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?

• Sign up here 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