Negocios Inclusivos

CONCEPT NOTE

“DEVELOPMENT OF INCUSIVE BUSINESS WITH THE BOTTOM OF THE PYRAMID IN VIETNAM”
2010 - 2013


I. Basic Information on the Project


|Project Name |Development of Inclusive Business with the Bottom of the Pyramid in Vietnam |
|Executing Agency |SNV – Vietnam|
|Beneficiaries: |More than 10.000 direct entrepreneurs (among them individual producers, micro and small enterprises |
| |incorporated into the value chains of companies) |

|Financing Plan |Fund Agency|US$ 1.800.000 |
| |Country Counterpart contribution[1] |US$ 1’200.000 |
| |Total |US$ 3’000.000 |


II. RATIONALE:BACKGROUND, CHALLENGES, AND OPPORTUNITIES

A. The Base of the Pyramid (BoP) [2] in Vietnam


2.1 Although Viet Nam has made solid progress toward adoption of a market -oriented economy and has achieved rapid economic growth it is still one of the poorest countries in the South East Asian Region. The country shows important progress in reducing poverty but some groups have benefited less from theeconomic development and are vulnerable to social and economic exclusion. Low-income segments face a vicious cycle of remaining poor due to difficulties to access to productive resources, financial and market information services, technology, infrastructure, and social interaction. Poverty is concentrated in the northern and central regions that are home ton nearly 60% of the poor in the countryB. Business Environment in Vietnam

2.2 In recent years, the Vietnamese government has emphasized its commitment to create a fair business environment for both the state and non-state sectors in its medium and long-term economic development programs. The Comprehensive Poverty Reduction and Growth Strategy (CPRGS) reflects a clear commitment to the improvement of the business sector as animportant means to eradicate poverty in the country. It includes a strong emphasis on support for SME’s, which constitute the vast majority of the emerging private sector in Vietnam. The large firms that do exist are mainly state-owned or foreign-owned enterprises. In terms of contribution to GDP (13.5%) SME’s represent the largest segment of the enterprise sector while employing 10.5% of the totalworkforce, compared to 17.4% for micro-enterprises[3]
In Vietnam many companies are focusing their efforts on the implementation of Corporate Social Responsibility – CSR - strategies. Nevertheless, companies that really create value for economic groups identified in the base of the pyramid[4] do not only include the poor in their operations because they are socially responsible, but because theseactions increase their competitiveness, reflected tangibly in their profits and intangibly in their reputation among society.

2.4 .

C. The inclusive business approach

2.5 Inclusive Business is a profitable and sustainable model that seeks to contribute towards poverty reduction by including lower income communities within the value chain of companies in a win-win relationship (See Annex1). The low-income segments typically fill one or more of four important roles: Employees (new labor markets); Producers (new sources of supply); Distributors (new distribution networks); and Consumers (new markets for affordable goods and services).

D. The alliance SNV and WBCSD to promote inclusive Business

2.8 SNV, the Dutch Development Cooperation with 45 years of experience in poverty...