The Need For An Inclusive Economy
Rising economic inequality in our country is the biggest roadblock towards inclusive growth, concentrating 80% of the wealth with the top 10% of the population. This can have a potentially disruptive effect on our society and lead to social unrest. History tells us that large scale inequalities always cause political instability. We need an inclusive economy to address this anomaly.
An inclusive economy is one in which there is expanded opportunity for more broadly shared prosperity especially for those facing the greatest barriers to advancing their well-being. – Rockefeller Foundation
Only an inclusive economy allows the most disadvantaged communities within a society to benefit from new socioeconomic opportunities arising out of sustainable development. However, an inclusive economy cannot be driven by just government alone. It needs changemakers, social innovators and entrepreneurs to create sustainable solutions for some of the most complex social problems across Healthcare, Education, Water, Hygiene & Sanitation (WASH), Livelihood generation, Agriculture and Clean energy.
What Does It Take To Build An Inclusive Economy?
Building an inclusive economy hinges on five key characteristics as outlined by the Rockefeller Foundation. These five characteristics determine the success of building an inclusive economy and rendering sustainable impact to the target community.
People in an inclusive economy should be able to participate fully in their economic life and must have a say about their future. They should be able to participate in business and in regulatory bodies. They should be able to access the markets as consumers as well as producers. Transparency in policies and rules will allow people to start a new business, sell a new product, buy products and services to improve their lifestyle.
Opportunities for a progressive growth will be available aplenty in an inclusive economy. These opportunities will ensure a sustained growth and enable people to be self-sufficient, fostering inter-generational well-being.
Given that the economy has active participation from all the stakeholders with sustainable employment opportunities, there should be continuous growth in the markets and in the economic status of the stakeholders.
Individuals, communities, businesses and governments have a sufficient degree of confidence in their future and an increased ability to predict the outcome of their economic decisions. Individuals, households, communities and enterprises are secure enough to invest in their future. Economic systems are increasingly resilient to shocks and stresses, especially to disruptions with a disproportionate impact on poor or vulnerable communities.
There are a large number of opportunities to ensure an upward growth of all the people. These opportunities are equitable in nature, with no discrimination of either social or economic in nature, ensuring an all-round development for all.
Role Of Impact Businesses In Building An Inclusive Economy In India
More than two decades of globalization and technological innovation in India have produced significant economic growth, but the distribution of benefits has been skewed toward a few. This has given rise to high levels of income inequality.
Inequality in India primarily persists because of lack of access to basic necessities of life like primary healthcare, education, water & sanitation, and energy along with absence of productive livelihood opportunities for large swathes of the populace, especially in the rural areas. We believe that impact businesses or for-profit social enterprises deploying effective impact models on the ground are the key towards turning our economy into an inclusive one.
Impact businesses create positive social and/or environmental impact beyond the basic operational impact of the business. They focus on the specific positive outcomes that are created for specific stakeholders of the business, including employees, communities, customers, and the environment, and are marked by more intensive, generally intentional, systems of measurement and management. – B Analytics
In an earlier article titled, Social Entrepreneurs Can Be Antidote To Both Poverty And Inequality we have stated that while government policy works top down, social entrepreneurs innovate grassroots solutions sharply focused on various problems faced by target communities. Thus they are agents of inclusive growth and sustainable development.
India can truly realize her potential only if she builds an inclusive economy. We believe government alone cannot do this. We need social entrepreneurs to step in.