Session #3, Day 1 of Inclusive Business for Tourism training in Myanmar, May / June 2015. Steve Noakes.

1. Inclusive Tourism Training.
BIF Myanmar.
May + June, 2015.
Day 1.
Monday.
Session #3. (1:30 pm to 3:00 pm)
Inclusive business model for tourism enterprises
Author: Steve Noakes
Date: 25 May 2015

2. Training objectives this session
2
By the end of Session # 3, participants will:
1. Be aware of private sector options for engaging low income people
2. Have increased knowledge about the key concepts and definitions of
‘Bottom of the Pyramid’ (BOP) and ‘Inclusive tourism’
3. Know the difference between an ‘invention’ and an ‘innovation’
4. Be able to describe the concept of an ‘Inclusive Business’ and how it can
be applied to a tourism or travel business in Myanmar
5. Be informed about future trends bringing new innovation opportunities to
tourism enterprises in Myanmar
6. Have participated in ‘Reflections’ and small group working activities to
assist achieving each of the above points

3. Content
1. Concept of ‘Bottom of the Pyramid (BOP)
2. Private sector options for engaging low income people
(poverty reduction)
3. Inclusive Business (IB) concept
4. Innovation – concept, definition, tourism industry examples
5. Inclusive Business & tourism

4. 1. Bottom of the pyramid
C.K. Prahalad (2004)
Wharton Business School, University of Pennsylvania, USA:
‘… typical pictures of poverty mask the fact that
the very poor represent resilient entrepreneurs
and value-conscious consumers.’
 Need a better approach to help the poor
 Partnering with them to innovate & achieve
sustainable win–win scenarios
 Poor actively engaged
 Companies providing products & services to
them are profitable
Source: http://knowledge.wharton.upenn.edu/article/the-fortune-at-the-bottom-of-the-pyramid-eradicating-poverty-through-profits/

5. Base of the Economic Pyramid (BoP)
Source: http://accessbop.com/AboutUs/WhatIsTheBoP/

6. Inclusive business:
Aims to benefit disadvantaged
individuals who would
otherwise not have
opportunities to be involved in
economic activities.
Disadvantaged:
Low-income
Marginalisation
BOP: Beneficiaries from inclusive business
6

7. What does low-income mean?
7
International Development organisations - such as DFID - refer to as
“low-income” those people who live on less than $2.5 per day
(Ky 2,200)
Example:
BIF research shows that between 75% & 85% of the people living in
rural villages in Kayin and Mon state live below this level

8. 8
What does low-income mean?
However, the $2.5 per day does not always apply!
Many communities live on
above $2.5 per day thanks to
money coming from people
working abroad.
This is a “coping mechanism”
for poverty – because little
opportunities for many low-
income people in Myanmar
People from urban centres need more than $2.5 per day to make a
living, such as in Yangon.

9. Marginalisation can come in two forms:
• Geographic
People living in areas that hard to reach,
where there are few commercial and
economic opportunities.
• Social
People who live in communities who are
marginalised because of:
– Religious, cultural and social barriers
– History of military conflict
Who are marginalised people?
9

10. 2. Approaches for private sector
engagement in poverty reduction efforts.
Source: UNDP (2014) The role of the private sector in inclusive development. Barriers and opportunities at the base of the pyramid. Page 14
‘The inclusive business model goes beyond an exclusive focus on
people in poverty as a group of consumers to focus on building skills so
that they can generate products and services that the market demands.’


11. 11
3. Concept of Inclusive Business
Inclusive Business:
Refers to profitable core business
activity that also tangibly expands
opportunities for the people at the
base of the economic pyramid
(BoP).
 Engage poor people as
producers, suppliers, workers,
distributors, consumers - or
even as innovators.
www.inclusivebusinesshub.org

12. Inclusive business for development
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https://www.youtube.com/watch?v=0dZgHo4H2h4 3 minutes, 17 seconds

13. Inclusive Business
 Companies investing in inclusive business
require more innovation, time & perseverance
than may be expected
 More than in a ‘conventional’ business
 Getting the right
business model -
like putting pieces
of a jigsaw
together
 May need multiple
pilots.

14. What enables an inclusive business model to succeed?
More at:
www.businessinnovationfacility.org

15. Different users of Inclusive Business
Inclusive business is interesting:
 for companies - can offer new opportunities
for innovation, growth & competitiveness at
the same time as positive social &
development impact.
 for bilateral and multilateral donors,
foundations, governments & civil society
organizations - has the potential to drive
development impact in self-sustaining, self-
multiplying ways that do not require
continuous infusions of grant funding.
 for the poor - it brings greater access, choice
& opportunity in their lives and futures.

16. Companies developing inclusive business
models must address five core challenges
that cut across the industries they are in:
(i) Expanding reach
(ii) Facilitating access to finance
(iii) Changing mindsets and behaviours
(iv) Designing appropriate products and
services
(v) Developing pricing and payment
policies.
IFC (2010) Inclusive Business Solutions: Expanding opportunity and access at the
base of the pyramid. Authors: Beth Jenkins, Eriko Ishikawa, Alexis Geaneotes,
and John Paul

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4. ‘Innovation’
Joseph
Schumpeter
1883 - 1950
Innovation & technological change of a nation
 Comes from the entrepreneurs, or ‘wild spirits’.
Innovation = a critical dimension of economic change.

18. Invention – INNOVATION – New product
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Source: http://www.innosupport.net/

19. Product innovation: Goods/services that are new or significantly improved
– technical specifications, components & materials, software, user
friendliness etc
Process innovation: New or significantly improved product or delivery
method – changes in techniques, equipment, software etc
Marketing innovation: New marketing methods involving significant
changes in product design or packaging, product placement, promotion,
pricing etc.
Organisational innovation:
New organisational method in business
practices, workplace organisation or
external relations.
Concept of ‘innovation’
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See more at: http://www.oecd.org/site/innovationstrategy/defininginnovation.htm

20. Two examples from Ottawa – Canada’s capital city
Examples of innovation in tourism
product development
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https://www.youtube.com/watch?v=ITJL8RQXoT0 3+ minutes

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https://www.youtube.com/watch?v=nLHwR-3y2T0 1 minute 35 seconds
Examples of innovation in tourism
product development
Three short examples from Winnipeg

22. 22
Example:
Innovation in action: British Airways
The Happiness Blanket: Technology Meant to Make You Smile
‘The blankets’ visual cues helped staff see how passengers were feeling
throughout the flight and provide a tailored service for each traveller.
Happiness Blankets are an early example of British Airways’ commitment
to innovation in technology and customer service.’ British Airways.
https://www.youtube.com/watch?v=9oF0-28MOoU 2 + minutes

23. Indonesia:
Way Kambas National Park, Sumatra.
Wildlife watching cocoon
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Examples of innovation in tourism
product development

24. 1. Are you aware of any new innovative tourism products being
developed in Myanmar?
1. What are they? (Let’s write them up on the wall)
1. Why would you describe them as ‘innovative’?
1. Do they have any potential to engage more with people at the
BOP?
1. How?
Reflection/Discussion.
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25. 5. Inclusive Business & tourism
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Winya village, near Taunggyi,
southern Shan State, Myanmar.
The challenge:
Along the tourism value chain, is it possible to engage poor people as
producers, suppliers, workers, distributors, consumers - or even as
innovators?

26. Guide to Inclusive Business in Tourism
Refers to “people living in poverty” rather than
“poor people” .
It is the living environment of those affected
that leads to poverty.
‘Poverty in developing countries is largely a
structural problem rather than an individual
problem.
The lack of proper infrastructure, information,
training and skills, a conducive regulatory
environment, and widespread access to
financial services constrains market activity
and perpetuates poverty.’
The full report can be downloaded
from: http://goo.gl/vXVYof

27. 27
Inclusive business :
Goal: Collaboration of
commercial companies & poor
people as business partners in
order to achieve mutual
benefits.
+ incorporates development
goals into business strategies -
therefore well-suited to
collaboration between the
private & public sectors.
Source: Christina Tewes-Gradl, Mariska van Gaalen, Christian Pirzer (2014). Destination Mutual Benefit –
A Guide to Inclusive Business in Tourism. Endeva UG and GIZ GmBH
Destination Mutual Benefit:
Guide to Inclusive Business in Tourism

28. Inclusive business in tourism: Offers one
means of achieving sustainable &
responsible tourism.
Sustainable tourism: Involves the
commercial perspective in achieving the
so-called triple bottom line of
sustainability.
Responsible tourism: “Maximises the
benefits to local communities, minimises
negative social or environmental impacts
and helps local people conserve fragile
cultures and habitats or species”
Source: Christina Tewes-Gradl, Mariska van Gaalen, Christian Pirzer (2014). Destination Mutual Benefit
– A Guide to Inclusive Business in Tourism. Endeva UG and GIZ GmBH
Destination Mutual Benefit:
Guide to Inclusive Business in Tourism

29. ‘Pro-poor tourism’ - “tourism that
results in increased net benefits
for poor people”
‘Inclusive business in tourism
stands for a distinct attitude -
focuses on the impact of tourism
on poverty without losing sight of
environmental effects &
commercial viability.
Source: Christina Tewes-Gradl, Mariska van Gaalen, Christian Pirzer (2014). Destination Mutual Benefit –
A Guide to Inclusive Business in Tourism. Endeva UG and GIZ GmBH
Destination Mutual Benefit:
Guide to Inclusive Business in Tourism

30. Destination Mutual Benefit:
Guide to Inclusive Business in Tourism

31. Where are the opportunities for inclusion?
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Two paths to inclusion: employment & entrepreneurship.
Seven fields of inclusion can be distinguished:
1. Maintenance and services
2. Activities
3. Crafts
4. Food and beverage
5. Transportation
6. Natural conservation
7. Construction
Destination Mutual Benefit
Guide to Inclusive Business in Tourism

32. Where are the opportunities for inclusion?
1. Each group will represent a business sector: Tour operator,
Transport supplier, Accommodation, Restaurant, Souvenir shop,
Activity provider.
1. Work across the seven fields of inclusion.
1. Discuss & agree on specific employment or entrepreneurship
opportunities that could engage low-income people in Myanmar.
1. Report back to the whole group.
Small working groups
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33. Small working groups:

34. Did we achieve our training objectives
this session?
34
By the end of Session #3, participants were expected to:
1. Be aware of private sector options for engagement in poverty reduction
2. Have increased knowledge about the key concepts and definitions of
‘Bottom of the Pyramid (BOP) and Inclusive tourism
3. Know the difference between an ‘invention’ and an ‘innovation’
4. Be able to describe the concept of an ‘Inclusive Business’ and how it can
be applied to a tourism or travel business in Myanmar
5. Be informed about future trends bringing new innovation opportunities to
tourism enterprises in Myanmar
6. Have participated in ‘Reflections’ and small group working activities to
assist achieving each of the above points