INCLUSIVE BUSINESS

DeLab
Why and how to promote inclusive business
through public policy interventions
At the initial stages of the inclusive business approach,
the role of governments and public policies was vastly
overlooked. The inclusive business approach was
seen as an alternative to the approach to development
based on public policies and international cooperation,
and reflections on the topic focused mainly on business
strategy issues. However, the experience showed that in
successful cases of inclusive business, virtuous public
policies did play an important role (Tewes-Gradl, Peters
et al., 2013).
The need for public policies for inclusive business is
two-fold. On the one hand, doing business in low-income
communities is challenging, for a number of reasons
that have been recalled in the previous chapter and that
found confirmation in the G20 survey. On the other hand,
positive externalities produced by inclusive businesses,
such as the social benefits associated with the inclusion
of poor people in the socio-economic system, cannot be
“appropriated” (through higher prices) by the companies
that invest in these businesses, and belong to a domain
that is closer to the field of “public goods” and “development
goals”.
At the same time, many of the barriers to inclusive business
are policy-related and can therefore be eased or
resolved by government action. In fact, as the Development
Working Group of G20 (2013) underlines, government
action can help to create the general conditions
(infrastructures, legal frameworks) needed for markets to
Source table: “Policy Note on Inclusive Business Policies”, Development Working
Group of the G20 (2013)
40