08/09/2013 11:47 am ET Updated Oct 09, 2013

Inclusion Versus Innovation

"In this country," we were informed, "there aren't any women-owned businesses."

My team and I were a bit startled. We were in a West African country working on a project to reduce poverty by helping to stimulate business growth. Our consulting firm, Dalberg Global Development Advisors, had been hired by a multinational corporation that wanted to strengthen its ties in the local community. The corporation's local outreach had not produced the desired results over the years, despite considerable effort and expenditure. My team and I reviewed the corporation's activity and observed that, although the company had made donations to charitable causes, it had never invested in the local economy. Through consultations with the local community, we heard that people wanted the company to not just give one-off grants to charity but actually invest in the long term growth and vitality of the country. Identifying this significant unmet need, we began to develop a corporate strategy for investing in strengthening local business capacity, with the eventual goal of creating local jobs and increasing incomes.

We recognized early in the process that the key to sustain local economic growth was finding a way to invest in women, specifically women-owned small and medium enterprises (SMEs). Taking this kind of inclusive approach also made sense for the corporation. It promised both tangible and intangible returns: reduced costs due to sourcing locally and brand benefits from encouraging gender parity. It would also increase the local tax base, a boon to corporate government relations.

It seemed like a sound plan. Unfortunately, we had just been informed that in this country, there weren't any women-owned SMEs. Knowing that there are 8 - 10 million formal women-owned SMEs in emerging markets, accounting for roughly 30-40% of all SMEs, it struck me as implausible that there wouldn't be any whatsoever in this particular country. I respectfully protested that surely there must be some women-owned businesses, yet more than one development agency in the country repeated the same claim: there really weren't any.

We remained skeptical. Women-owned SMEs are less likely to be registered with local business associations or chambers of commerce, due to social custom, smaller size, and other factors that keep them largely in the informal sector. In this instance, my team and I found them by tapping into our networks amongst grassroots nongovernmental and civil society organizations who worked with women-owned enterprises. They existed - they were just a bit harder to find.

After we found viable women-owned businesses and included them in our client's programs, a fascinating thing happened. Others began to herald this program as "innovative." While I was pleased by the positive reception, I was also left to wonder...

Was this truly innovative?

I've worked in the developing world for nearly fifteen years. Recently, I have noticed an increasing tendency to overuse the adjective "innovative." In the development sector, we have become quick to dub exciting efforts innovative. As a result, the term is rapidly joining the ranks of "sustainable" and "scalable" - important concepts represented by terms too generously applied.

This eager labeling is leading us to lower the bar. In its time, the printing press was an innovation, as was steam power, the Internet and nanotechnology. When the term "innovative" is used to describe things that aren't particularly new at all or have not been modified in particularly creative ways, we risk losing both inspiration and impact. We risk losing the impetus to define and design something truly different.

More often than not, what we term innovative can more accurately be described as inclusive: the application of a known concept, perhaps in a new context or for a new purpose or targeting a new population. For example, I was recently reading about an "innovative financing mechanism", and as far as I could tell, it was a fairly straightforward credit guarantee fund. What distinguished this fund was that it would be targeting rural farmers in a developing country not known for inclusive access to finance. The model - a credit guarantee fund - had worked successfully elsewhere. It was not a radical new idea; it was an old idea, being extended to an underserved population, and it was poised to achieve significant impact.

Much like the credit guarantee fund, there was nothing particularly innovative about the West African private sector development program my team worked on. It, too, took an old concept - entrepreneurship and local sourcing--and applied it to a new population: women-owned enterprises. It brought a previously unrecognized demographic into public notice and into the supply chain. It was, in a word, inclusive. Moreover, it had serious impact: identifying and including these enterprises led hundreds of women and their families to benefit from increased income and access to resources.

In some instances, inclusion might be as important and powerful as innovation, from an impact perspective. After all, it's a broadening of methods that work. Certainly, calls to "unleash innovation" are often simply calls to make progress. In my experience, a very effective route to progress, as these examples illustrate, is to remove barriers - to participation, to access, and ultimately, to inclusion.

Conflating inclusion and innovation does a disservice to both. It risks disguising the need to remove barriers - a tangible and potent remedy - behind a more abstract term. It also downplays the aspirational nature of true innovation.

Too often, women and other groups are excluded from the highest levels of freedom and human development. Inclusion is a powerful step for collective progress. But we have not yet solved a great many challenges facing our world, for any group, whether included or not. We need both innovative and inclusive approaches working in tandem if we are to address ongoing development challenges across the globe. So let's call it like we see it; let's celebrate efforts to extend existing resources and solutions to new geographies and populations. Then, in parallel, let's push ourselves to develop radically new approaches and truly innovative schemes.