Exploring Inclusive Business Strategies: Japanese Businesses Go Inclusive
by Karen Newman and Ai Ohara, Business Call to Action
Whether it is due to a desire to seek new geographical markets or to reach different customers, an increasing number of Japanese companies have been moving towards inclusive business models, which incorporate low-income people across the globe as consumers, suppliers, distributors, and employees.
The Business Call to Action (BCtA), a leading global platform advocating for the private sector to commit to inclusive business, recently acknowledged this potential tipping point of Japanese companies interested in new markets, especially in Africa.
Last month in Japan, UNDP Tokyo held a forum “Exploring the future of inclusive business in Africa.” The program attracted more than 70 businesses and other public participants eager to learn more about how to integrate low-income parts of the world into their core business and generate new market opportunities. Companies highlighted the importance of building trust when working with new suppliers and distributors. They also emphasized the need to find sustainable partners and work closely with national and local governments.
Recent private sector missions to Africa organized by UNDP Tokyo, have also boosted the appeal of working in new markets. These missions allowed Japanese companies to explore opportunities in key places like Kenya and South Africa. They also revealed how business is done in those countries and helped company decision-makers forge relationships with new suppliers and potential development partners in the region.
Later this month, UNDP Tokyo and the BCtA will be hosting the first Business Call to Action forum in Japan to promote inclusive business for firms interested in the concept of inclusive business. This forum entitled “Innovations that Improve Lives” will showcase the work of four Japanese BCtA member companies who will be sharing insights into innovations made by their business in countries like Kenya, Ghana, Egypt, Saudi Arabia, Kyrgyzstan, Vietnam, Cambodia and India. The event is hosted in conjunction with the Japan Business Federation. As part of this program, Helen Clark, Administrator of the United Nations Development Programme (UNDP) will make a keynote address on public-private partnerships following the forum.
The message is becoming clear. Inclusive business models go beyond immediate profits and higher incomes for many of these Japanese companies. The benefits include driving innovations, building markets and strengthening supply chains. The newly-served customers—i.e. the poor—enjoy improved communities, enhanced productivity, sustainable earnings and greater empowerment.
More and more top companies like Ajinomoto Co., ITOCHU Corporation, kurkku, Ryohin Keikaku (MUJI), Sumitomo Chemical and Unicharm Corporation are exploring ways to develop value chains in new regions.
Consider MUJI, a leading retailer and lifestyle brand. MUJI recently joined the BCtA with a new commitment to expand training and sourcing from more than 500 low-income artisans in transitional and post-conflict regions. In Cambodia, Kenya and Kyrgyzstan, MUJI’s initiative will build capacity among artisans, particularly women, in an eco-friendly manner to create job opportunities, improve livelihoods and bring their goods to new markets.
Other companies are also exploring new models that incorporate their core business objectives into diverse investment and local activities. In September, Ajinomoto Co., Japan’s leading food and technology firm, announced a new commitment to join the BCtA. It plans to expand its nutritional supplement program in Ghana and reach an estimated 200,000 weaning infants by 2017.
As innovators in this space, the BCtA and its growing membership have helped to advance the inclusive business agenda by showcasing novel business models, sharing best practices, measuring the financial and social impact of these companies and forging partnerships to improve scale and increase development impact. The BCtA continues to lay the groundwork for the growing number of Japanese companies looking for evidence that inclusive business can be profitable and create a social impact.
Companies, in Japan and other developed nations, are realizing that growth in the next century will require rethinking their business strategies and reaching a wider consumer base, undoubtedly in emerging markets. They will continue to seek ongoing knowledge about inclusive business opportunities, impact assessment, and partnerships. They want a deeper understanding of the opportunities and challenges in Africa and beyond.
Inclusive business models promise to benefit both established companies and emerging economies. It’s encouraging to see them gaining significant traction in Japan.
To learn more about some of the projects that are underway by Japanese BCtA members, visit:
- Ajinomoto Co offering essential nutrients for children and mothers to combat malnutrition in Ghana
- ITOCHU Corporation & kurkku helping farmers in India convert to organic cotton production.
- Ryohin Keikaku (MUJI) developing the capacity of handicraft producers in low-income countries.
- Sumitomo Chemical expanding local production of bed nets.
- Unicharm Corporation bringing affordable hygiene products to low-income women and children.
UNDP continues to support and advocate for pro-poor but commercially viable inclusive business models. The organization documents global best practices through a number of different initiatives, including the Business Call to Action. The Business Call to Action (BCtA) is a leading multi-stakeholder initiative designed to bring together companies interested in developing inclusive business models.