Policy Note on the Business Environment for Inclusive Business Models
This policy note has two goals. First, to assess whether inclusive business models face specific regulatory hurdles. Second, to recommend policies that creates a business environment conducive to inclusive business. Little research has been conduct...
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| Language: | English en_US |
| Published: |
Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/895841468320669062/Policy-note-on-the-business-environment-for-inclusive-business-models http://hdl.handle.net/10986/27232 |
| Summary: | This policy note has two goals. First,
to assess whether inclusive business models face specific
regulatory hurdles. Second, to recommend policies that
creates a business environment conducive to inclusive
business. Little research has been conducted on the first
goal. This note analyzes survey answers from companies that
applied to the G20 Challenge. These companies were asked to
rank regulatory obstacles and explain whether these
obstacles created significant hurdles to their ability to
serve the base of the pyramid. On the second goal, this note
highlights policy recommendations for governments,
development finance institutions and donors. It also
includes policy measures specific to countries and contexts.
Some policy measures address regulatory hurdles for
inclusive business models. Others support inclusive business
models by providing incentives when needed. The first
section analyzes survey answers from the 167 applicants for
the G20 Challenge. The starting point was to listen to
businesses a logical place to begin when seeking to improve
the business environment. The second section describes
policy measures for business models that include the base of
the pyramid as producers or suppliers, focusing on
agriculture. Businesses that source from small farmers have
inclusive business models because they integrate farmers in
their value chains. Small farmers are often considered base
of the pyramid if their income is low or they lack basic
goods or services. The third section describes policy
measures for business models that include the base of the
pyramid as customers particularly models that provide
affordable housing, health, education and basic financial
services. In many countries basic services are still mainly
provided by the public sector or recently privatized
companies and more stringent regulations often apply. This
section describes regulations and policies that affect
inclusive business models in these sectors. The fourth
section describes roles for governments, development finance
institutions and donors in supporting inclusive business
models. The business environment is important because
companies that do business with the base of the pyramid need
to understand new markets, understand the market behavior of
base of the pyramid customers, appraise new risks and
develop new systems, business processes and training.
Companies with inclusive business models also face
perceptions from investors and lending institutions that the
base of the pyramid is riskier than other markets. |
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