From Thought to Action: How Inclusive Business Policy Can Reach the Last Mile

Inclusive Business_Philippines
Date

November 14, 2019

5 min read

Inclusive businesses are for-profit organisations that deliberate incorporates the base of the pyramid in their value chains, providing sustainable livelihoods and enabling profits in the same effort. The largest sectors in Asia are Agriculture, Wellness and Tourism and Waste Management.

Policies encouraging the growth of Inclusive Business (IB) models need to complement the state of maturity, readiness and willingness of the larger ecosystem to capitalise on opportunities. In the Philippines, some see the need for strong policy involvement to institutionalise IBs, while others see it as a market-driven process to stimulate IB investment and model creation.

With the recently announced IB Roadmap released by the Board of Investments Philippines, the journey of implementation truly begins. Government actors will need to balance the tension between both viewpoints and shift their approach at different inflection points to better support the implementation phase outlined by the IB Roadmap. 

Here are four ways policy can translate thought into action:

1. Governments need to better align technical assistance and training support with practical needs of smallholders and cooperatives.

Support by government can be redundant in helping smallholders connect to the larger marketplace if the resource-matching process is not effective. Current incentives err on the side of being too premature, with many incentivising the greening of supply chains before building up adequate support for IBs to scale and be part of these value chains. In such a scenario, government support can be better matched in order for capacity-building efforts to meet actual needs.

2. Recommendations from the roadmap should bring transparency and track the implementation progress at national and local levels to inform future needs and opportunities.

In addition, aggregated, high-quality information increases investment promotion and uptake. The central database, one of the deliverables of the roadmap, is a positive step. Nonetheless, there still remains work to be done in order for IB practitioners to engage the data to make evidence-based decisions on how IB practices can be adopted in their value chain. 

3. Translating the raison d’être for IB into a common language across governments is needed to produce IB champions in critical industries.

Lack of a common language creates a human and intellectual capital gap. There is a need for IB champions in critical industries and government agencies to translate IB best practices for each government agency’s mandate. Arrival at a common language across government actors in key industries will be important in mainstreaming IB models and in helping them be appropriately supported.  

Secondly, the lack of a common language in IB may lead to uncoordinated policies. Efforts to strengthen the capacity of the supply chain to be more sustainable are impeded when there are separate policies informing different aspects of the value chain. For example, local governments may have outdated revenue regulation which undermines the relevance of promoting  IBs. Policies that are not harmonised may prevent uptake of IB models because of the differences in perception. 

4. As much as there is lateral knowledge-building work to be done, top-down capacity-building to enable better coordination vertically is equally critical.

Misalignment between the local and national governments can lead to an information gap and inefficient use of resources. Currently, there lies a short and long-term gap in operationalizing strategy between the two levels of government. This leads to the local government units (LGUs) facing a lack of resources in implementing national policy. In the case of IB, there will need to be clear provisions on how LGUs can take on an implementer role combined with a clear roadmap of implementation and the autonomy to use national funds. It will be critical for IB policy implementers to be mindful of locational advantage and key industries in order to introduce IB products with the most investment potential. 

Find out where are the 6 IB hotspots in Asia, and how social investors can do good better with IB approaches.

About the Inclusive Business Policy Workshop Series: Philippines

The Philippines Inclusive Business workshop was held in Manila on 16 September and brought together 42 representatives from both the public and private sector, including participants from Jollibee Group Foundation, Philippine Development Foundation, Department of the Interior and Local Government, Cargill Philippines and ABS-CBN Lingkod Kapamilya Foundation, and Philippine Business for Social Progress. 

Discussions in the room centred around how different actors in the room can take action to implement the roadmap, evaluate the roles that different stakeholders can play, and address the opportunity for policy intent to be translated to on-the-ground action. 

Find out what are the similarities and differences with the Indonesia ecosystem, and how you can leverage both economies.


About Author
Rachel Chan
Rachel Chan Assistant Policy Manager AVPN

Rachel is currently Assistant Policy Manager at AVPN. She supports the ongoing development of AVPN's policy programmes and believes in the power of multisector collaboration between social investors and policymakers to bring about solutions that can better support communities in Asia.

Her keen interest in international development started from an internship in Uganda where she worked on income-generation in a community school and conducted qualitative research around stigma faced by the deaf community. The experience taught her the importance of responsible and sustainable development and she is always on the lookout for new opportunities to contribute better. She believes in the potential of using finance for good and is excited to build a richer and more diverse social investment ecosystem.

Rachel holds a Bachelor's Degree in Economics from the University of British Columbia (Vancouver). In her spare time, she can be found practicing her beginner's-level Bahasa Indonesia.