What about women in Inclusive Business?

Photo: Annie Spratt (UnSplash)

To reflect on the role that women play in inclusive business, it is first necessary to know what is being talked about when talking about inclusive business.

A business model designed to engage the private sector in sustainable development

In recent years, Inclusive Businesses have become more relevant both in the public and private agenda, mainly from the G20 in 2015 and also in 2018, developing the G20 Leaders Declaration and the Call to Action on financing for inclusive businesses. With the consolidation of inclusive business on institutional agendas around the world, hundreds of small, medium and even large entrepreneurs have benefited. Many governments around the world are creating more and better programs to encourage the private sector to get involved with the Base of the Pyramid (BoP), composed of over four billion low-income people. They do this by offering subsidies and tax benefits to companies to develop their own inclusive line, obtaining its inclusive business certification.

This innovative and comprehensive way of approaching the problems of the Base of the Pyramid is giving a 180º turn to the way in which the private sector improves people’s quality of life and increases income among the disadvantaged communities. The inclusive business model manage to deepen and enhance the social, economic and environmental impact (or in other words, the three foundations of sustainability) of the sector. This business model allows the development of a commercially viable core business that engages low-income people as large-scale suppliers, producers, customers, or employees.

Inclusive businesses established an innovative perspective that differs from the economic mainstream that frequently involves the private sector with sustainable development based on positive externalities or spillover effect. This innovate perspective has the potential to change the way the private sector engages stakeholders, building a strong and lasting network.

In this way, the inclusive business model responds to some of the Sustainable Development Goals of the UN 2030 Agenda, like end poverty in all its forms everywhere (Goal 1); end hunger, achieve food security and improve nutrition and promote sustainable agriculture (Goal 2); promoting a sustained, inclusive and sustainable economy economic growth, full and productive employment and decent work for all (Goal 8); reducing inequality within and between countries (Goal 10); and strengthening the means of implementation and revitalize the Global Alliance for Sustainable Development (Goal 17).

It can be perceived that this type of business model has existed since the beginning of cooperatives in the 18th century. However, it differs from other forms of social cooperation in the private sector in that it directly involves the Base of the Pyramid in its own core line of business, adding value to the value chain. This is why inclusive business is closely related to the social economy, NGOs and SRCs. To improve its effectiveness and efficiency, the association between these alternative ways of understanding the economy is necessary and fundamental.

Now it is worth reflecting, where do women fit in all of this?

Although almost half of the world’s population are women (49.6%), women only carry out 23.3% of the low income businesses , 33.9% of the middle incomes ones and 38.9% of the highest income companies. This situation is the result of what is known as the “glass ceiling”, or the numerous and diverse issues that women face to grow within companies.

Nowadays, many countries with access barriers for women in the labour market are trying to solve the issue. However, the worldwide reality is discouraging: over 2.7 billion women are legally restricted from having the same choices of jobs as men; thousands are excluded and are forced to work in informal or vulnerable jobs. Their possibility of scaling in their jobs are statistically and significantly lower than men’s possibilities.

Another issue that women face is that woman workers are still mainly responsible for care and domestic works. These domestic labours are the foundation that allow the current economic system to function, but they are unpaid and socially undervalued. Women have to fulfill their duties in their jobs and at the same time they are managing their households. Thus, it often happens that they lack time to invest time in other tasks such as their own training or even running a business.

Although, women are not only usually poorer in terms of time than men, they also obtain less income. The majority of the 1.5 billion people living on 1 dollar or less a day are women. Therefore, women should be the goal target of inclusive business models. Involving women in business lines and value chains is beneficial for companies with all levels of scalability and for all sectors, and could allow them to achieve Sustainable Development Goal 5: Gender Equality. This is how companies could design their inclusive strategy, significantly enhancing their profits and their potential for social impact, building a more sustainable and inclusive economy for all.

Isn’t the base the strongest part of the pyramid?

Gabriela Aguilar
Gabriela Aguilar
Gabriela is a consultant at GlobalCAD, specialising in local sustainable development, inclusive business and gender.