Inclusive businesses across sectors—from agriculture to finance—are innovating to meet the needs of underserved populations and have reached millions of people. These businesses are building new markets, creating jobs and expanding access to essential goods and services. But while their business models have proven viable, the environments they operate in often make it difficult to grow. Governments play a pivotal role in creating an enabling ecosystem that allows inclusive businesses to thrive and scale their impact.

Creating income and economic opportunities

One of the most significant contributions of inclusive businesses is their ability to generate economic opportunities for low-income and marginalized communities. For instance, Amru Rice, an agribusiness in Cambodia, sources organic rice directly from 30,000 farmers, paying them premium prices and providing training to improve yields. This model not only raises farmers’ incomes but also strengthens their bargaining power and access to finance.

Governments can amplify these efforts, optimize public spending on welfare programmes, and foster wider social and economic development by supporting inclusive businesses through incentivizing policies.

Empowering women through inclusive business ​

Women are disproportionately represented at the base of the economic pyramid, often facing barriers such as lower wages, unpaid care work and limited access to formal employment. Inclusive businesses can address these challenges by offering flexible work, equitable pay and targeted training.  The Martha Tilaar Group in Indonesia, for example, has trained thousands of women in spa and wellness services, enabling them to secure employment or start their own businesses. ​ Such initiatives not only enhance women's economic independence but also contribute to broader gender equality. ​

Providing access to essential goods and services ​

In many developing countries, governments face difficulties in delivering essential services—such as healthcare, education, clean water and energy—to remote and underserved communities.

Inclusive businesses can help bridge this gap through innovative solutions, often leveraging technology and partnerships.​ In India, LifeSpring Hospitals provides affordable healthcare for women and children from low-income households. 

By incentivizing inclusive businesses, governments can improve service delivery, reduce costs, and achieve more with limited resources. ​Overtime, the integration of inclusive business practices can lead to systemic changes in how these services are provided to those that need them the most.  Public-private partnerships can be particularly effective in scaling these solutions. ​

Driving innovation and sustainability ​

To succeed in low-income markets, inclusive businesses creative solutions tailored to the unique needs of their target populations. ​ This often leads to breakthroughs that benefit not only those at the base of the economic pyramid but also broader markets. ​ For example, Jain Irrigation Systems in India has pioneered micro-irrigation technologies that save water and increase crop yields. This not only transforms the livelihoods of smallholder farmers but also supports environmental sustainability.

How governments can support inclusive business ​

Despite their potential, inclusive businesses face significant hurdles, particularly in low-income markets due to limited data, financial resources, capacities, and weak institutional frameworks. ​ 

Governments can promote inclusive businesses through a strategic approach that includes:

1. Define an inclusive business strategy: Develop a framework to align stakeholders, set priorities, and integrate inclusive business promotion with other government efforts such as small and medium-enterprise development policies. ​The Government of Sri Lanka has adopted a "Strategy to Promote Inclusive and Sustainable Businesses to achieve the Sustainable Development Goals in Sri Lanka”.
2. Institutionalize inclusive business promotion: Designate an agency or ministry responsible for inclusive business promotion, supported by an advisory board and a secretariat to oversee and support the promotion of inclusive businesses. For example, Singapore’s Centre for Social Enterprise (raiSE) serves as a dedicated unit to support social enterprises.
3. Accredit inclusive businesses: ​ A formal accreditation system helps identify and recognize inclusive businesses, and to link them with financial and non-financial incentives. In Viet Nam, inclusive business accreditation has allowed the government to identify and support inclusive business in their growth journey.
4. Raise awareness: Organize and partake in conferences, workshops, and forums - such as the ASEAN Inclusive Business Forum or the Impact Harvest Forum- that showcase successful inclusive business models and inspire public and private stakeholders.
5. Build capacities: Offer coaching, training and incubation programmes tailored to the needs of inclusive businesses, focusing on market research, community engagement and impact measurement. ​
6. Facilitate investments: Enable access to finance through concessional loans, matching funds, blended financing, credit guarantees and bonds. ​ Attract impact investors and connect them with inclusive businesses through networking events and partnerships.
7. Use public procurement: Allocate a percentage of procurement contracts to be sourced from inclusive businesses or offer preferential treatment to these impact businesses in bidding processes.
8. Measure and report impact: Encourage inclusive businesses to measure their social and environmental impact systematically by​ providing training on impact measurement and facilitating access to third-party auditors. Analyse the data to identify opportunities and gaps, use insights to scale successful models.

By implementing these measures, governments can create an enabling ecosystem for inclusive businesses, leveraging their potential to achieve national development goals and the sustainable development goals. The case for inclusive business is clear. It is a win-win model that aligns profit with purpose.

To learn more about how inclusive business can be leveraged as a catalyst for sustainable development, read The Inclusive Business Case for Governments by ESCAP.