An inclusive business model is a business model designed to generate ordinary commercial value for a company while deliberately integrating low-income populations into its operations, either on the demand side as clients and consumers or on the supply side as producers, entrepreneurs or employees, in a way meant to be sustainable rather than a one-off gesture. The approach can be adopted by organizations of very different kinds, from multinational corporations and domestic companies to cooperatives, small and medium-sized enterprises, and nonprofits that apply ordinary business methods to their work. What distinguishes an inclusive business model from corporate philanthropy or corporate social responsibility is that social value creation is built into how the model captures value in the first place, rather than being funded separately out of profits earned elsewhere; on this view, an organization only qualifies as genuinely practicing inclusive business if it succeeds in creating that intended value for the low-income populations it engages, without causing them harm in the process.
Facts
Core MechanismAn inclusive business model works by deliberately integrating low-income people into the company's own value chain, as producers, suppliers, distributors, retailers or customers, rather than by donating to or subsidizing them from outside it. The business prioritizes creating real value for those participants over maximizing how much of that value it captures for itself, and follows a rule of non-discrimination in how it deals with them; this is what distinguishes it from a social enterprise that designs a separate product or service specifically for low-income populations rather than integrating them into an existing commercial operation. 1 Connections
Associated With
Inclusive business models deliberately integrate low-income populations into a company value chain as suppliers, distributors or customers, a design goal closely tied to social entrepreneurship practice.
Open Questions
Source Wikipedia, Inclusive business
Sources
1. Wikipedia, Inclusive business
WikipediaLead section, second sentenceQuote, Lead section, second sentence
By prioritising value creation over value capture and adopting principles of non-discrimination, inclusive businesses create new economic opportunities for low-income populations but do not necessarily pursue profit maximisation objectives.
Open Questions (1 open question)
What year, decade or founding publication marks the origin of the inclusive business model as a named concept?
The cited Wikipedia article on inclusive business fully describes the mechanism (value creation over value capture, non-discrimination, integrating low-income populations into the value chain) but names no year, decade, report or publication anywhere in its text for when the concept was first defined or popularized.
What would resolve this A citable source, such as a dated development-economics or business-strategy text or report (for example a UNDP or World Business Council for Sustainable Development base-of-the-pyramid publication), naming the year or publication that first defined or popularized the inclusive business model as a named concept.
business historyWikipedia, Inclusive business
Reader Challenges (0)
No disputes yet. Spotted an error or a better source? Open the first one.
Sign in to dispute this or suggest a correction.