A challenge was posed yesterday: inclusive business requires innovation. Good innovation comes bottom-up from the field. Strong leadership comes from the top, downwards. How should the two best be combined to create new inclusive business models that work?

A second similar challenge: innovation is about sparking ideas, testing at a small scale. The "immune system" of most multi-nationals is set to clear out small distractions, ensuring the company keeps its focus on what is material. So while inclusive business is all about applying "business DNA" to development challenges, there is the problem that "corporate antibodies" inhibit the innovation needed.

Both of these were raised at an insightful workshop on Barriers to Inclusive Business, hosted by Business Call to Action and the International Business Leaders Forum. Research has already been done with companies by IBLF and Accenture Development Partners on the barriers they face, and the results, available in a summary report, are insightful. Not that we want to wallow in the problems and barriers, but understanding what the barriers are is a great first step to mapping ways forward.

Back to the question of innovation. It emerged clearly as the challenge that most participants identified with yesterday, and was also a running theme of discusion at the September New York event on Inclusive Business. Of course there are ways around this challenge: it requires strong leaders who provide space for innovation, and make clear that failure is allowed. But exactly how to do that varies widely. One approach driven from the top is to have an internal challenge fund, to which staff can bid for resources to develop a new idea. A similar approach described by Mafisa (wood sector) at the New York Inclusive Business event (see Delivering Results; Moving towards Scale ) was to run a competition amongst staff for new ideas, in response to a challenge set by their CEO to reach low income carpenters. One of the recent winners of the World Development Awards was Reuters Market Light (providing information to Indian farmers by phone), and this successful business model was initially supported by one of the company's incubation units. But an alternative approach was also discussed yesterday, where operational staff start small and operate 'below the radar' out of reach of corporate antibodies, until there is sufficietn evidence to present to higher levels.

How to encourage and harness innovation for successful inclusive business models is a question that affects many of us, and is a question on which the Business Innovation Facility aims to learn more as we work with companies in our pilot countries.