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Financial Crisis

Japanese Learn to Mind Their Business for Others

After two decades of crisis more and more Japanese want to do business for society, not just for money. Credit: Daan Bauwens/IPS.

TOKYO, Mar 2 2013 (IPS) - After two decades of economic stagnation and serial natural disasters, a growing number of young Japanese believe social entrepreneurship is the best way to rebuild their society.

Masami Komatsu (37) is one of them. He founded his investment company Music Securities in 2001, a few years after the Japanese banking crisis of 1998. ‘There was no more investment in vulnerable sectors as music, traditional crafts or sake brewing,” he tells IPS. “We made it possible for people to start investing in what they personally think is important and should be kept alive.”

However, Music Securities does not work by way of donors and donations. It is an investment fund with returns that currently ranks among the best performing in Japan, managing over 33 billion yen (27 million euro) worth of investments held by over 50,000 shareholders including some of the nation’s most wealthy companies. In 2009 Komatsu set up the first retail microfinance fund in Japan, allowing individuals to invest in microfinance projects in Cambodia.

At this moment Music Securities is the largest private financier in the reconstruction of companies that suffered losses from the tsunami. “A month after the catastrophe had happened we visited the area and suggested our plan to the local business leaders,” Komatsu tells IPS. “We had the feeling we had to do something. Not volunteer, but use our existing business to resolve the problems of the stricken areas.”

At this moment more than 25,000 individuals have invested a total of more than 100 billion yen (810 million euro) in the tsunami fund.

In 2001 Music Securities was ahead of its time. It took until 2005 before the concept of social entrepreneurship – a revenue-generating business whose objective is not personal gain but the pursuit of a social goal – was thought of at Japan’s oldest university Keio in Tokyo.

But in recent years, the phenomenon seems to be gaining momentum rapidly. In 2011, Fukuoka on the Japanese Island of Kyushu was the second city in the world to be named a ‘social business city’ for spreading the concept of social business across the Asian continent. Nobel Laureate Muhammad Yunus, who developed the idea of social business, opened the world’s first social business research centre on the grounds of Kyushu University.

According to Japan’s Ministry of Economy, the number of social businesses went up from virtually none in 2,000 to a total of more than 8,000 in 2008, employing over 320,000 people. There is no data on the current number, but everything points to the fact that the phenomenon has been even more on the rise since then. For instance, at the NEC-ETIC Social Entrepreneurship School in Tokyo, numbers of applicants have risen five-fold since 2010.

Since the start, Nana Watanabe has been one of the driving forces behind social entrepreneurship in Japan. Through her work as freelance journalist and photographer, she introduced more than 100 social entrepreneurs to the Japanese public between 2000 and 2005 through several publications.

“Japan was left without role models after the bursting of the bubble economy,” she tells IPS. “It led to a general state of depression, the country didn’t know what to do. In 1999 I discovered the new wave of social entrepreneurship, coming up among elite students in the states. I immediately thought: this is what we need.”

In 2011 Watanabe founded the Japanese branch of Ashoka, an international NGO supporting the work of over 2,000 social entrepreneurs in 60 countries around the globe.

“Social business is definitely an emerging phenomenon,” she tells IPS, “and the reason behind it is simple: people are getting increasingly disappointed in Japan’s large companies. Today’s young have seen their parents sacrifice their lives in exchange for the promise of lifetime employment, only to be have been laid off in recent years. More and more young people prefer to start on their own.”

“The myth of Japanese government efficiency has collapsed,” says Toshi Nakamura, leader of Kopernik, an on-line market place offering technological solutions to problems in rural communities in developing nations.

“Up until the middle of the nineties people had faith in the government’s technocrats to drive the economy and provide social services,” he tells IPS. “This is no longer the case and people realised that a number of social issues had to, and can be tackled by ordinary citizens.”

It is not just disappointment in Japan’s companies or government that inspires the Japanese to get involved in social business. “After the financial crisis we have seen a return to traditional values,” says Japan’s leading business analyst Kumi Fujisawa. “People aren’t looking for short term gain but concentrating on long-term perspectives. There’s a return to idealism, people want to contribute to society again.”

According to polls organised by the Japanese government, the value of work is being reconsidered in Japan since the start of the financial crisis. The number of people that answered that they wanted to work ‘to contribute to society’ rose sharply after the burst of the asset bubble, from 46 to 64 percent in 1991. That number is above 65 percent at present.

“It is the result of a new inward-looking attitude,” says Hirofumi Yokoi, president of the Akira Foundation, one of Japan’s most influential organisations fostering social entrepreneurship that was founded in 2009.

“Growing uncertainty and anxiety about the future have lead to a change in behaviour. For lots of young Japanese, social business is not just a way to solve economic, social and environmental issues. It is also a way to tackle personal challenges. They will have to work as a part of a community and develop self-confidence, friendship, mindfulness, self-actualisation and social inclusion.”

“It is true that people start to reconsider the value of work,” Nana Watanabe tells IPS, “but most still lack the courage to act upon it. Social business is definitely taking off but we need to be cautious not to overestimate its success.

“First of all, it requires people to be very creative and imaginative. Next, at the moment it is very fashionable to say you will start a social business. But in the end, the majority are still looking for security and money.”

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