Learnings for donors from the BIF pilot
Pilot projects are done to learn. So over the four year pilot of a donor approach to supporting inclusive business with technical assistance, what was learnt?
The short answer is, a lot. The Business Innovation Facility pilot (2010-end 2013) generated a host of lessons about the value of donor-funded technical support to inclusive business, and the value of inclusive business progression to donor objectives. The results are written up in ‘Adding Value to Innovation? Lessons on donor support to inclusive ....
The top 5 findings for donors are:
1. Technical assistance can help inclusive businesses to develop faster and/or build more robust business models
The vast majority of companies are positive about the value added by technical assistance from BIF, and 50 per cent report that their business development is bigger, better or faster due to BIF support.
If donors are willing to take risks, technical support can have strong returns, though it must be carefully packaged and tailored. It can be as useful to large established companies as start-ups, particularly in early stages of inclusive business ventures.
2. Inclusive business can have significant social impact - directly on lives of people at the BoP and catalyzing wider market change
Our ‘best-guess’ estimate is that the overall portfolio will reach 3.7 million households within five years of the start of BIF support. The vast majority will be reached as consumers. These estimates are revised down (for realism, based on business progress) from several millions estimated by companies.
People at the BoP reached by inclusive business in the BIF portfolio include those living on under and over $2 per person per day.
Companies are enabling other firms to engage efficiently with BOP producers or consumers up and down the same value chain, or imitating similar innovation developed in other markets.
3. Knowledge exchange can be efficiently incorporated into a technical assistance programme
Technical support combines well with a mandate to generate and exchange knowledge. It is precisely because BIF provides business consultancy on the ‘nuts and bolts’ of business model development that it is well positioned to draw out findings and use these to support practitioners who are working on inclusive business. Knowledge exchange has reached another 85,000 practitioners globally, with feedback that suggests eagerness to learn about and use the models of others.
4. Technical assistance and programme management needs to be differentiated, well designed and targeted
There is no ‘one size fits all’ technical assistance (TA) package. Companies benefit the most from flexible assistance that is tailor-made for them. TA can be highly valuable but it cannot solve all the challenges that inclusive businesses face. Sourcing and scoping the TA input is a substantial part of programme management.
5. Estimating results of support to inclusive business is useful but a challenge
Skills of companies and needs of donors for reporting differ. The attribution of TA is hard to assess and a 3.5 year timescale is too short to properly assess results. Using current data, we have made various estimates:
- By Year 4/5, the portfolio could reach 3.6 million BOP households, of which 1.5 million could be plausibly linked to BIF input (allowing for variable success). On this basis, BIF spend per BOP household reached with BIF support would be around $4 by Year 5.
- In addition to direct BOP reach, businesses can catalyse wider change which can ultimately be highly significant to people at the BoP.
- BIF spend per Hub visitor is under $3, BIF spend on all knowledge is around $10 per person reached.
Such early findings are useful for planning future support to inclusive business. More would need to be done to validate findings robustly and track how estimates turn into reality. But the clear indications are there: technical assistance is no panacea for all the challenges of inclusive business, but can make a real difference for a relatively small financial input. And inclusive business growth is no panacea for all the challenges of poverty, but can make a real difference to millions of lives over time.
Adding Value to Innovation? Lessons on donor support to inclusive b... explores the assumptions that underpin the BIF approach: that technical support and knowledge exchange can assist companies on their inclusive business journey, and that company progress can help deliver social goals at the Base of the Pyramid.
Findings from the BIF Pilot for entrepreneurs and other pracititoners of inclusive business interested in how the business models work are in 'The 4Ps of inclusive business: How perseverance, partnerships, pilo...'
More detail on performance of the portfolio is in the BIF Portfolio Review 2013
Details on the M&E system developed during the pilot can be found in this report