Inclusive Business Policies

Creating enabling environments to scale inclusive business solutions

Governments play an important role in scaling up inclusive business (IB) through the development and implementation of enabling environments. They can make it possible for inclusive businesses to enter and operate in the market, support them to integrate people living at the base of the pyramid (BoP) into their value chains, and empower people at the BoP in collaboration with IB companies. This can be achieved through specific policy instruments laid out in national and regional strategies and action plans on enabling environments for IB.

There has been an increase in supportive policy action on inclusive business around the globe since the G20 endorsed the G20 IB Framework in 2015, published the G20 Call on Financing for Inclusive Business and relaunched the G20 Global Platform on Inclusive Business with a summary of G20 inclusive business policies in 2018.

Learn more about G20 and Inclusive Business

In order to reach a much needed common understanding of IB, the leading stakeholders in the field have collaborated in a working group (led by the United Nations Development Programme, the Istanbul International Centre for Private Sector in Development, Business Call to Action and the Inclusive Business Action Network) to define the key characteristics of IBs. As a result, the Inclusive Business Features were launched on September 23, 2021 as part of the Business Call to Action side event at the 76th Session of the UN General Assembly. This document, designed for businesses, investors and governments, seeks to provide a structured set of features to identify IBs more effectively. It is to be used by policymakers to create a more enabling environment for IBs.

Learn about our policy development programme

female entrepreneurs in India
Women entrepreneurs in rural India. Image: ©  GIZ / Victoria Hohenhausen

Inclusive Business policy developments in Asia

Recent policy reforms in Asia show a strong political will to spur inclusive growth and improve the lives of the poor and the low-income population through IB. In 2017, the leaders of the Association of Southeast Asian Nations (ASEAN) acknowledged the strong support for inclusive business among their member states. They called for greater emphasis on creating an enabling environment for inclusive business in ASEAN, among others through conducive rules and regulations.

The ASEAN Economic Ministers endorsed the “Guidelines for the Promotion of Inclusive Business in ASEAN” in August 2020. These guidelines outline a series of policy instruments for the advancement of IB, which ASEAN Member States can consider and implement. The document, a non-binding reference framework for member states, was introduced and discussed with the public and private sectors during the 3rd ASEAN Inclusive Business Summit in September 2020. It was also referred to in the Chairman’s Statement of the 37th ASEAN Summit in November 2020.

In September 2021, the 4th ASEAN IB Summit explored how governments could put these Guidelines into practice. Two of the core measures proposed in the guidelines – the establishment of an accreditation and registration system, as well as the provision of business coaching services for companies – were discussed in detail. Furthermore, the ways how inclusive businesses and social enterprises were helping low-income and marginalized populations to recover from the economic crisis caused by the Covid-19 pandemic were explored.

ASEAN has made significant progress in advancing the promotion of IB also on a national level. Cambodia, Malaysia and Viet Nam conducted IB landscape studies, which resulted in concrete policy recommendations. Cambodia already turned those recommendations into a national IB strategy. In the Philippines an IB Bill was introduced in the parliament and Indonesia progressed on an IB roadmap for wellness tourism.

Read this in-depth feature about the ASEAN member states' journey from planning to creating inclusive business policies. 

Evidence that inclusive business policies work emerged from the Philippines. In 2018, the first full year of implementation of tax incentives for IB in the context of the Philippine Board of Investments Priority Plan, five projects were approved, which target to source USD 55 million worth of goods and services from the BoP. Also, they will directly hire more than 185 workers and engage over 1,000 individuals from the marginalised sectors, including at least 300 women.

image. Photo by Huynh Mai Nguyen

Growing momentum for Inclusive Business

Outside of Asia, several countries in Subsahara Africa are considering IB as a pathway towards inclusive growth, such as Nigeria and Zambia. IBs are also supported through programmes of development partners. In Nigeria, the GIZ NICOP programme, for example, uses an IB approach to efficiently achieve its objective of SME competitiveness and engages policymakers for supporting measures.

The momentum is significant – a clear indicator that policymakers globally aim for enabling environments for inclusive business to improve the lives of people living at the BoP.

Likewise, many individual countries have already recognised the potential of inclusive businesses as resources to leverage private-sector development and, simultaneously, help the poor. In the coming years, IB will become even more important to mitigate the effects of the Covid-19 crisis on the livelihoods of the most vulnerable.

IB Policies

East Asia and Pacific

Countries in East Asia and Pacific are at very different stages in the promotion of Inclusive Business. Most countries have only just started exploring policy and support options, while others have not yet placed IB in their national agendas. In several frontrunner countries, including Myanmar, the Philippines, and most recently Cambodia, the IB agenda has advanced rapidly over the past two years, with national strategies and pilot support initiatives being developed.
Policy and Government

Europe

The European Union and its member states are supporting through public ODA, funding inclusive business development mainly by European companies in emerging and developing countries.

North America

Enabling social enterprise initiatives to serve marginalised communities is at the forefront of policy instruments on local and national level. The US and Canada are also supporting through ODA funding inclusive business in emerging and developing countries.

South Asia

South Asia is one of the most dynamic inclusive business regions. It is experiencing policy instrument innovation on the supply side of capital for example through the legislation on CSR funding.
Policy and Government

Sub-Saharan Africa

The development of inclusive business policy instruments is at nascent state in Sub-Saharan Africa. Several countries host inclusive business eco-system building initiatives with the public sector, which has the potential to result in a more enabling environment for inclusive business.
Policy and Government