In the bustling cities and remote villages of my hometown, Coimbatore, India, I began a journey I never anticipated would shape my future profoundly. It started with a simple idea: empowering women through tailoring, sparked by an encounter during my fellowship in Arani, a small town in Tamil Nadu. There, I met Mini Chechi (fondly called elder sister in Malayalam), a determined woman with dreams of bettering her family’s future. Chechi had stitched my blouse entirely by hand, and during our conversation, she shared that she didn’t own a sewing machine and was painstakingly saving up to buy one. With a machine, she believed she could work more efficiently and improve the stitching, ultimately allowing her to save money for her daughter’s school. Chechi’s natural talent for stitching was evident, but she lacked the resources and training to turn her skill into a sustainable livelihood. Inspired by her story after my fellowship, my mother and I started a platform within our boutique to provide the tools, training, and support for women like Chechi to start their own tailoring units.
Our approach was simple: offer comprehensive training in tailoring and business management, provide access to sewing machines and materials, and create a supportive community where women could share their challenges and successes. We expanded to include men who came from other small cities looking for work into our training programs. The pride in their eyes and the confidence in their strides were the true measures of our success, and this shined through in the lives of those who took part. Shanthi Akka (elder sister in Tamil) saved up enough money through the program for her daughter’s marriage and to support her during pregnancy. Another woman, Jyoti akka, was able to fund her daughter’s tuition, while others like Rajendran were empowered to cover their wedding expenses or a new bike. They provided for their families and continued to lead their lives with newfound stability and success.
Armed with these first-hand experiences, my journey as a research intern at Endeva in Berlin has allowed me to delve even deeper into inclusive business strategies and their impacts at a global level.
During my time at Endeva, I worked on the report ‘The Inclusive Business Case for Firms,’ (forthcoming) authored for the United Nations Economic and Social Commission for Asia and the Pacific. The report highlights how inclusive business models can generate financial returns, strengthen supply chains, drive innovation, and create meaningful social impact by integrating low-income communities into business value chains. These chapters resonate deeply with my experiences and reinforce the broader narrative of how inclusive business can drive sustainable development.
Why Inclusive business works
Building New Markets
As of 2023, more than 23% of the world’s population lives on less than USD 3.65 per day, representing over 1.8 billion people living in poverty worldwide.[1] This segment of the population forms the “base of the economic pyramid,” which represents an under-appreciated market for many businesses, and serves as the key beneficiary for inclusive businesses. Our tailoring initiative opened new economic opportunities for women by enabling them to start home-based tailoring businesses, offering tailoring services to local markets and customers through producing and altering garments for sale. In this way, our inclusive business offered solutions tailored to the needs and realities of low-income communities, unlocking the potential for growth and development.
Strengthening Supply Chains
Global supply chains face increasing disruptions due to geopolitical tensions and climate change. Inclusive business models mitigate these risks by localizing and diversifying supply chains. Jayanti Herbs, for instance, works directly with small-scale farmers to procure sustainable spices, ensuring a more resilient and ethically sound supply chain. This approach not only safeguards against supply shocks and market volatility but also enhances product quality and aligns with growing consumer demand for ethically sourced products.
Driving Innovation
Engaging with low-income markets necessitates innovative solutions tailored to unique challenges such as limited infrastructure and financial constraints. Similarly, inclusive businesses often pioneer new technologies and business models that address the specific needs of underserved markets, driving broader industry innovation. For example, the report highlights SOLshare in Bangladesh, which connects household solar systems to mini-grids. This innovative approach enables more reliable access to energy and income from excess energy production and showcases how inclusive business can drive broader industry innovation.
Demonstrating Company Purpose
Today, consumers and employees increasingly value corporate responsibility, inclusive business models help firms clearly articulate and enhance their purpose. Companies that engage in inclusive practices often see increased employee motivation, customer loyalty, and brand reputation. B2R (Business-To-Rural) Ltd, a rural BPO in Uttarakhand, India, exemplifies this by delivering BPO services while creating jobs for rural youth. With 6 centers and over 40 clients, including global publishing houses and accounting firms, B2R creates economic opportunities in a region where 11% of the population lives below the poverty line. This commitment to ethical practices and community development aligns with consumer expectations and drives long-term business success.[2]
Generating Returns
Contrary to the perception that inclusive business sacrifices profitability for social good, evidence shows that these models can be both impactful and profitable. Inclusive businesses often achieve significant scale by leveraging local networks and technologies. For example, Sid’s Farm supplies high-quality milk to consumers in Hyderabad and Bangalore by sourcing from over 1,000 small dairy farmers, most of whom are women. Partnering with banks for credit, they aim to increase milk productivity by 20% annually. Sid’s Farm targets a 10% net profit margin and achieves a 30% premium sales price.[3]
How Inclusive Businesses Succeed: Navigating Challenges with Strategic Approaches
Venturing into low-income markets offers great benefits, but these environments are not free of challenges. Firms often face limited market information, inadequate infrastructure, lack of financial services, and regulatory hurdles. Fortunately, there are numerous resources to support new ventures. Businesses can leverage these resources to gain expertise, establish a local presence, and access essential tools which help save time, cut costs, and reduce risks. The report identifies key strategies to firms pursuing inclusive business models to succeed, including:
- Leveraging Know-How: Understanding low-income markets requires specific insights and participatory methods. Firms can benefit from existing knowledge resources, such as InclusiveBusiness.net and Business Call to Action, which provide valuable data and case studies on inclusive business practices. Engaging directly with target communities through anthropological approaches and partnerships can also yield critical market insights.
- Accessing Finance: Financing inclusive ventures can be challenging due to perceived risks and market unfamiliarity. However, specialized impact investors and grants from foundations offer critical support. For example, Schneider Electric’s Energy Access Ventures fund provides equity investments to startups focused on clean energy in developing regions, illustrating how targeted financing can drive inclusive business growth.
- Utilizing Infrastructure and Technology: Technology bridges the gap where traditional infrastructure falls short. Mobile technology, off-grid energy solutions, and digital platforms enable businesses to reach low-income markets efficiently. Viamo, a digital technology enterprise, uses mobile-based services to connect millions of users in underserved areas with essential information and services, demonstrating the power of tech-driven inclusivity.
- Forming Complementary Partnerships: Partnerships with local organizations, civil society groups, and government agencies can provide the local footprint and knowledge essential for success in low-income markets. Collaborations with entities like microfinance institutions and community organizations enhance market access and operational sustainability, as seen with initiatives like Live Well in Zambia.
- Engaging Government Support: Governments play a crucial role in supporting inclusive business through regulatory frameworks and financial incentives. Businesses that align their goals with public development objectives can benefit from policy support and collaboration, facilitating scale and impact.
Moving Forward: Building Inclusive Business Models, Practice and Policy
As I reflect on my journey from inclusive business to public policy, I am more committed than ever to bridging the gap between grassroots initiatives and systemic change. These experiences have shown me that inclusive business models can transform lives, but they need supportive policies to thrive. Low-income markets present great opportunities that require strategic planning. Businesses must identify areas where their expertise can address unmet needs and integrate low-income communities into their value chains. This typically involves some combination of offering affordable products and services, promoting innovation through low-tech solutions and new business models, partnering with local organizations and financial institutions, and other innovative strategies. Comprehensive market research and creative engagement methods are essential to understanding and connecting with the base of the pyramid. By tackling these challenges and utilizing available resources, companies can develop sustainable and profitable inclusive business models that deliver both social impact and economic growth. Through this blog, I hope to inspire others to explore the power of inclusive business and public policy in creating positive social impact. By sharing my journey, I want to highlight the importance of integrating practical experience with policy advocacy to drive sustainable development and economic empowerment.
*Sabari Swetha Covaiselvan is an owner of a boutique sewing business together with her mother in Tamil Nadu since 2015. They employ over 10 people and provide them with the support they need to upskill and generate a higher income. While working toward her Master of Public Policy at the Hertie School, she was an intern at Endeva and worked on reports aiming to promote inclusive businesses across Asia and Asia Pacific. To learn more about how Endeva supports inclusive businesses and the UN ESCAP project, you can reach out to Christina Tewes-Gradl at c.gradl@endeva.org.
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[1] EU-ASEAN Business Council. (2023). Towards Achieving UN SDGs in ASEAN – The Role of Agriculture. https://www.eu-asean.eu/wp-content/uploads/2023/11/2024-Report-Towards-Achieving-UN-SDGs-in-ASEAN_The-Role-of-Agriculture.pdf
[2] B2R Technologies Pvt. Ltd. (2022, December 10). B2R Technologies Pvt. Ltd. B2R Technologies Pvt. Ltd. | Rural BPO. https://b2r.in/
[3] Interview with Kishore Indukuri, CEO and Divyadeep Lolla, Director of Operations, Sid’s Farm. March 2024 for The Inclusive Business Case for Firms, UN ESCAP (forthcoming)
Photo credit: Shobana Covaiselvan, Swethaz Boutique
Author: Swetha Covaiselvan