Professionalising Inclusive Business Development Services: Making a long-term vision match reality needs
At the start of my professional journey, I worked for many years in Micro, Small and Medium Enterprise (MSME) and related Business Development Services (BDS), development programs in various low-income countries. Some 20 years ago, there was hardly any talk of ‘Inclusive Business’ (IB). Only about 8 years later, I was first introduced to the concept. Various development policies were adjusted, putting increasing attention on private sector engagement as the way to combat global poverty. Many derivations to the concept of IB, popped up at the same time, causing me to often wonder how distinct Inclusive Business really was from regular MSME development? It took some time, before it became clear to me that the difference lies in three main areas:
- IB initiatives pro-actively seek to incorporate low-income population into the business operations and/or customer base
- The initiative is core to the business model, strategy and processes (rather than being an activity of corporate social responsibility)
- The business proposition is successful when it creates value for both company and the particular low-income segment it involves
IB System players
And something else happened. You could say that it is a common economic trend, that once a concept reaches some level of “adulthood”, new “markets” start to develop around it creating a whole new system. Clearly, this was also the case with IB. IB Knowledge markets, IB finance markets, IB product markets, IB service markets etc, created a whole new set of “IB system players”. In particular, for the mainstream business advisors a new niche market was born, which was first picked up by mostly large business development firms. The mainstream BDS providers in developing countries however, lagged behind in reaching out to this new IB service market.
Even though many of us still get into debates what it really means to “strengthening inclusiveness” in business models, we all seem to argue that it is very different from “business as usual” (as can be read in the recent blog by Mark Ingram). Maybe it’s due to its complexity and multiple interpretations around to the concept, we see that advisory services for Inclusive Business initiatives are not yet professionalized nor mainstreamed in practice. Yet the world is making a strong appeal to the private sector to reinvent itself and “go inclusive”.
We see that the increasing demand for specialised Inclusive Business services is not matched with the current offering of in-country BDS. This fact automatically causes problems for the other “IB system players”:
- Companies are in need of specialised IB advisory in-country, but are easily lost among the many offers without any reference for quality assurance.
- Donor agencies are puzzled on whom to partner with to build these specialised inclusive business development services as integrated parts of their private sector development programs.
- Development finance institutions and impact investors find it difficult to identify the right service providers to match technical assistance to inclusive businesses initiatives they intend to finance.
- ‘IB Knowledge brokers’ are looking for lessons learned, best practice and true evidence that can make the case for IB stronger
How can we solve this? As part of the Inclusive Business Accelerator (IBA) programme team I have been lobbying to make some steps towards professionalisation of the “IBDS” sector. Kickstarting a process where the occupation of being a business advisor in low income markets can transform itself into a true "IB advisory profession" with the highest integrity and competence towards “inclusivity”. Not something you do overnight. Such processes tend to involve establishing acceptable qualifications with aligned capacity development programs, a global professional body or association to oversee the professional conduct, and even a demarcation of the qualified from unqualified amateurs. Step by step...
One mechanism IBA is exploring with other global players, is the creation of global guidelines on IBDS. It would make it easier for impact investors, donors, corporates to find the right service providers. The ones that have a mutual understanding of IB processes, a common set of IB advisory skills and tools at hand, and show a proven track record in servicing IB. All areas where IB Accelerator is seen as a frontrunner hands-on initiative. The creation of such a global guideline however, is a truly social process, which requires being pushed by various global IB advocates. Only by broad acceptance and strong support it could work. Maybe we haven’t found that yet. Are we pushing in the wrong direction? What other mechanisms to professionalize this IBDS market should we explore?
This blog is part of the September 2016 series on Inclusive Business Development Services, in partnership with the Inclusive Business Accelerator. Don’t miss the whole series on support available to inclusive business from practitioners, donors and intermediaries including Afrilabs, DFID, Endeva, EY and many more…