Inclusive Business Policies

Crucial to Overcoming Barriers and Scaling Innovative Business Solutions

Governments have an important role in scaling up IB through the development and implementation of enabling environments for the development of inclusive business models.

The good news is that globally, there is an increase in supportive policy action on inclusive business.

2018 ended with significant momentum on inclusive business policy as the G20 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.

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

Evidence that inclusive business policies work emerged from the Philippines. In 2018, the first full year of implementation of the policy, five projects were approved which target to source USD 5 million worth of goods and services from the BoP and directly hire at least 185 and engage over 1,000 individuals, at least 30 per cent of which are women, from the marginalised sectors.

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

image. Photo by Huynh Mai Nguyen

Countries in the European Union and the EU support inclusive business through their overseas development aid programmes. This momentum is significant and is a clear indicator that policymakers globally aim for enabling environments for inclusive business, so that the lives of people living at the base of the pyramid will improve.

According to the G20 Inclusive Business Framework, “Inclusive businesses provide goods, services, and livelihoods on a commercially viable basis, either at scale or scalable, to people living at the base of the economic pyramid (BoP) making them part of the value chain of companies’ core business as suppliers, distributors, retailers, or customers. In addition to these commercially inclusive activities, businesses may also pursue broader socially inclusive goals. Inclusive business should promote sustainable development in all its dimensions – economic, social and environmental.” The G20 Inclusive Business Report for the 2016 Summit explains that inclusive businesses do thereby contribute to the Sustainable Development Goals in several ways. IB can reduce poverty, shrink inequality, and contribute to sustainable economic growth. The two main reasons why IBs have difficulties to scale their business are a lack of financing and capacity among the BoP. Other obstacles are a shortage of market information and sector-specific frameworks. Pioneering companies implement IB models to tackle these problems. However, government support can increase the impact even more. This can be done by enabling inclusive businesses to enter and operate in the market, supporting them to integrate the BoP into their value chains, and empowering the BoP themselves to participate in value chains.

Many countries have already recognised the potential of inclusive businesses as resources to leverage private-sector development and simultaneously help the poor.

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

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