Research and evaluation for inclusive business requires application of key questions to different sectors that aim to serve the Bottom of the Pyramid.
In our approach, we segregate inclusive businesses according to focus, as follows:
|Customer focus||services such as health care, water, clean energy, toilets, nutrition supplements|
|Producer focus||production, warehousing or marketing for e.g. farmers, livestock owners, craft producers|
|Employee focus||a business (that may also have a customer or producer focus) that provides new or enhanced employment opportunities.|
For businesses focused on low income customers or producers, the relevant evaluation questions include:
- Access: location of outreach, profile of people who access (men/women, low income/poor, vulnerable groups
- Use and Quality of service: technical assessment of the service, regular and correct use of the service, costs of access, problems reported
- Reduced costs: comparison of costs and quality of service with any alternative
- Increase in welfare: indicators of quality of life – depending on the nature of the service; perception of well-being; any negative, unintended results.
For employment focused business, the relevant questions are:
- Access: number and profile of direct employees
- Benefits to direct employees: earnings from direct employment, increase in (including stability/regularity) of earnings compared to previous or alternative employment
- Indirect employment: number and profile of people employed in ancillary activities in the supply chain
- Benefits to indirect employment: earnings and comparison with previous earnings
Information on access, use, quality and costs is directly useful for business managers as they seek to scale up their business. Funders, social investors are interested too in the welfare and employment questions, as well as wider development effects related to, for example, environmental effects or pressure on government facilities.
Methods for evaluation include quick surveys of users and non-users – allowing for baseline and endline follow up, and qualitative interviews along with organisational and financial analysis of the business.
EDA is applying this framework as part of the evaluation of DFID’s Samriddhi Fund in India, under implementation with SIDBI’s Venture Capital Fund. Businesses being covered include: affordable private health care, public private partnership for water supply, agricultural warehouses, dairy farming, organic farming.
Cross country research on systems relating to outcomes, scalability and replicability has included case studies of global best practices in urban livelihoods, covering: Inclusive Solid Waste Management with Wastepickers, Belo Horizonte, Brazil; CEDEZO (microenterprises support centre), Medellin, Colombia; Harambee Youth Employment Accelerator, and the Awethu Project (entrepreneurship), South Africa;; PNPM (national programme for community empowerment), Mandiri, Indonesia; Kuala Lumpur City Hall (empowering street vendors), Malaysia; and Vocational training centre in Shandong, China.