Inclusive Ventures

Opinion Sur promotes the creation of inclusive ventures in provinces and municipalities through establishing Developers of Inclusive VenturesAn inclusive venture associates a group of small producers with a strategic partner who provides management, leading knowledge and access to information, contacts, financing and markets. The idea is to generate inclusiveness from productive activities in promissory sectors and not embarking small producers in activities of low productivity and poor perspectives, as it tends to be the case with conventional programs.

To structure inclusive ventures we use modern business engineering that is well known and available in the market, even though almost never goes to support low-income sectors. These engineering include franchise systems, conglomerate of cooperatives, commercialization and export consortiums, locomotive agro-industries. With them, we can organize ventures that combine the energy and work capacity of the small producer with strategic partners who know the markets as well as how to dive through them with an effective management.

As the inclusive ventures hardly ever appear spontaneously, in the beginning and until this productive form gets widespread (and perfected over time), we require to establish small units that know how to promote them; i.e. the Developers of Inclusive Ventures

The Developers are not bureaucratic entities but rather small teams who are familiar with the identification of market opportunities and, especially, with the ability to organize ventures to seize those opportunities. Promoters of the Developers can be municipal and provincial governments, development agencies, ministries in partnership with entrepreneurial entities, trade unions, and civil society organizations.

An example helps us make concepts and actors involved more explicit. We will use the case of a franchise of rural family hostels, which involves gathering a certain number of rural families willing to participate in the activity as owners-managers of a small or medium-size inn in an area with some touristic attraction nearby. Each franchisee has (i) the right to receive financing and advice to build, remodel, or furnish and equip his hostel, to market its services, as well as training, technical assistance and alike. Equally, the franchisee has (ii) legal obligations to comply with, such as to respect norms and standards that the franchise establishes regarding physical infrastructure, equipment, buy of supplies, hospitality services, unified reservation system, and so on.

The franchise has three types of participants: the small producers, the strategic partner, and those who contribute the initial investment (and the eventual future rounds of capital as needed). Following our example, the small producers are the families who own their hostels; the strategic partner is someone with good managerial expertise in touristic operations, and the initial investors could be a wide and diverse ensemble of actors committed with inclusiveness such as public, mixed or private trust funds, development agencies, entrepreneurial organizations, trade unions, churches, and other actors of the civil society.

The ownership structure of the inclusive venture (in our example: who will be the contributors to the franchise of rural hostels) is crucial to ensure that efficacy is merged with fairness. That is, being able to attract a strategic investor who can efficiently manage the venture, as well as securing a fair distribution of results among the participants in the franchise (hostels’ owners, management partner, and investors).

The franchise of family hostels presents two levels of inclusiveness. The first level refers to the families who own the hostels and get a new source of income independent from their agriculture and farming activities (they increase income and diversify risk). The second level involves the microenterprises that provide services to the franchise clients, such as fresh products from small orchards, guided hikes, artistic and cultural activities, handicrafts, horse rides and so on, thus securing income and stable demand for their services.

The franchises, as well as other business engineering that can be used for establishing inclusive ventures, are applicable to diverse types of activities as the commercialization of agriculture and farming products, developing value chains of special products (such as honey, olives, vicuña), urban networks of touristic establishments as bed & breakfast, central fresh products and services wholesale markets.

Local governments can be excellent promoters of the Developers of Inclusive Ventures though, given their budget restrictions, they do not necessarily need to be their funders or managers. Their key role is to promote and act as a catalytic element to those initiatives, not developing them by themselves. Opinion Sur covers these issues that interest municipalities and provincial governments in a workshop called Local Explosion: new ways to promote local development (Spanish version available at [La explosión de lo local: nuevas formas de promover desarrollo local->], coming soon in English).

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