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1
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
1
Inclusive Business eLab
Christina Tewes-GradlBoP Learning Lab Germany - Endeva
1
Module 1: Introduction to Inclusive Business Innovation
2
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
2
Introduction to the course
Introduction to inclusive business
Allianz: Innovating around microinsurance in India
Outlook
Agenda
3
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
3
Provide an overview of relevant themes and literature
Give practical advice based on cutting-edge research
Introduce BoP experts
Learn from leading companies
Support the development of an own business idea
Objectives and approaches
Background readings
Online teaching modules
Instructors from BoP Learning Labs and WBCSD
Company experts
Assessment, networking, and coaching option
4
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
4Structure of the course
1. Introduction to inclusive business
2. Market understanding and marketing
3. Last mile distribution
4. Financing
5. Partnering
6. Results measurement
6 modules on critical topics
1. Pre-reading
2. Online session (Mondays @ 4pm CET)
2 elements per module
5
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
5Q & A
???
6
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
6
Introduction to the course
Introduction to inclusive business
Allianz: Innovating around microinsurance in India
Outlook
Agenda
7
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
7 7Background Readings Module 1
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany –Endeva
8
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
8Starting point: A change in perspective
... from patients ... to agents ... with potential
People in poverty look for and
offer opportunities to participate
in value chains as• consumers• producers• employees• entrepreneurs
9
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
9A global opportunity
Global Income Pyramid Population growth
Source: Endeva (2010) Inclusive Business Guide
10
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
10A US$5 trillion market
Source: IFC (2013) Global Consumption Data for Inclusive Business; WRI/IFC (2007) The Next 4 Billion
BoP market profile Consumer spending by sector
• BOP = 4.5 billion people earning less than $9 per day
• They spend $5 trillion annually
• 3 billion people spending less than $3 a day
• 2.8 billion live in rural areas
• 61% are under age 30
11
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
11Creating value for all
Value for business• Winning new customers• Expanding the workforce• Strengthening supply and delivery
chains• Creating innovations
Value for people living in poverty• Increasing incomes• Meeting needs• Increasing productivity
DefinitionInclusive business models include the poor on the demand side as clients and customers, and on the supply side as employees, producers and business owners at various points in the value chain. They build bridges between business and the poor for mutual benefit.
Source: UNDP (2008) Creating Value for All
12
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
12
12
One approach – many names
Inclusive BusinessSocial Business
Producers Consumers
Pri
vate
Sec
tor
Pu
bli
c S
ecto
r
Use
d m
ore
by p
eopl
e fr
om t
he:
Stresses the inclusion of poor people as:
Base of the Pyramid / Bottom of the Pyramid / BOP
Opportunities for the Majority
Pro-poor Value Chain Development
Making markets work for the Poor /M4P
Business LinkagesFull Economic Citizenship
Responsible Supply Chain Management
Sou
rce:
End
eva
(201
0) In
clus
ive
Bus
ines
s G
uide
13
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
13A clear value proposition is central
Value Proposition
Customers
Employees
Owners
Partners
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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
14Massive value creation opportunities
No access Poverty penalty
• No sanitation: 2,6 bln people• No electricity: 1,6 bln people• No internet: 5,4 bln people
• Higher cost: e.g., electricity in rural Bangladesh costs 1.60EUR/kwh
• More effort: e.g. avg 2h/day to fetch water in communities South Africa
• Poor quality: e.g., doctors in rural areas are only available half the time in India
Value creation opportunity through new business models
15
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
15Mixed business cases are common
Cost
Profit
Mainstream Investment
Cost
AddedValue
Inclusive Business
• Make profits• Build new markets• Create brand awareness• Acquire new innovation processes• Obtain a license to operate• Manage relationship with
governments• Engage, train and retain employees• Develop young leaders
Source: Stefan Koch
What are the benefits of your business idea?
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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
16Catering to low-income consumers across sectors
ICT
Mobile money
Insurance
Micro-insurance
Health care
Pharmacy franchises
Energy
Solar home systems
17
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
17Buying from low-income suppliers
Agriculture
Usually, low-income people also get
involved as employees and entrepreneurs.
Manufacturing / Crafts Tourism ICT
Smallholder sourcing
Handicrafts Community-based tourism
Business process outsourcing
18
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
18Challenges stand in the way
• Little granular data about low-income markets• Few market research and consulting services
• Necessary regulation is missing• Red tape, administrative burden, corruption
• Roads are poor, few logistics services and distribution network
• Energy, water and ICT networks are poor
• Limited training and education of the target group• Limited access to information
• Credit, insurance, and banking are mostly unavailable
• People live in a cash economy
Source: UNDP (2008) Creating Value for All – Strategies for Doing Business with the Poor
Which of these constraits are
most relevant for you?
19
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
19Innovative business models are required
Solutions
Sou
rce:
UN
DP
(20
08)
Cre
atin
g V
alue
for
All
– S
trat
egie
s fo
r D
oing
Bus
ines
s w
ith th
e P
oor
20
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
20Q & A
???
21
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
21
Introduction to the course
Introduction to Inclusive business
Allianz: Innovating around Microinsurance in India
Outlook
Agenda
22
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
22Michael Anthony, Allianz Re
Michael Anthony is a business development expert in emerging markets and was instrumental in building the almost 20-million people microinsurance portfolio of Allianz Group in several markets in Africa and Asia.
He now works with Allianz Reinsurance in Zurich to develop crop insurance markets in developing countries and is being trained as an agricultural reinsurance underwriter. One of his assignments is the project leadership of RIICE, a public-private partnership to use remote sensing technology in the development of crop insurance.
Questions•Which difficulties did you encounter when entering the low-income market in India?•Which role did CARE International play in developing your microinsurance business model?•How did you manage to integrate the resulting business model into Bajaj-Allianz’ mainstream business?
???
23
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
23
Introduction to the course
Introduction to Inclusive business
Allianz: Innovating around Microinsurance in India
Outlook
Agenda
24
Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva
24Next session: Market understanding and marketing
Online module: Monday, June 2nd
4 pm CET
http://www.endeva.org/applying/current_projects/building_electricity_kiosks_in_madagascar/
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