Make or Buy: When Should Corporates Invest in Inclusive Business Solutions?

I think there are two considerations. CIV can be the right choice if

    1. there is a unique business model or an innovation – that can’t be easily replicated by oneself but the likelihood and the potential for scalable impact is considerable. However, investments on a majority basis can be difficult since it requires strong and clear accountability structure in the buying company to manage this investment well.
    1. a company recognizes a need for systems strengthening that is required to make the own business work. Such an investment would however only make sense if the investment would be catalytic and on a minority basis since otherwise the management of the investment requires too much resources and can also create conflicts of interests.

Hi Maarten! In fact, that is what we have seen a lot in the examples we studied. For example Schneider Electric supports its investees with time dedicated by its employees for coaching etc. This is also beneficial for the company, since it brings insights back into the core and enables talent growth.

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We have invested in Investisseurs & Partners, an impact investign funds dedicated to Africa

Hi Christina, this has worked for us also. we see a lot of ownership from individuals who interact with the impact venture

Our objectives were and still are to implement the BoP market differently than by creating our own businesses but, as well, to integrate the eco system of BoP and Social entrepreneurs. The complementary objectives are to identify potential partners and to commit Air Liquide employees, locally, through mentoring

Great! So you have a choice in the investments made with your funds, or where you want to put your time?

Hi Maarten, i think it can be achieved in certain cases. We are currently evaluating an impact opportunity within our value chains where we are actively trying to co-design with business team. i am not sure if it can work in all cases

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No we are not in a position to decide directly but to influence and propose.
This investment, at this stage of our Inclusive Business activities development, is to learn, as I said just before and to integrate the local eco system of entrepreneurs and local actors

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That is a great example. This combines the speed of innovation of a start-up with the talent that is available at the corporate.


  1. when Corporations want to first take the time to better understand the concept the Inclusive Business, get exposed to social innovations and be convinced by the relevance of the concept first.

  2. when they have not yet formulated a clear link between the mission of Social Innovation initiative and the value for the strategy of the Corporate Group (exploring mode)

Very useful distinction! On the second point, the Danone Ecosystem Fund is an interesting example. It aims to catalyze business as well as not-for-profit solutions around its value chain. It seeds new solutions, and leverages its own capital with others funds, in particular public sector. In this way, it pursues both company and social objectives.

Great insights from everyone! Moving on to our next question:

Q2: In their study, Endeva identified 3 ways to buy: direct investment, self-managed fund and third party fund. When would you recommend to use which of these structures? Where do you see most potential?


None of these three ways to buy is used at Airbus BizLab. Currently, we are focused on sponsoring or procuring, instead of acquiring. I think that the relevant mechanism depends on the resources, the objectives and the priorities of the corporate, and also on the other investment vehicles existing in the company. For example, we have Airbus Ventures, Airbus Foundation and the BizLab, among others, as different vehicles to work in innovation.


I think all 3 ways would work, the choice should depend on how closely a company wants to be involved. The advantage of a direct investment is that you can learn more about how an inclusive business is evolving, and this is especially useful for strategically important topics. However, often a company may not recognize the strategic importance, and then a third party fund is the best choice.

A2: Depends entirely on the context we are operating in. For us direct investment was the only choice as we weren’t able to find any suitable enterprise to invest in. Also, we were doing it first time and therefore direct investment gave a little bit of extra confidence to board. However as we are evolving and so is the landscape, I think we will evolve towards self-managed fund. The ecosystem is rapidly evolving with many incubators supporting startups and helping them scale up. This pipeline, as it will develop, will provide us opportunity to be more sophisticated with our investing approach. At this moment all of this is in infancy and we have to support enterprises even operationally and in that case direct investment, despite its certain limitations, as highlighted in the report by Endeva, is a better way for us.

Agree, Favad, that it’s not either or. Both buying and making have their merits. In the study, we provide soem guidance along the main objectives companies are oursuing with their BoP market engagement, as well as main difficulties they face internally. But in any case the decision has to be derived from the strategic objectives. Here, I believe it’s useful to open up that choice, because in the first decade of experimentation, many companies went into inclusive business with not too much oversight (simply because of the early days), but now we know more and there are also good investment opportunities out there.

I think you are right re Danone. It is an impressive model that Danone has created. What I would love to see though - in all areas of corporate impact venturing or social business strategies - is a much more mature sense for rigorous measurement and evaluation, moving from output metrics to outcomes and in best case even impact metrics.


@Rey, do you think Airbus Ventures would invest in inclusive business, or would they pursue other (more profitable) investments?

And if I may add, at Schneider in our Access toi Electricity Program we have both approches at the same time: developping an internal business and investing in relevant start-ups.
It’s very efficient even if it requests a solid management of the “Chineese Wall”

All 3 have their own merits, and can be the best option depending on the objectives of a company. We did not find many examples for direct investment. Could be because they are less visible or because they are more complicated.

I see a lot of potential in Third Party Funds. They can generate economies of scale (eg in terms of the management team required or any on-the-ground structures) and enable an easy entry point for companies. Funds can also bring on board public sector partners with shares objectives, as in the case of the Schneider Electric Access to Energy Ventures Fund or the Danone-initiated Livelihoods Funds.