Is Japan ready for social innovation?

In recent years, “social entrepreneurship,” “social innovation” and “sustainability” have found their way into the mainstream lexicon of Japanese business circles. Picking up the trend, The Japan Forum for Business and Society (JFBS) held its 5th annual conference last September at Waseda University under the theme “Entrepreneurship and Sustainable Innovation.”

Presided by Kanji Tanimoto, Professor at Waseda University’s School of Commerce, JFBS is an academic association and research/discussion platform on the relationship between business and society, with a focus on current global trends, issues and challenges. The conference featured topics ranging from social entrepreneurship and sustainable/social innovation, to intrapreneurship, innovation management and partnership among sectors.

Professor Tanimoto, JFBS's president and guest editor for this year's call for papers, tells us about the organization, its activities and the growing – albeit slowly - social innovation trend in Japan.

What is JFBS’s mandate and who are its members?

The Japanese Forum of Business and Society is a very unusual platform for Japan. It comprises about 200 members, 55% of whom are scholars and 45% practitioners. JFBS aims to bring together people from the academic, public and private sectors, as well as unions and NPOs/NGOs, to discuss current global and national social issues. In addition to our symposia, we organise regular lectures delivered by keynote speakers from abroad and the Japanese business community.

Emerald Group Publishing is currently advertising a call for papers (open until March 31) on the theme "Entrepreneurship and Sustainable Innovation." What is the link between JFBS and this global publisher?

JFBS garners much attention from international businesses and organizations having an interest in our conference topics. A few years ago, the editors in chief at Green Leaf Publishing and Emerald Group Publishing contacted me to see if they could join our conference on Corporate Social Responsibility (CSR) and Corporate Governance. In 2014, Green Leaf published a special issue on the "Japanese Approaches to CSR" in its Journal of Corporate Citizenship, and this year, Emerald Group's Journal of Corporate Governance: The International Journal of Business in Society is going to feature a special issue on "Entrepreneurship and Sustainable Innovation." Our winning papers have appeared in both journals, as well as in JFBS Annals.

As Emerald Group Publishing’s guest editor, what are the key elements you are looking for in a candidate’s research paper?

Typically, research papers have focused on the business side of things. For instance, it’s easy for iPads and iPhones to cross borders, but not so much for new ideas. So we need not only think about how entrepreneurs can generate new ideas and create innovation, but how they can diffuse and disseminate innovation. "Diffusability" is particularly important. As such, collaboration with stakeholders must be encouraged through creative diffusion processes. Also, for ideas - Western or other - to be successfully implemented in Japan, one must take into account the differences in culture, social structure and capital, government authority, etc. For instance, Tohoku has a social structure that's different from the rest of Japan, and new ideas from Kansai may not be easily implemented in Tohoku. What we need is to get people to accept the spirit of these ideas and the implementation of new systems in their areas. In this regard, we need not only look at entrepreneurship as the act of starting and operating a business, but as an engine for growth, adaptability and diffusion of novel ideas.

How would you define sustainable innovation?

Sustainable innovation can be defined as both "a new technology and business scheme contributing to sustainable development while providing social and economic results." A good example of this is the need for Japan to enforce its environmental laws so as to help reduce exploitation of unsustainable timber in East Asia - we often have little information about and no control over supply chains. So company executives, human resources must be further sensitized. Sadly, with each report, more details about social and environmental malpractices of Japanese companies are disclosed. Also, on a more national level, Japan must tackle its problem of increasing poverty.

Can you give us examples of sustainable innovation initiatives that were successfully implemented in Japan? 

Japan has had a bad history of environmental pollution. In the '70s and '80s, the government implemented strict regulations. More recently, many companies are able to tackle this far beyond compliance by means of hard technology. Hybrid cars, mega-solars, windmills and BIOPI (Plant biology and innovation) are all examples of Japanese hard tech initiatives. Now, what we need is innovative soft tech solutions to tackle social issues such as poverty, gender equality, etc. This is in line with the UNDP's 17 Sustainable Development Goals (SDGs) -- the Millennium Development Goals’ successors (MDGs): Ending poverty, protecting the planet and ensuring equality and justice for all. The problem is, not many people understand this. The role of the private sector has been emphasized to develop new technology and so, when it comes to innovation, Japan still lacks the "social" part of it. CEOs don’t really pay attention to management issues, for instance.

What’s impeding the implementation of social initiatives within Japanese organizations?

The communication and decision-making system, which makes up the core culture, is a major problem. In most Japanese companies, boards of directors are made up of 8-9 out of 10 "oji-san tachi" (middle-aged and older Japanese men). Japan is still closed off. There are no foreigners – and very few women- on these boards, even when they are working for the same companies. The core stakeholders have enjoyed the nice fruit of Japan’s great economic success but the others have not been treated as equals. Historically, every time the government has tried implementing soft regulations, like the Equal Employment Opportunity Law, for instance, opposition has been fierce. Not so many companies raised their hand to get a reward because they must disclose the number of women they are hiring and promoting to higher ranks. Clearly, diversity in management levels must be further encouraged, and peripheral stakeholders - handicapped, immigrants and women, for instance - must be included. Having said that, we do have a few exceptional companies that employ and provide equal opportunities for people who have experienced the outside business world, but it’s not a majority.

In what ways can Japanese companies leverage sustainability as a driver for social innovation?

The truth is, in Japan, company CEOs are not very big drivers for social innovation. In North America, Europe and the UK, there are many initiatives to help find and promote sustainable solutions. A good example is The Big Issue, a UK monthly publication that employs homeless people and pays them to sell its magazines as a way to earn money (rather than begging). It’s a good social business model: Half of the profits go to the office and half to the homeless. In the U.S., companies like Give Something Back have a similar business scheme. We’re only just starting to see more of these kinds of initiatives here in Japan.

Is Japan ready for social entrepreneurship?

Social entrepreneurship was a new buzzword in Japan when it entered the corporate jargon back in 2000, which was a stagnant economic period. Traditionally, entrepreneurs are not so well respected in this country - according to the OECD, Japan has one of the lowest rates of start-ups in the world. Social entrepreneurs must provide economic performance as well as social performance, which is not an easy task. Younger generations are not so inclined on becoming entrepreneurs: They lack the drive and energy required to start a new business. Compared with the elderly who are held in great respect, the youth don’t have so many opportunities to start a new business or get a bank loan. Most graduates still prefer to enter big companies because they want good jobs and lifetime employment. They also want to be guaranteed a certain social status. And this is supported and encouraged by the entire family. But that’s gradually changing.

How can the youth be further encouraged to pursue their own venture as social entrepreneurs?

A lot of university students come from wealthy families, so they don’t fully understand social issues such as poverty, for instance. But to see it first-hand is much more susceptible to change their perceptions. What’s more, they are often not willing to go abroad by themselves. So, mixing our MBA students or dispatch them to other countries on international exchanges is very important. We also, as a nation, must allow for greater acceptance of risk.

How do you foresee the evolution of the Japanese current business model?

During the post-World War II miracle boom, there was no talk of gender equality and gender diversity, for instance. The ensuing "lost decades," however, have facilitated the discussion about social issues. And it’s only recently that we’ve entered plenary discussions to implement social innovation in Japan. The U.S. and Europe have been promoting sustainable development and innovation for a long time, but Japan has been slow to catch on. Corporations have an important role to play; though government, academia, NGOs and the private sector need to create more partnerships and set new platforms.

In your opinion, what can be done to foster cultural and structural change within the Japanese corporate world?

To be honest, we haven’t see much change in the past decade. Social issues are immature in Japan, and the country lacks the Western culture of criticism – the Japanese prefer to solve issues in a positive and peaceful way. We need more civil and social organizations. Currently, there aren’t enough advocacy NGOs in Japan, and very few advocacy or public proposals. The Japanese lack the experience to criticize stakeholders, including labor unions. To foster change within the Japanese corporate world, we need to engage in wide-ranging social discussion in Japan. And international pressure from NGOs and Western countries would be effective. We cannot expect a miracle to drastically change the mindsets in just a few years.

Could intrapreneurship help mothers with an entrepreneurial mind re-enter the workplace after giving birth?

Intrapreneurship would be advantageous for anyone interested in contributing innovative ideas to their company. It would also benefit the company itself. New blood means new ideas. When you have the same group of people trying to find novel ideas, it always end up being the same ideas. Unfortunately, intrapreneurship would be hard to implement, as there is no clear description of positions, and the Japanese always work in small teams. Everyone’s job depends on everyone else’s. Work productivity is low (the Germans have a productivity rate that is 1.5 times higher than that of the Japanese). Moreover, there aren’t many support programs for women (maternity leave, day care centers) within the companies, and not many people make use of their paid holidays. Delegation of power is difficult; it’s a male ego thing… the need for control, authority. The way Japanese work, how they evaluate performance and the workplace culture, these have yet to change.

As professor and president of JFBS, what is your personal mission with regard to the promotion of social innovation in Japan?

To inspire younger generations to "cross the border" -geographically and psychologically. I also wish to educate CEOs, as it falls upon them to create a tipping point for change in the workplace culture. At JFBS, we try and organize symposia to spark discussions between business people and scholars in Japan and the rest of the world. Unfortunately, many Japanese CEOs appear reluctant to come to our events as they are mainly conducted in English. And big global companies don’t have that many employees who can speak English.

JFBS’s next conference is scheduled to take place Sept 8-9, under the new theme "Marketing and Social Change." For more information, visit JFBS’s official website at http://j-fbs.jp.

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