Editor's Choice June 2013: Realizing Africa's wealth
What is the status of inclusive business in Africa? And what support does it need to thrive? This month's Editor's Choice, Realizing Africa's Wealth, helps answer both questions.
United Nations reports can, to be frank, be boring. This one is not.
It's worth recapping its assumptions first: that inclusive business is a 'good thing' because growth in Africa is not bringing prosperity to everyone so far, and inclusive business can better deliver shared prosperity. (The full title is Realizing Africa's Wealth: Building Inclusive Business for Shared Prosperity).
Secondly, a fundamental premise is that success in inclusive business does not just rely on the entrepreneurs themselves. Progress in inclusive business depends on the 'ecosystem' which surrounds it. And thirdly, a starting assumption is verified by the report's mapping: there is more to be done, more ecosystem development is needed to enable inclusive business to thrive.
So while the report presents a good selection of case studies of inclusive business, it also goes well beyond that to explore the ecosystem. Having worked in conservation in the nineties, I still struggle with using the term ecosystem in the inclusive business context. But when Harvard, Monitor and UNDP have settled on a term, let's not resist.
What I do like is the clear depiction of the ecosystem in the UNDP report: four key elements are presented as a diamond covering information, investment, incentives and implementation support.
The report analyses the current situation under each component of the diamond.
In assessing information for inclusive business, it reinforces what our BIF and IAP clients tell us: there is a lack of market information about the Base of the Pyramid. But it's interesting to see it highlighting the growing role of local business schools in developing courses that focus on business and innovation.
The chapter on incentives is a mixture of the very familiar - how the business environment constrains opportunity - and the original- how public policy can remove barriers, empower participation of low-income people or create rewards for companies that invest in inclusive business. It also looks at how incentives are created by private players, particularly through standards, certification and internal company codes of conduct.
The chapters on investment and implementation support eek out useful positive examples of how these work well, along with a longer list of gaps that need addressing for inclusive business to thrive. It should be no surprise that it finds more support offered by donors and international actors, and relatively little so far of the embedded local business networks that are needed: market research, credit bureaus, incubators and venture capital firms. But even if not surprising, the implications for action are considerable.
A report that is over 100 pages sounds truly daunting. But it is easily structured for those that dip in, choc-a-bloc with graphs that summarise a sector, a continent, an initiative in one easy take, and with CEO interviews and case studies that bring the work alive. The authors (UNDP in collaboration with Endeva and Reciprocity) have done alot of work to simply bring together data that many of us had in different places and no one had collated, but which we can all use in different ways.
It is intended to be a call to action for stakeholders to do more to support inclusive business. Of course one long report does not catalyse change. But I do feel this is an important stake in the ground planted by UNDP for inclusive business in Africa.
1. I should declare an interest as a member of the Advisory Board for the report.
2. As the Practitioner Hub, BIF and IAP we gladly gave permission for our Database of Financial and Technical Support for Inclusive Business to be used by the authors.
3. A blog by Jurgen Nagler about the launch of this report in May in Cape Town and Addis is here
4. A post by Pascale Bonzom, explaining the role of UNDP's African Facility for Inclusive Markets is here.
5. View previous Editor's Choice (monthly since December 2010) here