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1 Module 1: Introduction to Inclusive Business Innovation BoP Learning Lab Germany – Endeva 1 Inclusive Business eLab Christina Tewes-Gradl BoP Learning Lab Germany - Endeva 1 Module 1: Introduction to Inclusive Business Innovation

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Page 1: Online course 2 module 1 20140525 Endeva

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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

Page 2: Online course 2 module 1 20140525 Endeva

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

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Introduction to the course

Introduction to inclusive business

Allianz: Innovating around microinsurance in India

Outlook

Agenda

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

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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

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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

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

5Q & A

???

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

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Introduction to the course

Introduction to inclusive business

Allianz: Innovating around microinsurance in India

Outlook

Agenda

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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

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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

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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

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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

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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

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

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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

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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

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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

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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

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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?

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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

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

20Q & A

???

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

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Introduction to the course

Introduction to Inclusive business

Allianz: Innovating around Microinsurance in India

Outlook

Agenda

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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?

???

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Module 1: Introduction to Inclusive Business InnovationBoP Learning Lab Germany – Endeva

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Introduction to the course

Introduction to Inclusive business

Allianz: Innovating around Microinsurance in India

Outlook

Agenda

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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/