Beyond the Pioneer
Getting Inclusive Industries to Scale
Half the world lives on less than $2.50 a day. That’s over three billion people. Nearly a billion of them entered the 21st century unable to read a book or sign their names. Over a billion have inadequate access to water, and some 2.6 billion lack basic sanitation. Every third child in the developing world does not have adequate shelter. The sheer scale of the problems of global poverty is overwhelming.
In the fight against global poverty, one of the most exciting developments in recent years has come in the form of a new kind of business that goes by many names: social enterprises, inclusive businesses and market-based solutions to poverty. These enterprises create sustainable social impact by providing the poor with beneficial products and services, or create improved livelihood opportunities.
But while the proliferation of new market-based solutions is encouraging, not many have made a significant impact relative to the problems they seek to address. In 2011, our colleagues surveyed 439 market-based solutions in Africa and found that a mere 13% of them had achieved significant scale.
Given the magnitude of the problems of poverty, the challenge of scale is one of the most urgent obstacles that those interested in market-based solutions to poverty must address. What are the barriers keeping these innovations from achieving their potential and how can we overcome them?
Beyond the Pioneer: Getting Inclusive Industries to Scale is motivated by the need to address this challenge. This report is based on a year-long effort to understand the challenges of scaling and how they can be overcome. It is the culmination of hundreds of interviews, dozens of site visits, and our own experience of scaling market-based solutions on the ground. This report:
- Describes the key scaling barriers that lie both within and outside the firm, and explains why they often cannot be resolved by the firms themselves
- Spotlights the crucial role played by industry facilitators that are typically not themselves market participants but help to resolve key scaling barriers for the benefit of whole industries, not just single firms
- Analyses historical and on-going cases where such business models are scaling or have scaled, to better understand the principles and practices that underpin effective industry facilitation
- Explains the new risks that emerge even after scale has been achieved, and explores the challenge of mitigating those risks and sustaining scale
- Provides practical recommendations for foundations, aid donors, intermediaries, multilateral development agencies, impact investors, companies and host governments
This work has been made possible by the support of Omidyar Network, The MasterCard Foundation, Shell Foundation, Bill & Melinda Gates Foundation, The David and Lucile Packard Foundation, Global Impact Investing Network / Department for International Development (UK), The Rockefeller Foundation, United States Agency for International Development, and The William and Flora Hewlett Foundation.
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