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Policy as a worthwhile investment
How public and private actors can join forces to grow inclusive business

POLICYMAKING FOR AND WITH ENTREPRENEURS

The magic ingredient to exponential growth OR Scaling up – done smartly

(The short version for busy executives)

Is it worthwhile talking to a bureaucrat?

  • Normally, no.
  • If I want to live in a country where the poor can afford my products and supply my business, maybe yes.
  • If I want to grow my business and do good at the same time, probably yes.
  • If I need help to grow my business in underserved markets, most probably yes.
  • If I want to work with a bureaucrat for inclusive business “win-win-win magic,” definitely yes.

Where can I sign up for MyiBAN?

Private sector contribution to inclusive business policy development and implementation

(The long version for everybody)

“Don’t go to the master, if you are not called upon” is a German proverb, which encourages people to keep their distance from authorities to avoid trouble. I encounter this same unease among many entrepreneurs who prefer to stay away from policymakers and instead focus on what they perceive as the task at hand: growing their business by staying off the radar. Indeed, many entrepreneurs understand policymaking to be a cumbersome and long winding process with very uncertain outcomes. Spending precious business resources to influence laws that might take years to move from drafting to implementation can sound like a bad risk/return proposition.

So, why are clear-sighted entrepreneurs getting excited about engaging in inclusive business (IB) policy development?

A young entrepreneur from Myanmar gave me an impressive answer. He explained that, together with others like him, he has the opportunity and duty to shape the development of the economy in his country. Either these aspiring entrepreneurs can pursue the way of Milton Friedman capitalism, which will create growing inequalities for decades to come, or they can promote inclusive business models as the way to do business consciously and avoid extreme inequalities. Consequently, young entrepreneurs are taking an active role in the IB Steering Group of Myanmar.

When iBAN and UN ESCAP (United Nations Economic and Social Commission for Asia and the Pacific) began the national IB landscaping process in Cambodia, we talked to many representatives from the business community and the government. We came out of each meeting with the realisation that IB resonates with both groups equally, as it delivers financial returns, inclusive growth and systemic social impact—offering a true win-win-win for business, government and the low-income population. Who could be against that? A discussion on supporting IB through policy instruments catches the imagination of business leaders and policymakers alike, leading to a very constructive dialogue between the public and the private sector. This is in stark contrast to how we think about business and government relating, through fraught debates on taxes, for example.

We also realised that—especially in IB where the ecosystem is not yet developed—the right policy instruments can be the ultimate enablers of business models reaching scale at the systemic level. An example can be found in the Philippines, where the microfinance industry grew sustainably through wise policies by the Central Bank, which were always informed by the industry. The Philippines has now also taken the lead in developing specific IB tax incentives, which in their first year led to projects that channeled USD $57 million to the base of the pyramid. The business community is now engaged in further developing IB policies through a participatory roadmap process, which will increase the ways in which the Philippines can promote inclusive business.

So, is engaging with policymakers as an entrepreneur a waste of time? In my experience, not. It is constructive—sometimes even fun and inspirational—with a great risk/return ratio. Read through this issue to experience more of the IB win-win-win magic and join iBAN’s policy engagement work in ASEAN and sub-Saharan Africa to experience it firsthand.

Yours,

Markus Dietrich

Markus Dietrich
Markus is responsible for iBAN’s activities in Asia. He supports companies to scale up their IB models and policymakers in the development of enabling policy environments. With a background in the private sector, Markus moved to the Philippines in 2008 and set up ASEI Inc., which developed into a leading IB and renewable energy consulting firm in the region working with ADB, GIZ, World Bank and the private sector. Among others, he authored the ADB IB country studies of the Philippines and Tajikistan and engaged in policy advisory for governments on IB and renewable energy incentive programs. Markus is also a committed social entrepreneur who co-founded Hilltribe Organics in Thailand, which engages hill tribe communities in organic farming. Markus holds a degree in Business Studies from CASS Business School and a master degree in International Community Economic Development from Southern New Hampshire University.

featured story

In the era of inclusive business, government is friend, not foe

To transform our economy and help inclusive businesses thrive, business and government cooperation is critical. In this CLUED-iN issue, policymakers, entrepreneurs and others share their thoughts on public-private partnerships and other forms of collaboration between the public and the private sectors. Governments can create an enabling environment for IBs and entrepreneurs can build social innovations that drive policy innovations. The magic is in the synergy!

Dana Gulley

Table of contents

graphic summary

GRAPHIC SUMMARY

A visual summary of the key challenges entrepreneurs need to consider when it comes to policymaking and public-private cooperation for inclusive business. Learn more about these aspects by reading this seventh edition of the newly developed online…

editorial

POLICYMAKING FOR AND WITH ENTREPRENEURS

Dietrich explains how engaging with policymakers as an entrepreneur is constructive and fun, with a great risk/return ratio. After all, “inclusive business delivers financial return, inclusive growth, and systemic social impact—a win, win, win for business, government, and low-income people.”

Markus Dietrich

featured story

In the era of inclusive business, government is friend, not foe

To transform our economy and help inclusive businesses thrive, business and government cooperation is critical. In this CLUED-iN issue, policymakers, entrepreneurs and others share their thoughts on public-private partnerships and other forms of collaboration between the public and the private sectors. Governments can create an enabling environment for IBs and entrepreneurs can build social innovations that drive policy innovations. The magic is in the synergy!

Dana Gulley

What is inclusive business anyway?

As governments, investors—and even inclusive businesses themselves—are increasingly seeking ways to categorise business activity as inclusive or not, these soon-to-be-released operating guidelines can help stakeholders identify those companies that are “truly inclusive businesses.”

How responsible are ASEAN business entrepreneurs?

Dixie and Smaller discuss the ten issue-specific principles that ASEAN has released to guide investments in the region. They argue that entrepreneurs in the region should pay attention to these guidelines if they are to “access an ever-growing pot of responsible investment.”

In Sierra Leone, multi-sector pioneers are transforming financial systems that were built to exclude

Davie explains the impacts of financial exclusion on people’s livelihoods and the huge opportunity for financial inclusion through efforts like the Kiva Protocol, a pioneering public-private partnership to bring over 4 million unbanked adults in Sierra Leone into the formal economy.

Public-private engagement makes good policy—and good business—sense

Miller describes why policy engagement is crucial for inclusive business to thrive and shares the impacts of the Power for All campaign, which used policy reform to accelerate market growth for distributed renewable energy (DRE) in Sierra Leone, Zimbabwe, and Nigeria.

Entrepreneurs wanted: how governments and the private sector can work together to build more supportive inclusive business environments

Marta shares the work of United Nations ESCAP, in partnership with iBAN, to identify policy opportunities in Cambodia to support the development of new and existing inclusive business models. She explains how and why IB entrepreneurs can benefit from engaging in these policymaking efforts.

Shaping the Philippine inclusive business landscape

Moleno gives insights into the Philippines' experience in IB policymaking. Both the country's private and public sectors have embraced inclusive business as an approach to poverty reduction and building an inclusive society. Crafting efficient inclusive business policies has led to positive reactions from the private sector. Moleno describes obstacles that had to be overcome and learnings for other countries.

Scaling catalytic business and policy innovations to take a bite out of food waste

Sir Gordon Conway, member of the Malabo Montpellier Panel, discusses the impacts of global food waste and offers examples of catalytic business and policy innovations that—if replicated and scaled—could mean massive reductions in hunger and poverty, not to mention methane emissions.

Pact for Impact: A global coalition where social innovation inspires ambitious, agile policy

According to High Commissioner Itier, “social innovation means public innovation.” This is why he has helped form a coalition of governments, enterprises, investors and civil society to more quickly transform the traditional economy to be more social and inclusive.

In Your Words

Policy experts share inspiring insights and best practices on inclusive business policies during the iBAN policy roadshow in Nigeria and Kenya