On CSR: “…shows
tourism lagging behind
other industries.”
Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007
B4D - THE BEGINNING
SADC Conference on Poverty and
Development in Mauritius (2008)
Partnership for
poverty reduction
B
G
C
Jointly with SADC Employer Group
B4D Pathfinder = most
appropriate project
Inclusive Business
THE DEFINITION
Inclusive business aims
to overcome poverty
by incorporating
low income communities
into a company's
value chain…
…while maintaining profitability and upholding the principles of
Corporate Social Responsibility (CSR).
…sound environmental, health and safety management,
fair labour conditions, good governance
preservation of human rights.
THE APPROACH
How can business practices of tourism
companies be adapted to achieve longterm commercial profit and deliver
greater benefits to the poor?
It’s not
“another
problem”.
It’s about
profits of
companies!
Financial
benefits
MODEL OF THE B4D PROJECT
Focuses on ‘inclusive business’
Profitability
Uses knowledge, skills,
resources and strengths of
the private sector
People-centred,
home grown
Core Business
Contains mechanisms
for self assessment
Charter
Barometer
Certification
Toolkit
Including low income
communities into a company’s
value chain
BENEFITS
POOR PEOPLE AS…
Workers
Suppliers
Distributors
Retailers
SMEs
Consumers
BUSINESS MODEL
Second largest beer brand in Africa
Over 10 000 farmers involved
Manual Distribution Centers
Foto: HarvardKennedySchool & IFC
INCLUSIVE BUSINESS & SUSTAINABLE TOURISM
Inclusive business aims at overcoming poverty.
In general, sustainable tourism focuses on environmental
sustainability.
Environment = important component
of inclusive business as being the
resource base for the poor.
Inclusive business also covers large-scale forms of tourism &
mass tourism: it is neither equivalent only to ecotourism, nor
to rural tourism, nor to community based tourism etc.
STRUCTURE OF TOURISM INDUSTRY
Africa’s tourism industry = mainly SMEs
lacking financial and human resources
Divers range of actors involved in the
tourism industry = no model solution
Government: infrastructure,
marketing, licensing and
regulation
Aspects of governance,
labour, health, climate
change, safety
OBSTACLES
General obstacles:
1.
2.
3.
4.
5.
6.
7.
8.
(International) Verticalisation
Seasonality
Dependency from origination
markets
Market trends
Effects of instability
Low linkages
Lack of infrastructure
Lack of skills
Leakages:
Repatriation of profits, import of skills, commodities, technology...
Bookings abroad, big int. hotel chains, airlines: frequency & routes, etc.
Source: Economic Commission for Africa & Economic Policy Research Centre/V. Gerosa, 2003
POLICIES
At national level, tourism has been scarcely included in poverty
reduction policies in Africa
Lack of consideration and information about how tourism could contribute to
produce outcomes that directly benefit the poor, (focus is on growth of
the industry or its contribution to macroeconomic indicators.)
Source: Economic Commission for Africa & Economic Policy Research Centre /V. Gerosa, 2003
EXAMPLES OF GIVEN POLICIES
South Africa:
White Paper, Poverty
Relief Programme, TEP,
NQ, FTTSA, CPPP, etc.
In addition, Zambia,
Malawi, Lesotho,
Tanzania give
relevance to tourism
in their PRSPs
Source: Economic Commission for Africa & Economic Policy Research Centre /V. Gerosa, 2003
TOURISM OVERCOMING POVERTY
Labor-intensive,
esp. in low labour
cost countries
Non-cyclical
and resiliency
Built on natural & cultural assets and
consumed onsite
Great potentialities
Less vulnerable
than traditional
sectors
Lower barriers
to entry (e.g.
tariff barriers)
Catalytic effect on
other economies
Outsourcing of services (e.g.
food, transport, handy-crafts)
Creates better & more
gender concerned jobs
Source: Economic Commission for Africa & Economic Policy Research Centre/V. Gerosa, 2003
THE STARTING POINT
Best case: Direct earnings of
unskilled/semi-skilled workers
= 25% of the tourist spending
at destination level
Indirect earnings (supply
chain) adds an extra 6070% on top of the direct
effects of tourism.
Dynamic effects of tourism have to be taken into account
Natural resource
Business climate for
base
SME development
Livehood strategies of
Patterns of growth of
local households
local/national economy
Infrastructure
Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007
THE BUSINESS CASE
Business benefits center around:
1) mitigating risks (security, reputation, policy, regulatory risks)
2) building opportunity
Enhancing customer satisfaction
Improving staff morale & service quality
Offering a more diverse range of unique products
Improving community attitudes and interactions with guests
Building the brand and improving marketing capacity
Decreasing operating costs (sourcing locally)
FTTSA
Increasing access to finance (e.g. IFC)
Collaborating more effectively with governments
Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007
REQUIREMENTS
High knowledge and
understanding of local
employment practices
Willingness to e.g. link
hotels and local SMEs
•Policy
•Innovation
•Patience
•Resources
Collaborate with other markets
(formal and informal)
Examples
Mt. Plaisir Estate Hotel, Trinidad
Siwa Oasis and Example of Traditional Siwan Architecture
Source:
UNDP
OPTIONS
•Training/mentoring (staff, locals, SMEs)
•New employees
•Procurement
•(New) products
•(New) services
•Marketing
•Transport
•Quality insurance
•Packaging
•Microfinance systems/incentives
•Community revenue/profit sharing schemes
•Industry-wide training centers (talent pool)
•Building up institutional capacities (TEP)
•Think tanks on joint development
•etc.
B4D BAROMETER
BUSINESS FOR DEVELOPMENT VALUE CHAIN
PRO-POOR
FUNCTIONS PRO-POOR
InboundCHAIN CORE BUSINESSOutbound
Marketing
SUPPLY CHAIN VALUE
SUPPLY
CHAIN
Operations
logistics
Inbound logistics
Operations
Roadmap journey
Roadmap
logistics
& sales
Outbound
logistics
Marketing
& sales
BUSINESS FOR DEVELOPMENT VALUE CHAIN
Inbound
Services
logistics
Services
SUPPORT FUNCTIONS
IN A BUSINESS
Outbound
Marketing
Operations
logistics
Procurement
Services
& sales
HR
IT
Infrastructure
Roadmap journey
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©B4D Southern Africa Trust
Charter
Toolkit
©B4D
Southern
Africa
Trust
© B4D
Southern
Africa
Trust
ROAD MAP
SNV
ODI (Overseas Development Institute),
IIED (International Institute for Environment and Development)
ICRT (International Center for Responsible Tourism).
Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007