Strengthening Inclusive Business Ecosystems

1. Strengthening Inclusive Business Ecosystems The WHAT, the WHY, and everything we know about the HOW

2. Overviewoftrainingcontent • Day 1: Learn about the importance of inclusive business models and inclusive business ecosystems • Day 2: Understand how to strengthen ecosystems and develop your own initiative • Day 3: Learn how to facilitate multi-stakeholder processes and how to measure their success

3. Ground Rules for the training • Please try to be prompt so that we can start and finish on time • Concise speaking • Respect for other people’s ideas • Mobile phone usage: Please step outside if absolutely necessary

4. Sessions – Day 1 • Session 1: Registration and Welcome • Session 2: Interactive round of introduction • Session 3: Learn about inclusive business models and discuss examples • Session 4: Learn about inclusive business ecosystems and discuss examples • Session 5: Group work to develop your own IBEI • Wrapupandreflectionoftheday

5. Sessions – Day 2 • Session 6:How can we strengthen inclusive business ecosystems? • Session 7:Group work to advance your IBEI

6. Sessions – Day 3 • Session 8:Facilitating stakeholder dialogue • Session 9: What is needed to effectively monitor and evaluate IBEIs? • Session 10: How UNDP AFIM private sector unit can support COs in implementing IBEI • Session 11: Group work to develop action plan for your IBEI and present next steps • Wrap Up

7. Day 1: Table of Contents • Session 1: Registration and Welcome • Session 2: Interactive round of introduction • Session 3: Learn about inclusive business models and discuss examples • Session 4: Learn about inclusive business ecosystems and discuss examples • Session 5: Group work to develop your own IBEI • Wrapupandreflectionoftheday

8. Day 1: Table of Contents • Session 1: Registration and Welcome • Session 2: Interactive round of introduction • Session 3: Learn about inclusive business models and discuss examples • Session 4: Learn about inclusive business ecosystems and discuss examples • Session 5: Group work to develop your own IBEI • Wrapupandreflectionoftheday

9. Introduceyourneighbour! • To Group: • Your name, country, organization, and role? • To Table: • What is your interest in inclusive business? • Do you have a specific sector interest for an IBEI? • What would you like to get out of this training? ? ?

10. Day 1: Table of Contents • Session 1: Registration and Welcome • Session 2: Interactive round of introduction • Session 3: Learn about inclusive business models and discuss examples • Session 4: Learn about inclusive business ecosystems and discuss examples • Session 5: Group work to develop your own IBEI • Wrapupandreflectionoftheday

11. UNDP has begun to look at people living in poverty in a fundamentally new way From recipients of charity or wards of the state… to creative and resilient entrepreneurs and value conscious consumers with the desire, and enormous potential, to forge their own paths out of poverty

12. “Inclusive business” provides that opportunity This is not charity—the benefits depend on the profitability and growth of the business

13. Inclusive Businesses can contribute to the Sustainable Development Goals (SDGs) • SDGs define global development aspirations for 2030 and call for action among governments, business and civil society • Inclusive Businesses contribute to SDGs by integrating low-income people into their business strategies. • Provide decent jobs and livelihoods • Provide quality and affordable goods and services • Reduce poverty and shrink inequality • Create value and foster prosperity

14. MSMEs drive Africa’s inclusive business Source: UNDP (2013) RealizingAfrica'sWealth. (Based on 400 casestudiesidentified in sub-SaharanAfricathroughdesktopresearch)

15. Case study:The Clouds Mountain Gorilla Lodge in Uganda The Clouds Mountain Gorilla Lodge is located in South-East Uganda and offers a beautiful and intimate holiday experience and gorilla tracking activities. Since it opened, this small, remote lodge continues to win prizes, awards and accolades both internationally and locally. 30,000 low-income people participate as: • Owners receiving annual lease fees and a percentage of the Lodge’s revenues • Employees enjoying stable jobs and incomes • Suppliers earning revenues by providing fresh foodstuffs, construction and maintenance services

16. Case study:INENSUS MicroPowerEconomy in Senegal INENSUS focuses on innovative solutions for decentralized power supply in mini-grids based on renewable energies. Since 2010, the company has connected several villages in rural Senegal. Through village power committees, people learn how to use the tariff model, raise micro loans and establish micro businesses. 4,000 low-income people participate as: • Customers of clean andstableelectricity • Entrepreneurssettingupmicrobusinesses

17. Case study:EconetMobile Money Transfer in Lesotho Since2012, Econet Telecom Lesotho (ETL) has opened doors for individuals to use mobile technology for financial services without having bank accounts. EcoCashis a Mobile Money Transfer Service that allows Econet subscribers to make transactions with their mobiles. Customers can transfer money to other subscribers, pay their prepaid electricity and water bills, DStvsubscriptions, insurance premiums and more. 226,000 low-income people participate as: • Customers ofthemoneytransferservice • Entrepreneursworkingasagents

18. We want inclusive businesses to succeed Inclusive businesses can: • Offer low-income people greater choice and dignity • Improve affordability and quality through competition • Achieve financial sustainability and scale of impact, individually or collectively • Make green and inclusive growth possible and help deliver on many other Sustainable Development Goals • Of course, companies must adhere to equal or even greater standards of responsible business conduct when doing business with the poor

19. Group work: Analyze and understand inclusive businesses TASKS: • Break out into groups of 8-10 people each for 30 minutes! • Share inclusive business examples that you are aware of in your countries! • Select one example and discuss the example in greater depth, using the Inclusive Business Strategy Matrix!

20. The Inclusive Business Strategy Matrix • Solutions Constraints Source: UNDP (2008) Creating Value for All – StrategiesforDoing Business withthe Poor

21. Questions and open discussion • Whatarethebenefitsofworkingwith an inclusive businessapproach? • Whatarechallengesandrisks? • Any open questionson the inclusive businessconcept? ?

22. Day 1: Table of Contents • Session 1: Registration and Welcome • Session 2: Interactive round of introduction • Session 3: Learn about inclusive business models and discuss examples • Session 4: Learn about inclusive business ecosystems and discuss examples • Session 5: Group work to develop your own IBEI • Wrapupandreflectionoftheday

23. Like all businesses, inclusive businesses need the “4Is” Information provides businesses with the awareness, knowledge, technology and know-how required to operate in low-income markets • Investment provides the financial backing that enables businesses to venture into challenging low-income markets • Implementation support provides the logistics, transaction, marketing and communication, and micro-business support services that allow IBs to function in a variety of dynamic environments Incentives provide businesses with the impetus to engage with low-income communities by rewarding positive externalities and reducing the cost of doing business

24. But inclusive businesses often face higher barriers to access • Commercialinvestors can be skeptical about the viability of businesses targeting the poor, impact investors about the social returns. In addition, poor producers and consumers often lack the credit to finance purchases. Businesses know too little about the poor– what poor consumers prefer and what they can afford. Explicit incentives to include low-income people are rarely available. The overall regulatory environment is challenged by informal markets, restrictive regulation and red tape. Business services (logistics, marketing, retail etc) are not widely available. Supportive infrastructure such as transportation, electricity, and telecommunications networks are lacking.

25. Why? – Because their ecosystem is weak

26. Need forFacilitation! • Ecosystembuilding initiatives bring manyplayerstogethertocoordinate, addresschallenges, co-createsolutionsandinnovate in systematicandinter-operative manner; • These initiatives haveshownsuccess in enabling inclusive businesstoscaleupandsucceed.

27. Like species, businesses depend on supportive “ecosystems” • Introduced in a McKinsey Award-winning Harvard Business Review article, the term “business ecosystem” refers to the community of interconnected, interdependent players whose actions determine whether or not a company's inclusiev business model will succeed." • Source: Gradl and Jenkins (2011) tackling barriers to Scale: from Inclusive Business Models to inclusive Business Ecosystems

28. All ecosystem stakeholders have roles to play

29. G20 inventory of policy instruments Also see: http://www.g20inclusivebusiness.org/discover

30. These ecosystems can make or break businesses’ prospects for success at scale • MAKE: In Kenya, more than 20 million people (50%) use their mobile phones to transfer money, with greater convenience and reduced cost and risk compared to cash. • Safaricom collaborated with the MFI Faulu Kenya and the NGO Microsave, who had intimate know how of the low-income market • DFID contributed seed funding for Safaricom’s pioneering M-PESA service through a challenge fund with matched funding • Regulator allowed M-PESA to proceed on an experimental basis, without formal approval • Safaricom was able to find (and pay) a professional services firm capable of training and managing a vast agent network • Conducive regulation was developed in dialogue with the private sector, enabling a other mobile operators and banks to enter the market.

31. These ecosystems can make or break businesses’ prospects for success at scale • BREAK: In India, where M-Pesa launched mobile money in 2013, regulatory barriers slowed down the pace of service provision to unbanked. • Regulator only issued a ‘semi-open’ wallet license which meant customers would be able to send and receive money and pay bills but couldn’t take out cash. • Vodafone had to tie up with local banks to operate in India unlike in Kenya where they hold the money in a Trust Fund. • Guidelines also dictated that agents had to be in a 30km radius of partner bank branches.

32. Inclusive businesses’ ecosystems are especially prone to “break” their prospects Key ecosystem stakeholders may lack the capabilities necessary to support inclusive businesses • For example, market research firms may lack the skills and techniques to obtain accurate data on low-income customers Key ecosystem stakeholders may be missing • These often include low-cost suppliers, credit bureaus, and certification bodies And many inclusive business models are new and unproven • They may lack the networks, influence, finances, or track records to obtain the support they need from key ecosystem stakeholders

33. UNDP could intervene to provide inclusive businesses with the 4Is directly… …through challenge grants, technical assistance, partnership brokering, and other support The rationale boils down to leverage: • If you support an inclusive business to reach financial sustainability, you will benefit many more people over time than you would by paying for free services now • In addition, successful inclusive businesses may inspire copycats But this approach has its drawbacks: • Individual inclusive businesses often fail • When individual inclusive businesses do succeed, copycats often struggle to find the support they need to follow in their footsteps • While some individual inclusive businesses have disrupted entire industries and systems, they are a small minority

34. But we would prefer to do it by strengthening inclusive business ecosystems • To address root causes • To drive sustainable, systemic change • To affect entire industries and markets • To allow all companies to achieve greater levels of success and scale • To achieve broad-based inclusive growth • To reach and benefit more low-income people with critical goods, services, and livelihood opportunities • To deliver the SDGs

35. Learn from real live examples! • Some UNDP COs already started setting up IBEIs. Other examples include Cocoa Action and Lighting Africa. Let’s hear some of their experiences! • Join one group and interview the IBEI about their experience! • Which interventions are you considering? • Who is part of the ecosystem? Who are the most important players? Whydidyouchoosethesector? What do youaimtoachieve? Whataregaps in theecosystem?

36. Questions and open discussion • Do you have questions on the inclusive businessecosystemconcept? • Do youseechallenges in applyingtheconcept? ?

37. Key Sources Jenkins, Beth et al. 2016. “Strengthening Micro-Enterprise Ecosystems.” Published by a coalition including SABMiller, Business Fights Poverty, Citi, CARE, CSR Initiative at the Harvard Kennedy School, DFID, IDB, etc. Nelson, Jane and Beth Jenkins. 2016. “Tackling Global Challenges: Lessons in System Leadership from the World Economic Forum’s New Vision for Agriculture.” Cambridge, MA: CSR Initiative at the Harvard Kennedy School. Jenkins, Beth et al. 2014. “Sustaining and Scaling the Impact of Enterprise Development Programmes: SABMiller’s Approach to Strengthening Business Ecosystems.” Cambridge, MA: CSR Initiative at the Harvard Kennedy School. UNDP. 2013. “Realizing Africa’s Wealth: Building Inclusive Businesses for Shared Prosperity.” New York: UNDP. Gradl, Christina and Beth Jenkins. 2011. “Tackling Barriers to Scale: From Inclusive Business Models to Inclusive Business Ecosystems.” Cambridge, MA: CSR Initiative at the Harvard Kennedy School. UNDP. 2008. “Creating Value for All: Strategies for Doing Business with the Poor.” New York: UNDP.

38. Further reading

39. Day 1: Table of Contents • Session 1: Registration and Welcome • Session 2: Interactive round of introduction • Session 3: Learn about inclusive business models and discuss examples • Session 4: Learn about inclusive business ecosystems and discuss examples • Session 5: Group work to develop your own IBEI • Wrapupandreflectionoftheday

40. Group work:Start working on your IBEI! • TASKs: • Break out into your IBEI groups for 30 minutes! • Work on guiding questions introduced by your facilitator! • Define your goals for the next 2 days and develop concept note that defines the sector for your IBEI, challenges to address, objectives, role of IB and main gaps (work with the IB Diamond).

41. Day 1: Table of Contents • Session 1: Registration and Welcome • Session 2: Interactive round of introduction • Session 3: Learn about inclusive business models and discuss examples • Session 4: Learn about inclusive business ecosystems and discuss examples • Session 5: Group work to develop your own IBEI • Wrapupandreflectionoftheday

42. Wrapupand end ofthedayreflection • Are theconcept IB and IBEI approachcleartoyou? • Whichdoubtsremain? • What was your key take away today?

43. Day 2: Table of Contents • Session 6:How can we strengthen inclusive business ecosystems? • Session 7:Group work to advance your IBEI

44. Strengthening IBEs requires 5 steps Increased opportunities for low-income people through stronger IBEs Engage ecosystem stakeholders Design collaborative action plans Cultivate shared vision for change Assess scope and feasibility Implement and con-tinuously improve Enable mutual accountability and learning

45. We can learn from the Collective Impact approach Adapted from FSG

46. Achieving large-scale change through collective impact involves five key elements of success Adapted from FSG

47. Example: World Cocoa Foundation (WCF) Adapted from FSG

48. Revitalizing the cocoa sector in Côte d’Ivoire requires coordinated, multi-stakeholder action Adapted from FSG Source: Bloomberg.com

49. CocoaAction seeks to accelerate cocoa sustainability and improve the livelihoods of 300,000 cocoa farmers Adapted from FSG

50. A number of outcome-specific and support work streams will help CocoaAction achieve progress Adapted from FSG