201411.10

Four ways to build an ecosystem to support business in low-income markets

There is exciting work happening as the global development community prepares to take on what is now known as the post-2015 Development Agenda. This new framework will require some creative thinking about how to engage the private sector, and how to utilise the emerging evidence that more inclusive business models – ie those that engage poor people – can spur economic development for those who need it most.

With recent evidence suggesting that inclusive business models can provide strong benefits to those living at the base of the economic pyramid (BoP), it seems shortsighted not to fully examine how to support them. But why are so few inclusive businesses reaching scale? For many practitioners in both the public and private sectors, the answer lies in the supportive environment that develops through what has become known as an ecosystem.

The Philippines has been at the forefront of supporting innovation ecosystems for inclusive business. With the understanding that inclusive business models can engage people at the BoP as consumers, producers and entrepreneurs, the Philippines has emerged as a prime example of how the private sector can support inclusive growth. To capture the benefits of inclusive business, government agencies, entrepreneurs and companies are looking for new ways to mobilise stakeholders through inclusive business ecosystems. These communities of practice support inclusive business and shared value while reducing poverty and spurring inclusive growth.

At the heart of this support is the “ecosystem diamond” – concrete practices that governments and national policymakers should engage in to generate pro-poor development. The Philippines has proven itself an excellent example of a nation’s capacity to overcome market constraints and support ecosystem development – a model that could easily be replicated in other countries.