Inclusive business reimagined

What is inclusive business?

Over four billion people earn less than $8 a day, representing the base of the global income pyramid. “Inclusive” business models reach these previously economically marginalized populations and get them jobs, business opportunities, and services they need. Many multinational companies are now making long-term bets to expand into new global markets by finding profitable new ways to serve these unmet needs.

For example, they’re using new technologies and business models to serve the one billion people who lack access to energy, the four billion who have yet to be connected to the internet, the 1.5 billion who still lack a mobile phone or the two billion who don’t have a bank account. From microinsurance to mobile education and health platforms, to affordable housing, new ways to produce food, vehicle sharing platforms and low-carbon transport, hundreds of new products and services are now being developed specifically for these four billion people.

In addition to making a massive social impact, it’s estimated these kinds of opportunities are worth over $6 trillion to businesses in the next decade.

What’s this report about?

In this in-depth research report, Accenture, in partnership with the UK Department for International Development (DFID), explores “what’s new now” on this increasingly critical Board-level topic.

We look at more than 300 examples of inclusive business, categorize them into 60 types of models and map them across 13 industries to create the first global market landscape of its kind for this exciting space.

Based on this analysis and in-depth interviews with over 30 business founders, innovation leads, investors and donors, our key findings are that inclusive business is now:

1. Increasingly profitable as new digital platforms and ecosystem business models are maturing and combining, enabled by better identity, supply chain and payments infrastructure.
2. Growing faster as new companies, purpose-built to serve people on low incomes in the Global South are scaling up rapidly and driving a shift towards more “South to South” investment.
3. More mainstream as existing innovation and venturing capabilities are being leveraged to explore inclusive business more strategically and invest more systematically.

What are some of the examples we explore?

We refer to hundreds of examples within the full report, but the list below provides a flavor of these:

• Reliance Jio is an Indian mobile network, launched in late 2016. In the past three years, they acquired 330 million subscribers and became the third-largest global mobile network virtually overnight. The fastest network ramp-up in history turned India into the world’s largest data consumer in just six months. Within 15 months they had already reached profitability and are now preparing to bid on 5G and expand into phones and value-added services. It’s estimated the market entry of this one company will boost India’s overall GDP by over 5 percent.
• Transsion Holdings became the No. 1 mobile phone seller in Africa in 2018 with a nearly 50 percent market share and sales of over 125 million units worldwide. They are now dominating in Africa and India and diversifying into online media platforms. On September 30, 2019, they listed on China’s STAR exchange, rising 96 percent on their first day of trading and closing with a $6.5 billion valuation. At 42 times earnings, their proposed valuation was over double that of Apple when it listed, demonstrating the strength of investor appetite and their potential for continued rapid growth.
• Babylon Health is a UK-based start-up that connects doctors to patients and is developing AI to aid diagnosis. After registering 20–30 percent of adults in a trial in Rwanda in just two years, they won funding from the Health Ministry and Bill & Melinda Gates Foundation to roll out their service to the rest of Rwanda and to three more of the world’s least-developed countries as well. They’ve signed partnerships with one of the largest tech giants in China to roll out mobile health in China, and their last capital raise valued them at over $2 billion.
• Twiga Foods is a Kenyan start-up pitched as "the Future of B2B Retail in Africa.” Their platform cuts out the middlemen between farmers and retailers by owning warehouses and vehicles to handle transport and logistics. What’s more, they also gather data to credit score both the farmers and the retailers. Then they work with banks to get loans for the retailers and farmers, which in turn grows demand for their own services. They’ve developed a blockchain supply chain and are poised to expand from fresh fruit and vegetables into processed foods and household goods markets, as well as across countries.
• Gojek started in 2010 as an "Uber for Indonesia" with just 20 motorbike taxis. Today it has more than 25 million customers and two million drivers in over 50 cities all across Asia. It also provides more than transport and styles itself a ‘regional super app’ with 18 product lines. Because of its rapid growth and the rich data it gathers, it has attracted investment from American and Chinese tech giants. Its valuation sky-rocketed from $5 billion in 2018 to over $10 billion in 2019, making it one of Indonesia’s five “unicorn” companies and the first "decacorn" in this market.

What’s our perspective?

We see many under-appreciated opportunities emerging for business leaders here, but this isn’t just a simple story of innovation lifting people out of poverty.

Our report highlights the unintended consequences of innovation and growth. For example, economic growth can worsen the global climate crises. Innovative new business models can remove essential protections for workers. Rapid growth can compound inequality and inequitable distribution of resources. Technology can unleash unregulated digital harms. There is no guarantee that new lending practices will be responsible. But neither are these unintended consequences inevitable.

We call upon business leaders to infuse these new inclusive business models with a new ethos to avoid these negative consequences. Our report provides examples of how we are working on this with our own clients at our innovation centers to illustrate one possible approach for this, and we encourage others to build on this.

Asking the right questions early can lead, we believe, to many small decisions with big consequences that will ultimately lead to faster, more sustainable, and more responsible growth for everyone.

Where can I find out more?

This report is part of a series commissioned by DFID called Inclusive Business Boost. We encourage readers to explore the additional reports and blogs on this topic via their website.