Malaysia is in the process of developing its new 5-year national development plan, the 12th Malaysia Plan 2021-2025 (RMKe-12), which seeks to promote shared prosperity. The Government, through the National Entrepreneurship Policy 2030 (Dasar Keusahawanan Nasional, DKN 2030) has also outlined support measures for SMEs to become more innovative and resilient. In addition, the government is also seeking to use public spending efficiently. Inclusive Business (IB) can support these strategic objectives by creating better shared prosperity and an entrepreneurship culture that is more financially sustainable, innovative and dynamic, as well as more inclusive for the bottom 40 per cent income groups (B40).

Inclusive business (IB) are innovative business models that provide solutions to the needs of the B40 at scale. IBs have four key common features: (1) they are commercially viable, bankable and for-profit business models; (2) provide systemic solutions for the relevant problems of the poor and low-income people; (3) have scale in business operation, growth and social impact; and (4) are innovative. Inclusive businesses are different from social enterprises and corporate social responsibility (CSR), which are also other forms for the private sector to support social outcomes. Existing mainstream business, social enterprises and CSR initiatives can be transformed to develop into inclusive business models.

Since 2017, when ASEAN leaders called for greater emphasis on creating an enabling environment for inclusive businesses, various governments in the region (including Cambodia, Indonesia, Myanmar, the Philippines, and Viet Nam) have embarked on promoting IB, and an increasing number of companies – supported by impact investors – have established IB models.

In this context, the government of Malaysia has requested the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Inclusive Business Action Network (iBAN) to conduct this study to explore the relevance of inclusive business for Malaysia, analyse the status of inclusive businesses in Malaysia and assess the environment in which they operate, in order to provide recommendations, where relevant, for promoting inclusive businesses.

The landscape study notes that even if Malaysia is a high middle-income country and its government actively supports the B40 through a wide range of programmes, there are still unmet needs, market opportunities, and companies who want to serve the B40 market.