Workshop on. How can inclusive business strategies contribute to inclusive development in Sub-Saharan Africa?

Transcription

1 Workshop on How can inclusive business strategies contribute to inclusive development in Sub-Saharan Africa? Rotterdam School of Management, Rotterdam, Netherlands, 26 June 2015 Contents 1. Brief round of introduction followed by overview of the program Update on activities since October : where are we now? a: national context of Kenya and its partnering space... Error! Bookmark not defined. 2b. Questionnaire results and discussion c. Impact measurement The way forward... 7 Annex 1: Survey results... 8 Participants: Rob van Tulder (PrC), Jeroen Frietman (PrC), Addisu Lashitew (PrC), Kristine van Tubergen (PrC), Joy Kiiru (ESAMI), Maryn Kleingeld (NABC), Thijs Rutgers (NABC), Anita Keij (Virunga), Huib-Jan de Ruiter (FMO), Soeren Brosch (RSM), Maurice Jansen (STC Group), Joris van Dijk (Dijkstaal), Jaap-Jan Verboom (ICCO), Eline Maris (SDV), Linda Hummel (AMREF Flying Doctors), Frans de Pater (African Wise), Tom Harmsen (CFIA), Leontine van Hooft (GreenDreamCompany), Leon van Rijckevorsel (GreenDreamCompany), Wouter van Tongeren (Cordaid) 1

2 1. Overview of the program The aim of the research meeting was to keep project partners posted on the recent developments. The Project Steering Committee (PSC) also communicated updates on the research framework, including discussing and validating potential research themes using the outcomes of the survey. In addition, new activities are discussed and updates on the African and Dutch consortia were shared. 2. Update on activities since October: where are we now? What has happened since October last year? As communicated in an earlier report, the research team led by Prof. Rob van Tulder of the RSM held a project kick off workshop on the 20 th and 21 st March 2015 in Arusha, Tanzania. Like the Dutch Kick off meeting that took place in October 2014 in Rotterdam, this meeting introduced the research framework and other practical details to participating organizations in Africa. In the meantime, the PSC has been extending the research consortium in original five countries in East Africa, as well as in the newly added country of Tanzania. In the meantime, surveys are being filled in by the African partners. The figure below gives an overview which sectors of which countries are represented in the consortium. 2

3 From January 2015 until today we have been and still are working on step 1 to 3, partly due to a small delay in the composition of the Consortium. Next to the composition of the Consortium, the research team is studying different issues including; i) documenting national contexts; ii) analysing different success factors for inclusive business models and iii) identifying impact measurement indicators. 3. Discussions based on results from the survey In addition to discussions on the research framework and the importance of the macro-context in a sample country, Kenya, the meeting included presentations of the results from the survey. The purpose of this survey is setting the research agenda by identifying key research themes and issue priorities from the perspective of participating organizations. The overview of the results for issue prioritization can be found in annex 2. Other interesting findings are summed up per question below (numbers in brackets indicate number of survey responses): 3a. Setting the research agenda #1 What does inclusiveness mean for your organization? - 5 P s: People, Planet, Profit, Pleasure and Passion. - Small-holder empowerment. - Inclusive investment: provide people at the BoP access to products that improve their living standards. 3

4 - Advocating inclusiveness concepts among businesses - Focus on target groups that are difficult to reach out to and are not in scope of many other market parties. Regarding the changing concept of inclusiveness: ICCO f.e. thought it was about poor as consumers but in the current thinking they are also seen as producers. This was an eye opener for some of the participants. #2 How high is inclusiveness on your policy priority? - Inclusiveness scores between 6 and 10 on the scope of #3-5 What challenges do you face in becoming inclusive? - Finance (4) - Upscaling (3) - Concept is unknown among stakeholders (top management) (2) - Strategic thinking (2) - Lack of strategic commitment (4) - Lack of direct relationship with business model (1) - Geographic distance between core activity and BoP (1) The question has been raised what lack of strategic commitment entails. It means the inability to include and formulate strategic commitment. # 8-9 What topics or best practices do you recommend for our studies? - Scaling (3) - Sustainability (3) - Partnerships (2) - Funding for inclusive business (2) - Monitoring and evaluation of inclusive practice (2) - Motivations and processes of inclusiveness in a large business (2) - Mobile technology ecosystems (1) - Inclusiveness policymaking in developing countries (1) #4a What groups are relevant for your specific organization? - Ranking high: poor people in general, medium-sized enterprises, smaller enterprises and poor employees. - Ranking low: migrant workers, animals and environmentally vulnerable people. 4

5 STC expresses his amazement that children rank so low. NABC mentions that environmentally vulnerable people should rank first. RSM answers that human rights are less prioritised in the results which is an explanation for this biased result. Amref mentions that the question is not well-phrased. Does the question aim to know which of these marginalized groups are the partners target groups or which groups can enable local corporate development. #4b Which groups are relevant generally for development? - Ranking high: environmentally vulnerable people, medium-sized enterprises, small enterprises, illiterate people and women. - Ranking low: migrant workers and animals. #5 Which sectors are relevant for your organization s inclusiveness efforts and in general? - Ranking high: Access to financial services, income/productivity growth, community development, capacity building and access to energy. - Ranking low: Human rights protection, conflict resolution, generate funds for charitable giving. FMO notes that these results are biased, because the majority of the respondents are financial institutions and banks that focus on microfinance, SMEs and new initiatives. There is always a finance aspect attached to new development and initiatives after all. AfricanWise agrees and mentions that the main question is who is going to pay for inclusive business. Therefore, access to finance ranks first. Virunga Parks concludes that apparently inclusive business focuses on aid and investment and not on trade. ICCO also mentions that PPPs are necessary in order to achieve the high-ranking sectors in order to make inclusive business valuable. Many players are needed to achieve different variables and goals until you reach the common goal. Partnerships entail that all actors need to benefit from it and reinforce each other activities. FMO explains that inclusive business is their core business, although they are bound by governmental parameters. Regarding the finance aspect, STC adds that they are building training centres in Mozambique. Educational purposes facilitates funding as it is a public good. AfricanWise expresses its concerns that even when the institutional void creates business opportunities, banks do not want to take the risk and are therefore hesitant to finance innovative projects. RSM answers that PPPs can solve this issue, but that it is still a challenge as 5

6 you need to lend money first and you will be able to refund it afterwards. However, financing is all about mitigation of risks. FMO is also risk-averse. Cordaid asks if there is an exit and/or succession-strategy for the partnership. Deliverables need to be defined when to exit the partnership. Output and outcome can be defined relatively easily, since you need to formulate decent KPIs (key performance indicators). 2b. Impact measurement Inclusive business is synonymous to shared value creation for shareholders as well as for society at large. Seeing social problems as business opportunities, inclusive businesses aspire to maximize social impact. Firms also benefit from becoming inclusive, for example due to the first-mover advantage towards creating a shared-value mind set. Measuring social impact provides critical information that can yield substantia value. As the adage goes, What you measure is what you get. For example, impact information can be critical for acquiring finance from impact investors. Additionally, knowing how much impact is achieved is useful for management to properly weigh trade-offs while making decisions. Current reporting and ranking frameworks such as GRI, Dow Jones Sustainability Index and ISO focus on the triple bottom-line and more social effects respectively. The PSC is also familiar with WBCSD, UN Global Compact and BCIA indicators that will be taken into account. Since this research focuses mainly on social and economic effects, impact of inclusive business will be measured in terms of financial return and social return (internal/external and direct/indirect). For the research, existing indicators, like abovementioned, will also be used to measure impact. There are different levels of analysis for impact measurement that result in various information as depicted in the scheme above: On the individual level: change in mind-set. On the organizational level: business model and business model change and change in materiality (issue prioritization change in favour of inclusiveness) On the partnership level: configuration, issue-fit, outcome, dynamics, institutionalisation. On the country/issue level: effectiveness of inclusive business towards inclusive growth. The employee survey gives input on the individual level. Other surveys, workshops and executive trainings shall generate information on the organizational and partnership level. All 6

7 project partners have already submitted a first survey about the organisation/company s issue prioritization, current partnerships, (inclusive) business models et cetera. The first questionnaire that has been sent to the partners is a draft version that will be adjusted before being sent to all employees. The project partners have a couple of comments on the questionnaire: The questionnaire mainly focuses on social impact. What about environmental impact? Is cooperation with other stakeholders reflected in the questionnaire? Many questions end with such as poverty. Include explanation how the questionnaire fits in the research. What about the language? It might be useful for Dutch employees to fill a Dutch version. 4. The way forward In the upcoming months, case studies (preferable those of partners) will be analysed and discussed during the executive trainings. The executive trainings are planned on 15 th and 16 th of October in Africa and the 26 th of October in the Netherlands. In the meantime, the survey will be adjusted. 7

8 Annex 1: Survey results Which groups are relevant for your specific organization? Poor people in general Medium sized enterprises Smaller enterprises Poor (potential) employees Rural people/dwellers Women Illiterate people Children Sick/unhealthy people Conflict affected people Disabled people Indigenous peoples Religious minorities Ethnic minorities Environmentally vulnerable people Animals (biodiversity) Migrant workers

9 Which groups are relevant generally for development? Environmentally vulnerable people Medium sized enterprises Smaller enterprises Illiterate people Women Poor people in general Indigenous peoples Rural people/dwellers Sick/unhealthy people Conflict affected people Ethnic minorities Poor (potential) employees Children Disabled people Religious minorities Migrant workers Animals (biodiversity)

10 Which sectors are relevant for your organization s inclusiveness efforts? Income/productivity growth Community development Capacity building Access to energy Access to education Supporting small & medium sized firms Supporting micro & informal firms New enterprise development Equality and empowerment Access to financial services Food security Employment generation Agricultural productivity Access to information Access to clean water Health improvement Disease prevention and mitigation Generate funds for charitable giving Affordable housing Human rights protection or expansion Conflict resolution

11 Which sectors are relevant for inclusive development in general? Access to financial services New enterprise development Employment generation Capacity building Agricultural productivity Affordable housing Access to education Access to clean water Income/productivity growth Supporting small & medium sized firms Supporting micro & informal firms Food security Equality and empowerment Community development Access to information Access to energy Human rights protection or expansion Health improvement Conflict resolution Disease prevention and mitigation Generate funds for charitable giving