumers, producers and
entrepreneurs” (World Bank Group, n.d.)

Two parallel purposes are - to be commercially viable

and to alleviate poverty.

•Commercial viability: It is when a business,

product, and service has the ability to compete
effectively with it’s competitors and to make profit.

•Poverty alleviation: It is a set of measures, both

economic and humanitarian ,that are intended to
permanently lift people out of poverty.

Source: (World Bank Group, n.d.)

Photo by AtharvaTulsion Unsplash
 So what is inclusive
business again?

”Inclusive businesses create a strong foundation for

profit and long-term growth by bringing previously
excluded people into the marketplace. In addition,
inclusive businesses are often associated with
“green” business practices that conserve resources
and protect the environment.” (UNDP, 2013)

Source: (United Nations Development Program UNDP, 2013; Inclusive

Business Accelerator IBA, 2016)
Photo by Ana Perez Aponte
 So what is inclusive
business again?
Inclusive Business is a business initiative that incorporates low-
income groups into the company’s core processes or within the
value chain, creating value for both the business and low-
income groups.”
(Inclusive Business Accelerator, 2016)

•Actively incorporates: ”it is an explicit effort to incorporate

low income groups in the business initiative or along the value
chain, fulfilling various possible roles” (Inclusive Business
Accelerator).

•Creating value for both the business and low-income

groups :where the value for the low-income groups can be in
the form of products, services and technologies that help meet
their basic needs or opportunities for entrepreneurship and
employment, while the value for the business is, among others,
to generate profit.

•The company’s core processes: thus creating primary value

to a company’s products or services as opposed to preforming
side business activities or being part of the company’s
corporate social responsibility(CSR).

Source: (Inclusive Business Accelerator IBA, 2016)

Photo by Paolo Nicolelloon Unsplash
 Base of the Pyramid
The Base of the Pyramid describes a
socio-economic segment composed of
Mature
more than half of the world’s population
Markets
(as of 2010) which are disempowered
0.5 billion
and unable to satisfy one or more of their
basic needs: food, water, shelter,
clothing, sanitation, education, and/or Emerging Markets
health care.
2 billion

The Base of the Pyramid

4.5 billion

Source: (Inclusive Business Accelerator IBA, 2016; Source: The World Bank/ International Finance Corporation 2010
World Bank Group, n.d.
 Base of the Pyramid
Some characteristics of the BoP are:

-Little or no formal education

-Reliance on unskilled, low-productivity, part-time
employment
-Limited access to markets to buy or sell goods
-Low income and poor returns for their produce or
enterprise
-Limited to no access to (informal) markets
-Lives primarily in the informal economy
-Low access to affordable, quality basic goods and services
-Pay high costs (in effort or cash) for goods and services
-Located in areas that are under-served and have
inadequate infrastructure
-Hard to reach via conventional distribution credit and
communications
-High vulnerability to income shocks, whether due to
climate or insecurity of informal markets

Source: (London & Hart 2010; Departmentfor International

DevelopmentDFID 2015; InclusiveBusiness Accelerator, 2016)
Photo by Eduardo Prim on Unsplash
 Base of the Pyramid
The BoP is a largely heterogeneous Daily Income
group, therefore it is useful to sub-divide Per Capita
it into four sub-segments (as presented
in the right figure), while being still careful
in not generalizing too much per sub- $8-$4
Emerging low to
segment. To avoid over-generalizing it is middle income
important to understand the specific BoP Markets

group being targeted. $4-$2.5 Low income

$2.5-$1.25 Poor

Meet the BoP in

< $1.25 Extreme Poor
Bangladesh using the
Dollar Street Tool
featured by Gapminder.

Source: (Department for International Development DFID 2015; Inclusive Business Accelerator, 2016)
Opportunity size in BoP Market

Engaging people at the BoP as producers, consumers and entrepreneurs is key to improving
their livelihood and driving economic growth for both communities and the private sector.
In total the BoP represents a $ 5 trillion market according to the World Bank Group of which:

• $ 2.3 trillion in food and nutrition

• $ 317 billion in energy
• $ 32 billion in water
• $ 508 billion in housing
• $ 206 billion in information & communication technology
• $ 193 billion in education
• $ 243 billion in health
• $ 405 billion in clothing and personal care
• $ 298 billion in transport

Source: ifc @ www.ifc.org/inclusivebusiness

Opportunity size in Bangladesh
The BoP in Bangladesh is roughly equivalent to 99.6% of the population, categorized as “lowest”
and “low” in the tables below. The sectors with largest BoP consumption are food and beverages,
housing, energy, clothing and footwear, in order of magnitude. The collective annual consumption
for clothing and footwear was 210,500 million taka in 2010. More information at the Global
Consumption Database.
Case Study
Hathay Bunano Proshikhan Samity
(HBPS)
 Tool:
Inclusive Business
Principles
Inclusive Business
Principles
The Inclusive Business Principles (IBP) can be used to
evaluate businesses on their degree of inclusiveness or
as guidelines to improve their degree of inclusivity.

These IBS’s were adapted from those developed in the

LINK methodology* and the Inclusive Business
Accelerator.

Principle 1: Chain-wide collaboration

Principle 2: Targets a BoP group
Principle 3: Effective market linkages
Principle 4: Fair and transparent governance
Principle 5: Access to services
Principle 6: Inclusive innovation
Principle 7: Measurement of outcomes

Source: (Lundy, Becx, Zamierowski, & Amrein, 2012; Inclusive Business

Accelerator., 2016)
Photo by Mihai Surduon Unsplash
*LINK’s New Business Model principles were developed considering BoP
groups mainly as participants in innovation processes as well as
entrepreneurs and smallholders along the value-chain. Thus giving less
attention to their roles as employees and consumers.
Principle 1: Chain-wide
collaboration
Inclusive Businesses are aware and collaborate with
their value chain. There might be actors in the value-
chain which are neglected and receive a
disproportional amount of rewards and risks. Value
chain transparency and collaboration creates
opportunities for marginalized groups to be integrated
as economically viable business partners with an
equitable balance of risk, responsibilities and benefits.

Source: (Lundy, Becx, Zamierowski, & Amrein, 2012; Seas of Change,

2014; Inclusive Business Accelerator IBA, 2016)
Photo by NenadRadojčić on Unsplash
 Principle 2: Target a
BoP group
The business should be very clear in defining
which BoP group is being included, what role do
they play within the business or the value chain,
what is the win-win situation and what is the
impact for them.

Source:(InclusiveBusinessAcceleratorIBA,2016)
PhotobyChinhLeDuconUnsplash
 Principle 3: Effective
market linkages
Markets allow any trade-able items, such as
goods and services to be evaluated, valued and
exchanged. Businesses in markets play the roles
of being are both buyers of inputs and sellers of
products or services. In each transaction it is
important that there is clarity in terms of quality
standards, volume and price. Buyers search for
safe and high-quality products at competitive
prices with low transaction costs, while sellers
search for stable and profitable transactions. A re-
occurring strategy for small players that do not
have stable and direct access to markets, is to
participate in the markets as groups or
cooperatives. They can be self-organized or
organized with external support of a business or
organization.

Source:(Lundy,Becx,Zamierowski,&Amrein,2012;InclusiveBusinessAcceler
ator.,2016); PhotobyAliceYoungonUnsplash
Principle 4: Fair and transparent governance

Governance is understood as the establishment, monitoring and enforcement of formal

and informal rules so that the actors within the businesses or the value chain can
understand and play according to the rules of the game. Within a business it is important
to have fair and transparent governance of i)resources, in order to invest and use the
resources of the business and the BoP groups properly, ii)risks, in order to identify, share
and manage risks properly and iii) rewards, in order to generate and share business
revenues and rewards.

Within the value chain it is important to have clear rules on buying or selling at certain i)
volumes and ii) times, with iii) equitable processes of risk management and under certain
iv) buying conditions, including price, payment terms, grades, standards and regularity of
delivery. Shared commercial risk and insurance against failure are frequently cited as the
cement of successful relationships. In order to motivate the actors to do better, incentives
can be aligned without comes, which can then be reflected in the rules. Even though it is
not constructive to overregulate, it is important to have a minimum level of common
understanding on which actors can base their decision-making.

Source:(Lundy,Becx,Zamierowski,&Amrein,2012;InclusiveBusinessAccelerator.,2016)
 Principle 5: Access to
services
BoP groups often need financial assistance, technical
assistance as well as access to market information
and best practices to improve their quality,
productivity, safety and environmental performance.
Inclusive businesses and NGO often see an interest
in supporting marginalized and excluded groups.
Businesses can find strategies in their business
model to continue working in the commercial value
while integrating the social value offered to BoP
groups. Access to services is critical for making
profitable and reliable business activities for the BoP
groups,

Source:(Lundy,Becx,Zamierowski,&Amrein,2012;SeasofChange,2014;Incl
usive Business AcceleratorIBA,2016)
 Principle 6: Inclusive
Innovation
Innovation is important because it opens up the
possibilities to serve new customer groups or
differentiate in the marketplace which, in turn, enables
a business to be more competitive. Traditionally,
businesses innovate in-house reaping most of the
rewards. This is called closed innovation, and leads to
many actors and stakeholders being left out of the
process and/or the benefits.

Many innovations have been carried out“ on

behalf of” rather than“ with” BoP groups, with a
resulting failure to consult and incorporate their
perspectives and needs or give credit to their
contributions. Inclusive or open innovation includes
stakeholders, such as BoP groups, in the innovation
process to gain far better results while sharing gains
proportionally. Innovations can happen at the
business level or the value-chain level.

Source: (Lundy, Becx, Zamierowski, & Amrein, 2012; Inclusive Business

Accelerator IBA, 2016); Photo by ChinhLe Duc on Unsplash
Example: Proximity Designs
Principle 6: Inclusive Innovation
The ChotuKool is a good example of BoP innovation.
During the product design phase the purpose was to
create a small coolerbox that could meet the cooling,
storage and freezing needs of the unserved BoP
population. Their design process consisted in defining and
proposing design features to the BoP- lower price,
temperature, materials- in turn for feedback.

After testing this approach they understood that this

process would not lead them to the desired insights,
therefore they changed the design process. The team
spent days with the villagers, understanding their habits
and patterns around food, eating, storing and purchasing.
They opened their scope to understand how they satisfied
their basic needs and used their limited household space,
money and tools to satisfy those needs.

The design factors that proved to be valuable in the end

where low-cost, lightweight, medium temperatures, mobile,
resistant to voltage fluctuations and good-looking. Almost
every thing changed from their original product
idea.Understanding that the BoP did not need very low
temperatures encouraged them to change to a cheaper
cooling technology, giving them enough budget space to
build a product which included all valued design factors.
Source:(London&Hart,2010)
 Principle 7: Measurement
of outcomes

It is the process of defining where to go collectively

and if progress is made as agreed by setting,
monitoring and evaluating goals through indicators.
The system boundaries can be drawn around the
business, the value-chain or the stake holders such
as the of BoP groups and their communities, to name
a few. The indicators can be designed using the
Inclusive Business Principles and the Business Model
Canvas as frameworks. Gender relations and
environmental aspects are additional dimensions for
measurement.

The process can serve as a way to identify and

respond early to issues as well as to take advantage
of emerging opportunities. The key is for the results
shared openly with stakeholders and decisions on
how to improve made cooperatively.

Source: (Lundy, Becx, Zamierowski, & Amrein, 2012; Inclusive Business

Accelerator IBA, 2016)
Photo by Pau Casals on Unsplash
Case Study: Inclusive Business Principles

Hathay Bunano Proshikhan Samity (HBPS) in Bangladesh produces hand crocheted and
hand knitted children’s toys and clothes sold in renowned wholesale and retail of
international markets. Founded in 2005 by a British-Bangaldesh couple, Golam and
Samantha Morshed. Samantha understood that good design and market linkages were
critical for success. They offered fairly paid, of good quality, flexible and local employment
to rural women. While to their export customers they offered consistency and quality over
volume of handmade products. HBPS asks their customers to supply the designs, which
are then tried and sampled by HBPS until the customer is satisfied.

HBPS provides employment to poor women that lack of skills and education providing
them skills training on crotchet, knitting, and embroidery at the start and free of charge.
HBPS’ transparent governance is reflected on how they calculate on product prices and
fair remuneration. They pay the artisans per pieces produced. The price-per-piece is
calculated based on the time it takes to make a specific product when it is first sampled.
After the price-per-piece is calculated, artisans have the opportunity to negotiate on that
price. HPBS offers wages 150% higher than jobs and 25% higher than Bangladesh’s
minimum salary.

Source:(HabiburRahman,n.d.;McKague,Morshed,&Rahman,2013)
 Exercise: Inclusive
Business principles

What is HBPS’S BoP target group?

•What are HBPS’ insights in creating market linkages

with their employees and customers?

•What is a good example of fair and transparent

governance?

•What type of services does HBPS’ offer to their BoP

groups?

•Which stakeholder(s) are involved in HBPS’ inclusive

innovation process?

Source:(HabiburRahman,n.d.;McKague,Morshed,&Rahman,2013)