In Japan, various social, cultural, and regulatory reasons contribute to a weak entrepreneurial environment. Among these are values of unison over standing out, the belief that working for a big corporation is stable and better with a high likelihood of lifetime employment, the lack of tolerance for risk and failure, and too much red tape. Yet for a nation that depended heavily on the government to handle social issues, in which they showed minimal interest in solving, the rise of the social entrepreneur is becoming evident. Though still cited as having little impact on Japanese society, what will it take to advance social entrepreneurship in Japan?
According to Dr. Kanji Tanimoto, professor at Hitotsubashi University’s Graduate School of Commerce and Management, the collapse of the economic bubble in the 1980s and 1990s prompted the loyal employee to question the meaning of “why we work”. The National Survey of Lifestyle Preferences revealed that in 2007, 62.6% answered “I would like to be helpful to society as a community member”. This is an increase from 43.2% in 1983, showing people’s growing desire to contribute to society.
Today, social entrepreneurs in Japan generally work under a number of business models, mainly focusing on issues involving underserved communities and support for the most vulnerable populations including women, the elderly, the homeless, and the disabled.
Most social entrepreneurs run nonprofit organizations as they are relatively easy to set up. Since the Nonprofit Activities Promotion Law was enforced in 1998, there was a lot of support from society to encourage the establishment of nonprofit organizations.
Japanese social entrepreneurs often lack capacities in management and business development. Many education programs in Japan do not cover the development of social ventures.
The Entrepreneurial Training for Innovative Communities (ETIC), which launched in 1993 as a student organization from Waseda University to develop entrepreneurs and incorporated in 2000 as a nonprofit organization, partnered with Japan’s leading IT company to launch the NEC Social Entrepreneurship Schools in 2002.
Each year, 3-5 social entrepreneurs are selected to participate in a 7-month program to effectively start and manage their social ventures. But because of Japan’s low entrepreneurial rate, the program only manages about 50 applicants each year. The urge for individuals to contribute to society is as recognizable as the barriers of entrepreneurship.
Despite these low numbers, the promotion of social entrepreneurship in Japan is of large importance and the reason why it is a growing field in Japan. For one, Ashoka, an organization that currently supports the work of over 2,000 social entrepreneurs, launched Ashoka Japan in 2011. In an interview with Japanese newspaper Asahi Shimbun, Bill Drayton, the CEO of Ashoka, explains the country’s influence will allow change to accelerate.
The attitudes toward nonprofit organizations paved the way for the growth of a social business movement in Japan. Muhammad Yunus’ concept of social business – a zero-dividend, revenue-generating sustainable business that addresses social issues – is earning government support and media attention. Japan’s national broadcasting organization NHK previously aired a three-part documentary on social entrepreneurship featuring microfinance platform Kiva and bottom of the pyramid health provider Mobile Medics Healthcare.
At the Asia Forum for Social Business last July hosted by Kyushu University, Fukuoka has become the second city behind Wiesbaden of Germany to be named “Social Business City”. This means the city will act as a hub to promote social business throughout Asia.
In 2009, Kyushu University signed a Memorandum of Understanding for the establishment of “Grameen Creative Lab @ Kyushu University”, which serves as a hub for social business activities in Japan. The university’s social business centres have been focused on finding ways to ease the suffering of people following the Tohoku earthquake.
While there is evidence of growing support for Japanese social entrepreneurs and their ventures, as well as people taking up the role of the social entrepreneur when adversity strikes, there are still areas for improvement.
“In my opinion, the most important thing is for more people to learn that we can solve social issues through business,” said Dr. Tanimoto in an interview with Highlighting Japan.
“Even now, many people in Japan tend to have a prejudice of social businesses that outwardly appear to be philanthropic groups but are operated as profit-making ventures.”
As social business in particular is gaining momentum in Japan, Dr. Tanimoto believes that clarifying standards of performance would be needed to further develop social business.
“Right now, the biggest issue is establishing objective standards by which the performance of such businesses can be judged. Even if an organization is making a large contribution to society, it cannot be considered a successful and sustainable social business if it doesn’t generate earnings. The opposite is true as well: earnings may be high, but if the organization is not contributing to the community, it’s not considered a successful social business.”
“Properly evaluating social businesses will require an approach that balances quantitative measures, such as earnings, with qualitative ones, like social contribution.”
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