Asia's private sector is increasingly realizing that the base of the income pyramid, i.e. those living below the $3-$4 poverty line, represents a substantial new market for goods and services, which in turn can improve the livelihoods of the poor and vulnerable. This segment of the population also doubles as a significant pool of entrepreneurship, assets, talent, and productivity that can be leveraged for the supply of critical inputs, innovative distribution systems, and skilled labor.
What is inclusive business?
ADB defines Inclusive Business (IB) as a business entity that generates high development impact by (i) improving access to goods and services for the base-of-the-pyramid population (i.e., low-income people); and/or (ii) providing income and/or employment opportunities to low-income people as producers, suppliers, distributors, employers, and/or employees. An inclusive business must be commercially viable, it must meet nonsovereign operation standards of viability. (Source: Standard Explanatory Data Indicator Definitions May 2017)
ADB's inclusive business initiative
ADB has embarked on an inclusive business initiative that supports inclusive business in Asia and the Pacific through technical assistance projects:
- Promoting Inclusive Growth through Business Development at the Base of the Pyramid
This technical assistance aimed to develop inclusive business ventures in Bangladesh, Cambodia, India, Indonesia, Lao PDR, Myanmar, Pakistan, the Philippines, Sri Lanka, Thailand, and Viet Nam. It also did preparatory work for setting up two sub-regional equity and debt funds for Inclusive Business in Southeast Asia and in South Asia.
- Inclusive Business Support
This project was designed to facilitate the financing of inclusive business projects supported by ADB, and promote policy work with selected governments as well as knowledge exchange on inclusive business.
Since ADB started its inclusive business initiative, the number of its investments in inclusive companies increased. In 2013, 5 out of the 16 approved private sector projects qualify as inclusive business, up from 4% between 2000 and 2012.