The concept of inclusive business maturity seeks to help companies understand the state of existing inclusive business efforts in order to be able to more accurately recommend next steps towards the goal of having a commercially viable inclusive business poised for growth. Inclusive business maturity is independent of sector, company size, or even country of operation. Rather, inclusive business maturity is dictated by how the inclusive business is financed; what the financial expectations of it are; how it is positioned within a company’s strategy; and the amount of impact it is able to have.
Six Maturity Levels
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The Bystander
Non-existent Inclusive Business
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The Accidental Tourist
Partial or Unintentional Inclusive Business
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The Responsible Citizen
Corporate Responsibility with the BOP
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The Explorer
Exploratory Inclusive Business
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The Builder
Established Inclusive Business
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The Champion
Inclusive Business poised for Growth
The Bystander
Non-existent Inclusive Business
“The Bystander” or Non-existent Inclusive Business: Simply put, a company does not have an inclusive business presence if it fails to engage with the BOP in an economically productive way. Lack of leadership intent to pursue inclusive business often stems from the belief that inclusive business is not the right strategy for the company, that IB requires dealing with too much regulation, that the investment does not have the desired ROI, or that the company culture is not one in which IB would be embraced. Many of these beliefs, however, can be altered if the company has a better understanding of IB itself and the business opportunity it presents.
The Accidental Tourist
Partial or Unintentional Inclusive Business
“The Accidental Tourist” or Partial or Unintentional Inclusive Business: Some companies engage with the BOP by nature of where they are, but fail to realize that what they are doing is a form of inclusive business. In failing to realize this, the company may miss out on additional commercial benefits of IB (e.g., improved competitive position, enhanced corporate reputation, government incentive qualification) and additional opportunities for impact (e.g., engaging the BOP in another area of the value chain).
The Responsible Citizen
Corporate Responsibility with the BOP
“The Responsible Citizen” or Corporate Responsibility with the BOP: Many companies engage with the BOP through corporate responsibility efforts, or by depending on development or government aid. Advantages of the CSR model include that the company can have a valuable social impact, learn how to operate in new markets, and reap reputational benefits. The disadvantages of operating at this level of IB maturity is that the lack of commercial viability hurts the IB model long term: commercial benefits are limited; the ability to replicate or scale the model is stunted; and worst of all the program may be cut all together in an economic downturn if CSR or development funds are no longer available.
The Explorer
Exploratory Inclusive Business
“The Explorer” or Exploratory Inclusive Business: A company that is piloting a program with the intention that it be commercially viable long term is in the “exploratory” maturity phase of inclusive business. While the inclusive business itself may be immature, the company understands the business opportunity behind IB and the IB model is supported by company leadership.
The Builder
Established Inclusive Business
“The Builder” or Established Inclusive Business: A company with an IB model that is core to the business, sustainable long-term and generating market returns is considered having an established inclusive business. At this level of IB maturity, the BOP is likely engaged in multiple areas of the value chain, the inclusive business largely eliminates negative externalities of doing business in the market in question, and the company has likely begun to measure social impact. However, the inclusive business has not yet been brought to scale, likely either because the model is highly dependent on regional attributes (e.g., needs of local population, existing infrastructure, government incentives) or because of time horizon (e.g., it has not had time to be replicated or piloted elsewhere yet).
The Champion
Inclusive Business poised for Growth
“The Champion” or Inclusive Business poised for Growth: Companies with an inclusive business poised for growth are commercially viable and on a clear pathway to achieving scale. In this case, inclusive business is well-integrated into company culture and is a core part of the firm’s strategy in one or many lines of business. Companies with this level of IB maturity are often already communicating their social impact externally and are looking to enhance their reporting efforts as they continue to grow the inclusive business and seek to maximize both financial success and social impact.