LAUSR

Abstract The Post-2015 Development Agenda from which the Sustainable Development Goals emerged envisions an expanded role of the private sector. Businesses are consequently challenged to become more inclusive of low-income groups. How the business community can achieve this is however insufficiently clear. This partly stems from weak and inconsistent conceptualization of ‘inclusive businesses’ and their business models. Since conflicting, subjective and normative interpretations of these concepts tends to inform empirical research and development interventions as a result, the development of grounded theories and coherent private sector engagement strategies is frustrated. This article responds to an urgent need for a more theoretically embedded and delineated conceptual foundation of inclusive business (models). Drawing on the rich literature on inclusive growth, sustainable business models, social enterprise and hybrid organizations, revised definitions of inclusive businesses and inclusive business models are proposed. The article argues amongst others that inclusive businesses necessarily prioritize value creation over value capture and should be judged based on the net value they create for ‘income-constrained’ groups. It furthermore proposes how the boundaries of entrepreneurial responsibility can be delimited, with implications for how sustainable business models more generally should be designed.