An inclusive business is a self-sustaining business that productively includes low-income communities in its value chain. It is also known as inclusive entrepreneurship or inclusive innovation, and it refers to business strategies that purposefully attempt to assist low-income or marginalized populations by integrating them into the value chain as suppliers, distributors, employees, or consumers. The goal is to provide both social and economic benefits while addressing issues of poverty, inequality, and exclusion.
Inclusionary firms generate new economic opportunities for low-income communities while not necessarily pursuing profit maximization aims by prioritizing value creation above value capture and adhering to nondiscrimination principles. Inclusive businesses engage, assist, and create tangible value for low-income producers, suppliers, retailers, and/or service providers using an inclusive business strategy, and intentionally avoid destroying value “along the path to value creation.”
Key features of inclusive business include:
- Integration of Marginalized Stakeholders: Individuals or communities who are frequently excluded from economic opportunities are actively involved in inclusive enterprises. Smallholder farmers, women, individuals with disabilities, and others living in low-income areas may be included.
- Sustainable Development: The goal of inclusive business is to improve the economic prospects of excluded populations in a way that benefits both the firm and the community in the long run.
- Value Chain Integration: In most cases, inclusive enterprises include marginalized stakeholders at various stages of the value chain. A corporation, for example, may cooperate directly with small-scale farmers as suppliers or hire people from underprivileged backgrounds.
- Access to Markets: Inclusive business models often strive to provide access to markets for producers who may face barriers in reaching consumers. This can involve creating distribution channels or connecting small-scale producers to larger markets.
- Affordability and Accessibility: Inclusive businesses often focus on providing affordable products and services to low-income consumers. This can involve innovations in product design, distribution, and pricing strategies.
By emphasizing productive integration, inclusive firms distinguish themselves from social businesses that offer goods and services for low-income groups. Microfinance institutions, corporations that obtain products from smallholder farmers, and businesses that employ marginalized communities are examples of inclusive business models.
Inclusive business is consistent with the concepts of Corporate Social Responsibility (CSR) and sustainable development, emphasizing the role of businesses in addressing social and environmental issues while being economically viable. The strategy acknowledges that businesses can be significant drivers of positive change and poverty alleviation.
