It’s not easy to be optimistic these days. For those of us who have the privilege of living in countries with a reasonable level of socio-economic development, the world seems to be getting worse.

News cycles and social media rarely remind us that we are healthier and live longer (the world’s average life expectancy has doubled since 1900), that there are significantly fewer people living in extreme poverty (10% in 2015 compared to 36% in 1990), that infant mortality is now 4.3% compared to 18.2% in the 1960s, that there is more equal access to education, more freedom, more peace and more prosperity.

But it is true that in addition to the threats of war, terrorism and extremism, we still have 736 million people living on less than US$1.90 a day (in 2015), 815 million suffering from chronic malnutrition (despite the fact that we waste 1.3 billion tons of food every year), 780 million without access to drinking water and 1.3 billion without electricity. And that’s not to mention the catastrophes already caused (and anticipated) by our plastic, oil and Co2 footprint and the resulting climate change.

For decades, we have looked to the richest countries to “help” the weakest and most impoverished nations solve “their” development problems. But today it is increasingly clear that only with effective global partnerships – with real “development cooperation” – will we be able to overcome the global challenges we face in our time.

However, when it is estimated that achieving the Sustainable Development Goals (SDGs) would require an annual investment of between 1 and 4 trillion dollars – with official development aid in 2016 amounting to only 142 billion dollars and other official and unofficial sources of foreign aid estimated at 500 billion dollars – we quickly conclude that this path is not enough.

And it is in this context that inclusive businesses are emerging. Although few people are able to clearly define the concept – which is often confused with social business, social entrepreneurship, social innovation, creating shared value – the truth is that they are a growing reality and, although they don’t work miracles, they are certainly part of the solution to this dilemma.

Inclusive business has a broader framework than social business – which became popular at the beginning of this century, especially after Muhammad Yunus, considered by many to be the father of microcredit and social business, was awarded the Nobel Peace Prize in 2006.

While a social business is one that, while seeking financial sustainability, is created to solve a problem of a social nature (for reference examples I strongly recommend reading the Stanford Social Innovation Review article on BRAC“In the Black with BRAC“), inclusive businesses aim to include people living at the so-called “base of the pyramid” in the value chain – as employees, suppliers, distributors or consumers. In other words, to open up the market and its opportunities to around 4 billion people who earn less than US$8 a day or who do not have access to basic products and services or income-generating opportunities.

With inclusive business, the private sector has emerged for the first time as a “development partner”. Not associated with philanthropy or corporate social responsibility, but as part of its business model. A model that combines the private sector’s own interests with the development policy of the SDGs.

As the report summarizes Scaling Up Inclusive Business (IFC and Harvard Kennedy School): “Inclusive businesses are interesting for companies because they can offer new opportunities for innovation, growth and competitiveness, while having a positive social and development impact. They are interesting for bilateral and multilateral donors, foundations, governments and civil society organizations because they have the potential to stimulate development impact in sustainable and multiplier ways that don’t require continuous grant allocations. And they are interesting for the poorest because they enable greater access, more choice and more opportunities for their lives and their future.”

In part II, I’ll talk in more detail about this model and, specifically, how it can – and should – go beyond the private sector and be a transformative approach in the design and implementation of socio-economic development programs.

(Ariana Simões de Almeida – Social Entrepreneur and Co-Founder of Empreza Diak)