Abstract
The Sustainable Development Goals (SDGs) were launched to promote partnerships to enhance developmental effectiveness. This is especially apparent in Goal 17. The private sector is one of the prospective partners for the realisation of a sustainable society. Collaboration with it has accelerated internationally to challenge various development issues through businesses. This trend is impelled by both the public and private sectors, whose activities have different aims and purposes. Both multilateral and bilateral donors, including Japan, have planned and implemented various development projects in collaboration with untraditional partners, such as corporations. This chapter examines how partnerships with the private sector have been formed, focusing on Japan. First, it briefly studies international initiatives to understand the process by which previously separated entities—public and private sectors—gradually move closer to solve development problems. It then explores the way the Government of Japan and the Japan International Cooperation Agency, who are responsible for the public sector, have come to create or support projects in collaboration with companies. Their shift in the direction of international development responds to international calls for sustainable development. The chapter concludes by discussing the prospect of partnership with the private sector to realise the sustainable future that the SDGs aim to create.
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1 Introduction
Partnerships are the key to the realisation of a sustainable society achieving Sustainable Development Goals (SDGs), which cover a wide range of development issues currently faced worldwide. Partnerships are one of the declarations in the United Nations’ document Transforming our world: The 2030 Agenda for Sustainable Development (2030 Agenda) and Goal 17 of the SDGs. In its preamble, the 2030 Agenda declares to the intention to ‘mobilize the means required to implement this Agenda through a revitalized Global Partnership for Sustainable Development […] with the participation of all countries, all stakeholders and all people’ (UN 2015, p. 2). Goal 17 aims to ‘[s]trengthen the means of implementation and revitalize the Global Partnership for Sustainable Development’ (UN 2015, p. 14). Ground-breaking approaches are required to challenge problems that are increasing their interconnectedness and complexity. The UN and its member countries consider partnership as one of the approaches to realise the 17 goals and build a sustainable society.
The partnerships referred to by the UN have shifted their meaning and features from authoritative to co-creative in the last few decades. Harrington (2015) indicates that at the time of the Millennium Development Goals (MDGs), partnerships meant a relatively one-way action from those who had to those who did not, while the SDGs consider that partnerships are ‘forged on mutual terms and on a more equal footing’ for ‘co-creating new knowledge’. The UN Millennium Declaration aims ‘to give greater opportunities to the private sector, non-governmental organizations and civil society, in general, to contribute to the realization of the Organization’s goals and programmes’ (UN 2000, p. 9, italicised by the author). In turn, SDG Goal 17 resolves to ‘[e]nhance the Global Partnership for Sustainable Development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the Sustainable Development Goals in all countries’ and to ‘[e]ncourage and promote effective public, public–private and civil society partnerships’ (UN 2015, p. 27, italicised by the author). The shifting of the verbs from ‘give’ to ‘mobilize and share’ and ‘encourage and promote’ clearly demonstrate the changing stance to prospective partners. The 2030 Agenda also acknowledges that ambitious goals and targets would not be achieved ‘without a revitalized and enhanced Global Partnership and comparably ambitious means of implementation’ (UN 2015, p. 28). It clearly expects the multi-stakeholder partnerships to collaboratively create knowledge to invent the ‘means of implementation’ required to realise its ambitions.
The 2030 Agenda expects that partnerships will create entrepreneurial innovations by combining diverse knowledge and skills which were fostered and accumulated among previously separated entities. Referring to Lange’s (1943) work, Schumpeter (1947, p. 151) defines the characteristics of the entrepreneur, whose activities individually and collectively respond to changes, as ‘simply the doing of new things or the doing of things that are already being done in a new way (innovation)’. For Schumpeter, innovation is a new way of combining existing things. The private sector, which ranges ‘from micro-enterprises to cooperatives to multinationals’, is one of the ‘major drivers of productivity, inclusive economic growth and job creation’ (UN 2015, p. 29). By partnering with diverse stakeholders, including the private sector, the 2030 Agenda aims to foster innovation as a new way of combining and integrating existing knowledge and skills.
This chapter examines the partnership between the public and private sectors to consider their roles in the era of the SDGs. First, it looks at international initiatives to understand the process by which previously separated entities—public and private sectors—gradually became close to each other and started to embark on collaboratively addressing development problems. It then explores the way in which the public sector, such as the Government of Japan and the Japan International Cooperation Agency (JICA), collaborated with the private sector. The chapter concludes by discussing the prospect of partnerships with the private sector for a sustainable future.
2 From Separated Entities to Global Partnerships
The relationship between the private sector and international development has been discussed. According to Black and O’Bright (2016, p. 145), there are two different views on the relationship: first, the private sector and markets are indispensable for development (e.g. foreign direct investment); and second, international development, considered as the arena of the public sector, remediates the disorder caused by profit-making business activities. However, intricately interconnected issues, such as poverty, inequality, and the environment, have been pulling the public and private sectors together.
The United Nations (UN), whose members consist of governments and who lead international development, has changed its relationship with the private sector. In the last decades, with the growing influence of businesses and multinational corporations on countries, the UN has tried to involve the business sector in its activities (Fortin and Jolly 2015). This trend is supported by various initiatives to enhance or restructure the engagement between the two entities.
There has been a longstanding endeavour to control the power of multinationals. Reinert et al. (2016) hold that such an effort can be traced to the late 1960s. A UN panel in 1969 adopted a statement that agreed on the necessity of multinationals’ recognition of host countries’ development direction and ownership. In the late 1970s, the trend of requiring multinationals to consider their behaviour shifted to overseeing the influence of their activities on host countries’ development processes. A UN report based on the findings of a 1972 panel to understand the influence of multinationals on host countries’ policies led to the establishment of the United Nations Commission on Transnational Corporations and the United Nations Center on Transnational Corporations to discuss a code of conduct to control multinational corporations’ activities (Reinert et al. 2016, p. 817). However, despite the UN’s recognition of the necessity of an international action to restrict business practices, especially international businesses, it did not adopt a code of conduct until 1980 (Dell 1990, Ch. 1).
Under these circumstances, the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises were adopted in 1976. The OECD Guidelines are a non-binding, voluntary framework designed to oversee multinational corporations’ behaviour and have been repeatedly revised. In 2000, the Guidelines were significantly revised to ‘reinforce the economic, social and environmental elements of the sustainable development agenda’, by not only adding and expanding issues but also improving the implementation procedures (OECD 2003, pp. 5–6). The latest 2011 revision was based upon consultation with various stakeholders, including non-OECD countries, workers’ organisations, and non-governmental organisations (NGOs) worldwide (OECD 2011, pp. 3–4). The Guidelines cover a wide range of issues (e.g. human rights, employment and industrial relations, environment, consumer interests, science and technology, and taxation) and provide a comprehensive code of conduct and implementation instructions to oversee multinational corporations’ behaviour. According to Reinert et al. (2016, p. 819), the Guidelines are still insufficient because of their lack of ‘real authority’ to implement principles and standards. However, the agreed implementation mechanism through National Contact Points nominated by adhering governments highlights the necessity for ‘a binding commitment’ (OECD 2011, p. 13) among stakeholders from governments to NGOs.
The United Nations has a long history of engagement with non-governmental actors. It can be traced back to 1946 when NGOs, trade unions, and business groups (e.g. the International Chamber of Commerce) received consultative status at the Economic and Social Council (Dodds 2015, p. 5; Fortin and Jolly 2015, p. 45). However, individual corporations were not entitled to be involved in UN consultation processes before the 1990s (Dodds 2015, p. 5; Fortin and Jolly 2015, p. 45). The first conference, which highlighted the roles and responsibilities of nine ‘social groups’, including business and industry, was the United Nations Conference on Environment and Development, which adopted Agenda 21, a non-binding comprehensive action plan to accelerate sustainable development, in 1992 (Dodds 2015, p. 6; UNCED 1992).
The challenge of the UN Global Compact (UNGC) was proposed to world business leaders in the private sector by the UN Secretary-General Kofi Annan at the World Economic Forum in Davos in 1999. The UNGC was his ‘inspiration’ (Sethi and Schepers 2014, p. 198) and was proposed ‘[s]uddenly’ (Williams 2014, p. 243). It is a ‘historic experiment in learning and action on corporate citizenship’ (McIntosh et al. 2004, p. 13). The UNGC consists of ten principles in the four areas of human rights, labour, environment, and anti-corruption.Footnote 1 These principles were created in response to the need to deal with problems brought about by business activities, especially of multinational corporations in less developed countries, and a call for business ethics from both citizens/NGOs and the business circle (Williams 2014, pp. 241–243). The proposal of ‘a genuine compact’ suggested embodying the principles into individual companies’ employees and subcontractors and giving a human face to the global market formed by policy choices after the World War (Annan 1999). It called for correct choices among governments, corporations, NGOs, and international organisations and offered the support of UN agencies to facilitate their dialogues. Accordingly, companies were expected to incorporate the ten principles into their business operations, publicly communicate with their stakeholders about the progress of their operations annually, and provide financial contributions (UNGC n.d.a; Williams 2014, p. 244). If they failed to report progress or meet other criteria, they may be delisted from the initiative (UNGC n.d.a).Footnote 2 As of November 2021, 14,670 companies and 162 countries supported the initiative, and more than 85,000 reports were submitted (UNGC n.d.b). In addition, the UN Guiding Principle for Business and Human Rights was launched in 2011.
Investors who have the power to influence businesses are also regulated. In 2006, the Principles for Responsible Investment (PRI), which consists of the six principles for responsible investment,Footnote 3 was launched to lead investors to take actions concerning environmental, social, and governance (ESG) issues as part of their investment practices. The PRI was developed by the largest institutional investors invited by Kofi Annan and supported by a group of investment experts, international organisations, and civil society (PRI n.d.). The number of signatories increased from 63 in 2006 to nearly 4000 in 2021.
The MDGs were ‘a historic and effective method of global mobilisation to achieve a set of important social priorities worldwide’, which were presented in the form of eight goals (Sachs 2012, p. 2206). The UN Millennium Declaration and the MDGs compiled development agendas among UN specialised agencies and other development agencies (Kumar et al. 2016, p. 1). The Declaration stated its decision to ‘develop strong partnerships with the private sector and with civil society organizations’ for development and poverty reduction (UN 2000, p. 5) and set Goal 8 ‘Develop a global partnership for development’. The MDGs were expected to achieve their goals with the leadership of corporations (including multinational, medium, and small), who had wider networks, technologies, and the capacity to scale-up solutions (Sachs 2012, p. 2211).
In the era of the MDGs, the UN, its funds and programmes, and specialised agencies reinforced activities involving multiple stakeholders, especially the private sector, as their partners to address development issues. For instance, the United Nations Development Programme (UNDP) acknowledged the importance of the private sector for economic growth in various ways (e.g. job creation, tax revenues, and the provision of goods and services for people in need) and created the Growing Sustainable Business (GSB) initiative in 2004 (UNDP 2008b; UNDP and UNGC n.d.). The GSB initiative provided a platform through which the private sector contributed to creating sustainable business models with local partners for vulnerable people (UNDP and UNGC 2008). In 2006, the UNDP also introduced the Growing Inclusive Markets (GIM) initiative to increase awareness of the potential for partnerships among the private sector, government, and civil society. The GIM promoted ‘inclusive business models’, which ‘include the poor on the demand side as clients and customers, and on the supply side as employees, producers and business owners at various points in the value chain’, connecting businesses with people in need of mutual benefit (UNDP 2008a, p. 14). Both initiatives aimed to accelerate the progress of the MDGs (UNDP 2008b). In 2008, together with bilateral donor governments and agencies from the Netherlands, Sweden, Switzerland, and the UK, the UNDP as the secretariate launched the Business Call to Action (BCtA) to encourage companies to develop inclusive business models that include people at ‘the base of the economic pyramid (BOP)’ (UNDP n.d.). More than 280 companies have become BCtA members and have implemented inclusive businesses worldwide (UNDP n.d.). Their activities in diverse areas, from agriculture and health to energy, service, and media, are showcased on the BCtA platform, together with tools and resources (BCtA n.d.). Thus, along with partners, the UNDP has actively brokered inclusive businesses to pursue win–win solutions for both business and development issues.
The International Finance Corporation (IFC) has encouraged inclusive businesses. Since 2005, the IFC has been promoting and supporting inclusive businesses through their investment and advisory activities across various sectors, in which ‘[b]y integrating the “base of the economic pyramid” into value chains as suppliers, employees, distributors, retailers, and customers using commercially-viable methods, the private sector can foster opportunity, expand access, and improve lives through solutions that are sustainable, replicable, and scalable’ (IFC n.d.b). Moreover, in 2015, the IFC led to the formation of the G20 Inclusive Business Framework and urged leaders of the public and private sectors, international organisations, and civil society to enhance businesses’ abilities and include low-income populations into global value chains (IFC 2021; see also IFC n.d.a).
In 2015, the UN General Assembly adopted the 2030 Agenda and the SDGs by involving both developed and developing countries and expanding the scope more holistically than the MDGs. The 2030 Agenda states that multi-stakeholder partnerships complement a revitalised Global Partnership for Sustainable Development by sharing ‘knowledge, expertise, technology and financial resources, to support the achievement of the Sustainable Development Goals in all countries’ and promoting ‘effective public, public–private and civil society partnerships’ which bring their experiences and resourcing strategies (UN 2015, p. 27). Multi-stakeholder partnerships are ‘an important means of implementation’ in the realisation of the SDGs (Beisheim and Simon 2016, p. 9), and the private sector is considered ‘a development actor’ (Scheyvens et al. 2016). Thus, the UN and its related organisations in the public sector have been advancing their engagement with the private sector, as well as other stakeholders.Footnote 4
Business models that include vulnerable populations have gained the attention of both international donors and business communities. Since the late 1990s, Prahalad and Hart (2002)Footnote 5 and their colleagues (Prahalad 2004; Prahalad and Hammond 2002) have identified the potency and opportunity of the markets of the BOP, the largest and poorest socio-economic group in the world economy. The concept of the BOP markets has evolved: BOP 1.0 focuses on selling products to the BOP population; BOP 2.0 views the BOP population as business partners for co-creating markets through dialogue and mutual learning; and BOP 3.0 creates a social, economic, and environmental ecosystem for all (Cañeque and Hart 2015; Simanis et al. 2008). On another business front, the idea of corporate social responsibility (CSR) has been developed to incorporate social issues in core business activities. CSR, which comprises the voluntary, philanthropic concerns of firms regarding the socio-economic impact of their activities, was practiced even a century ago, and was revived in the 1960s and 1970s (Vogel 2006, p. 6). CSR has become well recognised in business circles and society. In India, CSR became a mandate for companies in 2013. The concept of ‘Creating Shared Value’ has furthered the notion and reinforced companies to shift their voluntary behaviours as risk management to a more mandatory one as the utilisation of business opportunities to jointly create values with a community (Porter and Kramer 2011). Therefore, the business circle increasingly sees the lower segment of the economic pyramid as business partners or stakeholders.
Simultaneously, fair trade movements with various labelling initiatives have gradually promoted alternative business models to include vulnerable people, especially those from less developed countries, into global markets. Many initiatives, including Fairtrade International, have been introduced to certify commodities from agricultural products to handicrafts. The fair trade movement and related networks are expanding and creating partnerships among stakeholders, including consumers. In the global capitalist market, ‘the fairtrade moral economy attempts to assert the principle of peoples’ basic right to live a decent life free from hunger and poverty’ (Fridell 2006, p. 90).
Other initiatives also try to control business influence by introducing practical guidelines and standards. For instance, the Global Reporting Initiative (GRI) exhorts companies and organisations to make their activities transparent. The GRI was formed in 1997 in protest against the environmental damage caused by the 1989 Exxon Valdez oil spill (GRI n.d.). In 2000, the GRI provided guidelines to produce sustainability reports covering the environmental, economic, and social aspects of their activities. The GRI Guidelines are linked to other guidelines and principles (e.g. the OECD Guidelines, UNGC). The International Organization for Standardization (ISO) published ISO26000 in 2010 after negotiating with various stakeholders, such as governments, NGOs, industry, consumer groups, and labour organisations globally for five years (ISO n.d.). ISO 26000 guides companies and organisations to take appropriate actions concerning their social responsibilities. In addition, the recent growing popularity of ESG investing and others (e.g. socially responsible investing and impact investing) increasingly influence investors’ behaviours.
Thus, the circumstances surrounding international development and businesses have changed over the last few decades. The number of stakeholders is increasing, which contributes to addressing development issues in unconventional, innovative ways to gather their knowledge and resources.
3 Partnerships with the Private Sector in Japan
In Japan, the relationship between development challenges and businesses has been keeping pace with international trends. This section examines how Japan has incorporated business approaches into its international cooperation to address development issues. It explores JICA’s activities after considering how the Government of Japan and related organisations have promoted business approaches for development.
3.1 The Government of Japan, International Development, and the Private Sector
Japan’s official development assistance (ODA) policy was stated in the 2015 Official Development Assistance Charter (ODA Charter).Footnote 6 Believing in Japan’s past development experience and cooperation for the development of Asia and other areas through economic growth, the ODA Charter (GOJ 2015, p. 1) highlights the importance of partnerships with various actors as follows:
In the international community today, a huge amount of private funding flows to the developing countries, and various actors including the private sector, local governments, and non-governmental organizations (NGOs) are involved in global activities. These actors play important roles in dealing with development challenges and promoting sustainable growth in developing countries. Under these circumstances, Japan needs to address such development challenges not only through ODA but also by mobilizing various other resources.
It also emphasises the role of the government as a ‘catalyst’ to enhance partnerships with various actors (GOJ 2015, p. 12).
In 2016, the SDGs Implementation Guiding Principles were approved by the SDGs Promotion Headquarters, which had been established to promote comprehensive and effective implementation of the SDGs through close coordination with relevant government agencies. The Guiding Principles set five principles, one of which is ‘participatory approach’ for all stakeholders to play a role in building a sustainable society (SDGs Promotion Headquarters 2019, Sec. 4, [3]). Its 2019 revision stated that the role of business was first among the other actors, and the words ‘conventional corporate social responsibility (CSR)’ disappeared. In turn, the Guiding Principles exhort ‘each company to strive for sustainable corporate growth by installing the SDGs within its corporate strategy and applying them to individual business strategies’ (SDGs Promotion Headquarters 2019, Sec. 5, [3], A). This statement indicates the expectation that development agendas, rather than charitable activities, will be embodied into corporations’ core businesses. The Government of Japan organises the annual Japan SDGs Awards to acknowledge companies and organisations based in Japan that contribute to the SDGs within and beyond the country (MOFA n.d.).
There was active discussion about the BOP business for development through business approaches in the late 2000s. Ministries, such as the Ministry of Economy, Trade, and Industry (METI) and the Ministry of Foreign Affairs (MOFA), and organisations, such as JICA and the Japan External Trade Organization (JETRO), started discussing or taking initiatives to promote the BOP business in 2009, called ‘the first year of BOP business in Japan’ (Hiramoto and Watanabe 2015, p. 194; Sugawara et al. 2011). They conducted a number of research and feasibility studies, dispatched missions, provided matching support with stakeholders in developing countries, and established the Japan Inclusive Business Support Center, thus aiming to address poverty reduction through businesses and industrial policies (Sugawara et al. 2011). For instance, METI supported ten surveys in 2009, JICA implemented 19 survey projects in 2010, and JETRO supported 19 projects in 2011 (Hiramoto and Watanabe 2015, p. 194). The Ministry of the Environment, the Ministry of International Affairs and Communications, and the Japan Bank for International Cooperation also implemented related projects (Hiramoto and Watanabe 2015, p. 194).
In the 2011 Tohoku Pacific Ocean earthquake, the products and technologies that some Japanese companies (e.g. Panasonic, Nissin Foods, and Nippon Ply-Glu) had been innovatively created through their BOP businesses supported disaster victims and restored the affected areas (Hiramoto and Watanabe 2015). This experience raised people’s awareness and that of the Government of Japan about the potency of such technologies and products, which are adaptable in addressing various social issues (Hiramoto and Watanabe 2015, p. 195).
This movement started a decade later in Japan than in other major bilateral donor countries. According to Sugawara et al. (2011), the UK, Germany, and the US began collaborating with the private sector around 2000. For instance, in the US, the United States Agency for International Development (USAID) launched the Global Development Alliance, a partnership with the private sector to foster market-based approaches to challenge development issues, and the Development Innovation Ventures, an open innovation grant fund for innovators, entrepreneurs, and researchers to explore new ideas to solve development challenges, in 2001 and 2010, respectively (USAID 2021). USAID has expanded its cooperation with the private sector and currently provides eight partnership opportunities for corporations (USAID 2021). In the UK, the Department for International Development (DIFID)Footnote 7 has launched several ‘challenge funds’ to assist development projects in collaboration with the private sector since 1999 (Sugawara et al. 2011, pp. 45–47). In 2010, DFID also implemented the Business Innovation Facility, a three-year pilot project to help develop inclusive business models with companies in Bangladesh, India, Malawi, Nigeria, and Zambia. According to Sugawara et al. (2011, pp. 50–54), in contrast with these bilateral donor countries where each organisation has individually implemented its funds or programmes, a unique characteristic of Japan’s BOP business support is the close cooperation between ministries and implementing agencies, such as METI and JETRO, and MOFA and JICA.
In Japan, the number of support systems that help businesses address development issues has increased. As of 2019, a report identified about 50 support systems provided by ministries and other public organisations (JICA 2019b, pp. 5–6). Some systems directly support (including finance) business activities in different stages, such as information gathering, business plan formulation, feasibility studies, and specific business development, while others provide business-related information. For instance, since 2015, METI has organised the Tobidase Japan ProgramFootnote 8 annually and invited business ideas from mid-ranking enterprises and small- and medium-sized enterprises (SMEs). Through the programme, METI subsidises selected enterprises with part of the expenses to develop, test, and/or evaluate their products and services in collaboration with local universities, research institutes, NGOs, and companies, among others, in emerging countries, especially India and African countries (METI 2021).
In addition to these support systems, the Government of Japan has created opportunities to enhance dialogue among diverse development partners, including the private sector. For instance, since 1993, it has organised a multilateral forum, the Tokyo International Conference on African Development (TICAD), which is co-hosted by the UN, the UNDP, the World Bank, and the African Union Commission. Its participants vary from African countries to various stakeholders, such as international organisations, partner countries, corporations, and civil society organisations for development in Africa. With respect to African countries’ ownership, the TICAD promotes international partnerships and discussions on development issues in Africa by ‘bringing together a broad range of global knowhow and efforts of the international community’ (MOFA 2016). The Yokohama Declaration 2013 adopted in the TICAD V set ‘Promoting Private Sector-led Growth’ as a strategic approach for African development (MOFA 2013, Sec. 3.1). In the TICAD VII in 2019, there were more than 10,000 participants, including leaders from African countries, development partner countries, international and regional organisations, NGOs, and the private sector. The TICAD VII strongly highlighted business promotion for the development of African countries. Through the TICAD and related opportunities, the Government of Japan has also sought to improve circumstances that encourage companies to start businesses in Africa by, for instance, launching the Japan-Africa Public–Private Economic Forum in the TICAD VI, establishing the Japan Business Council for Africa, and launching the Bilateral Committee on Improvement of Business Environment with seven African countries in the TICAD VII (MOFA 2021). These movements have contributed to improving business environments in Africa for Japanese companies and enhancing African development through businesses by mobilising the resources of various actors, including the private sector.
3.2 JICA and the Private Sector
JICA has been strengthening its relationship with the private sector since the late 2000s. It established the Office for Private Sector Partnership to promote collaboration with the private sector in 2008, which was later upgraded to the Private Sector Partnership and Finance Department to strengthen partnerships with the private sector through consultation and understanding its needs.
JICA currently provides various support schemes. For instance, the Private-Sector Investment Finance (PSIF) scheme provides loans and equity mainly for infrastructure development, poverty reduction, and measures against climate change, and its preparatory survey helps to identify and formulate PSIF projects. The SDGs Business Support Surveys consist of three schemes to support private corporations in the different stages of creating and developing their business models: the SME Partnership Promotion Survey helps SMEs explore a business model through basic data collection and analysis; the SDGs Business Model Formulation Survey with the Private Sector supports companies to examine the feasibility of their business ideas (e.g. technologies, products, and know-how); and the SDGs Business Verification Survey with the Private Sector assists companies in validating their business ideas and models to develop business proposals (JICA 2020a). The Surveys support both less developed countries, who want to address development issues they face, and companies, who desire to develop their business models incorporated in partner countries’ challenges and assess the adaptability of the latter’s models as ODA projects. JICA acts as a catalyst to connect them and create mutually beneficial relationships by mobilising its established networks and relationships with the governments of less developed countries, and the expertise accumulated from past ODA projects (JICA 2020a). The provision of these schemes was driven by both international and domestic circumstances—the further involvement of companies to deal with increasingly intricate issues due to globalisation with the limited ODA and the political decision to revitalise Japan’s regional economy by promoting SMEs (JICA 2019a, pp. 141–142).
The JICA website presents many examples of the SDGs Business Support Surveys (JICA n.d.b). For instance, in Uganda, JICA assisted in the promotion of handwashing led by Saraya Co., Ltd. (Saraya), which manufactures and sells health and hygiene products and services. Saraya has been working with the United Nations Children’s Fund since 2010 to solve hygiene issues in Uganda since 2010. JICA supported Saraya to expand its activities to medical institutions and workers. JICA also supported Ajinomoto Co., Inc. (Ajinomoto), a Japanese food and biotechnology corporation, to improve nutrition for infants in Ghana. Ajinomoto, which started the Ghana Nutrition Improvement Project as their 100th anniversary project, has developed, locally produced, disseminated, and sold ‘KOKO Plus’, a baby food supplement, in collaboration with the Government of Ghana, universities, international aid agencies, JICA, and NGOs, among others. JICA’s collaboration with Kaiho Industry Co., Ltd (Kaiho Sangyo), a Japanese automobile recycling company, is multifarious (JICA n.d.c). Kaiho Sangyo collaborated with JICA and provided a technical training course for automobile recycling for trainers from South American countries in 2010. They also conducted a preparatory survey of the feasibility of an automobile recycling business in Nigeria and implemented a pilot survey to disseminate an environmentally conscious automobile recycling system by establishing a pilot plant and recycling education centre with a partnership with the Federal Center of Technological Education of Minas Gerais, Brazil (JICA and Kaiho Sangyo 2019). From 2010 to 2020, JICA’s programme of the SDGs Business Support Surveys approved more than 1340 business proposals (JICA 2021a, p. 53).
JICA is expanding its assistance by promoting entrepreneurship, particularly in Africa. Several projects have been launched to accelerate the emergence of social entrepreneurs. In Rwanda, which aims to attain socio-economic development using ICT, JICA launched the ICT Innovation Ecosystem Enhancement Project in 2017 to support the creation of innovative solutions for addressing social problems by collaborating with companies, entrepreneurs, financial and research institutions, universities, and the government. Under this project, the ‘250 Startups’ programme, whose objective is to incubate ICT companies that are market competitive, was implemented together with the Rwanda ICT Chamber. It orients prospective entrepreneurs to develop their businesses (e.g. in customer acquisition, setting up business models, product development, finance, and legal issues) (JICA 2020b). In Kenya, JICA introduced a startup support project, the Next Innovation with Japan (NINJA) in 2020 (JICA n.d.f). Project NINJA aims to accelerate innovation, which meets local needs and creates novel businesses for socio-economic development. Its implementation is supported by private sector partners, such as the Double Feather Partners (an international venture capital firm), Deloitte Tohmatsu Financial Advisory LLC, Deloitte Tohmatsu Venture Support Co., Ltd., and GrowthAfrica (a leading African accelerator and advisory firm). Project activities vary from the provision of acceleration and incubation programmes to identify and foster ventures and the organisation of business contests, to policy recommendations. In the NINJA Business Plan Competition in Response to COVID-19 held in February 2021, more than 2,700 ventures from 19 countries participated, of which 69 ventures from wide-ranging industries, including medical care, agriculture, logistics, education, and finance, were recognised for the excellence of their businesses, and the top ten participated in the final pitch as finalists (JICA 2021b). For the three selected finalists, JICA provided business matching opportunities with companies in Japan. Various partners in Japan, including Keidanren (Japan Business Federation), support these programmes and projects to foster startups in Africa.Footnote 9
Nevertheless, business approaches to address development issues are not a novel concept for JICA. JICA previously provided support for industrial development, such as the improvement of the investment environment, industrial human resources development, SME support, technology development, research cooperation, and financial support to develop the private sector in recipient countries (Sugawara et al. 2011, pp. 53–54). The 2015 ODA Charter (GOJ 2015) explains that the emphasis on industrial development reflects Japan’s post-war development experience. JICA has been transferring knowledge and skills accumulated in Japan through various technical cooperation schemes, such as dispatching experts, providing technical training (The Knowledge Co-Creation Program: KCCP), technical cooperation projects and programmes, and technical cooperation for development planning (JICA 2020a, pp. 68–69). JICA has dispatched experts from Japan and other countries to transfer best-suited knowledge and skills in various areas to meet the needs of recipient countries. The KCCP, which started in 1954, covers diverse subjects from agricultural techniques to local government systems. JICA implements hundreds of training courses annually, in which approximately 10,000 trainees participate. The KCCP is supported by various partners, such as the central and local governments, public organisations, universities, research institutes, companies, and NGOs in Japan. In 2020, 256 courses (group and region focus), including online courses, were implemented, of which 23 courses covered private sector development (JICA n.d.d). In 2021, approximately 30 courses related to private sector development were planned. Since its launch, the KCCP has hosted approximately 370,000 participants. Moreover, since 1975, JICA has been promoting South-South and Triangular Cooperation by assisting less developed countries in dispatching experts and implementing training programmes in many subjects, including private sector development (JICA 2018). South-South cooperation is expected to enhance ties by sharing knowledge and skills among less developed countries. In triangular cooperation, external actors, such as international and bilateral donors, assist their mutual support relationships. To enhance science, technology, and innovation and support capacity building through partnerships, SDG Goal 17 highlights South-South and Triangular Cooperation. In addition to these technical cooperation schemes, JICA has established ten Japan Centers in transitional economies in East and Central Asia and Southeast Asia since 2000, to provide business training and foster human networks between them and Japan (JICA n.d.a).
JICA has also helped develop the private sector through various technical cooperation projects and programmes, which combine expert dispatching, technical training, and equipment provision to address various development issues faced by recipient countries. For example, JICA supports strengthening the competitiveness of companies by improving management capabilities, knowledge, and skills (JICA n.d.e). It has promoted kaizen, which is defined as ‘[a] Japanese business philosophy of continuous improvement in working practices, personal efficiency, etc.’ in the Oxford English Dictionary. According to Sonobe (2018, p. 4), ‘Kaizen is the management philosophy and know-how that brings about continuous, participatory, incremental, and low-budget improvements in quality, productivity, cost, delivery, safety, morale, and environment’, and it is ‘human-friendly’. Kaizen was rooted in the US and developed in Japan. It has been applied in manufacturing and other areas, such as health, education, public administration, and other services (Sonobe 2018, p. 4). Kaizen consists of various tools, systems, methods, and principles, such as total quality management as a system and 5S (seiri [sort], seiton [set in order], seiso [shine], seiketsu [standardize], and shitsuke [sustain]) as a method among others (Sonobe 2018). In JICA, kaizen was first introduced in the Productivity Development Project in Singapore in 1983 and Thailand in 1994 (Jin 2018, p. 33). Malaysia adopted kaizen without assistance from JICA. Since then, JICA has transferred kaizen knowledge and tools to other countries and regions, such as Latin America, Eastern Europe, the Middle East, and Africa, which has made kaizen ‘a symbolic know-how’ to lead their industrial development (Jin 2018, pp. 33 and 43–45). Kaizen in the private sector was transferred to less developed countries through technical cooperation in the public sector (Jin 2018, p. 43, Table 2.2).
Since around 2000, JICA has also promoted the creation and fostering of local industries to address issues of poverty and socio-economic disparity within a country, for instance, using the concept of the One Village and One Product (OVOP) movement. The OVOP movement, which originated from a local development activity in Oita Prefecture, Japan, in 1979, encourages the mobilisation of local community members, materials, and cultural resources to create value-added products and services for domestic and external markets. The OVOP concept has been adopted by many countries through the local diplomacy of Oita Prefecture since the mid-1980 (International OVOP Exchange Committee n.d.; Matsui 2006, p. 145). Simultaneously, the Government of Japan has promoted the OVOP movement approach for development, and JICA has applied it to projects and programmes. For example, in 2003, the Government of Malawi adopted the OVOP concept in its official development plan, aimed at the economic development of rural communities and the realisation of the MDGs (Kurokawa et al. 2010, p. 20). Prior to the adoption, however, Japan and JICA had supported Malawi for about ten years: they had introduced the OVOP movement to invited foreign missions and trainees, including those from Malawi (Yoshida 2006, pp. 180–183). Yoshida (2006, p. 180) indicates that the TICAD, especially the TICAD I, provided opportunities for Malawi to learn about the OVOP movement. In 1993, the Ambassador of Malawi to Japan was keenly interested in the OVOP movement when he visited Oita immediately after the TICAD I. Subsequently, the Malawi Embassy started to research it, and several ministers of Malawi also learned it in Oita on the occasions of the TICAD and others. The prefecture government of Oita was passionate about promoting the movement in Malawi and dispatched missions independently and together with a JICA mission. JICA training programs, which continuously introduced cases of the OCOP movement, also provided a learning opportunity for trainees from Malawi. For instance, in 1999, 14 government administrators from Malawi participated in the regional development training program implemented in Oita (Yoshida 2006, p. 181). JICA also dispatched experts and implanted a pilot project in Malawi before its government started the OVOP program as a national program in 2003. Japan and JICA’s long promotion and dissemination of the OVOP concept extended it to Malawi and other countries for industrial and community development by mobilising local resources and adding value to them. The Government of Japan declared its commitment to support OVOP programs for African development in the TICAD IV and meetings of the G8 countries in 2008 (Kurokawa et al. 2010, p. 3). As of 2010, 12 African countries adopted the OVOP approach (Kurokawa et al. 2010, p. 3). Moreover, JICA projects that incorporated the OVOP approach collaborated with companies. For instance, in Kyrgyzstan, a JICA project aimed at community development through the OVOP approach has collaborated with Ryohin Keikaku Co., Ltd. (MUJI) since 2010. MUJI has supported the development of Kyrgyz felt products and expanded sales channels by providing knowledge and skills derived from its global business experience.
The OVOP approach has also been adopted by other organisations. For instance, JETRO utilises the OVOP movement to address development issues. In collaboration with METI, JETRO started the ‘One Village, One Product’ campaign to support less developed countries to enhance their capacity to export by identifying and adding values to local products after the Government of Japan had announced the campaign as part of Japan’s ‘Development Initiative for Trade’ at the WTO Hong Kong Ministerial Conference in 2005 (JETRO n.d.; METI 2015). JETRO set up two ‘One Village, One Product Markets’ at the Narita and Kansai International Airports to promote products from Asian and African countries, among others, including those that JETRO had helped develop and improve for the Japanese market (JETRO n.d.).
These activities indicate that JICA has promoted business approaches for development in collaboration with diverse partners, aligning with Japan’s ODA Charter and the SDGs Implementation Guiding Principles. Previously, JICA’s business approach for development applied the knowledge and skills developed by other entities, such as kaizen in the industrial sector and the OVOP movement led by the local government, to different countries, which faced similar problems in the industrial sector and local development. JICA rarely supported specific companies directly. However, in the last decade, JICA’s collaboration with the private sector has become more systematic, such as the introduction and promotion of the BOP business and the SDGs Business Support Surveys, through which JICA began supporting companies to address development issues. Consequently, the types and quantity of collaboration with the private sector are increasing, involving individual companies and other partners. The 2030 Agenda and its promotion of partnerships with multiple actors, including the private sector, seem to have become a driving force to hasten this trend.
4 The Roles of the Public and Private Sectors
Partnerships with the private sector are firmly incorporated in the current development agenda, and the promotion of business approaches for development is an international trend, including in Japan. The Government of Japan and related organisations have promoted businesses to address development issues. The growing expectation of the private sector as a development partner is a response to increasingly intricate issues in the connected world. The limitations of individual institutions or countries in addressing complex development issues are widely recognised. Simultaneously, corporations are compelled to respond to socio-economic pressures to deal with problems caused by their business activities. Multi-stakeholder partnerships, including the private sector, are indispensable in realising a sustainable society. The 2030 Agenda states that ‘[w]e will foster a dynamic and well-functioning business sector, while protecting labour rights and environmental and health standards in accordance with relevant international standards and agreements and other ongoing initiatives in this regard’ (UN 2015, p. 29). However, the question remains whether it is possible to harness the private sector, particularly large international corporations, whose value chain spreads across national boundaries to develop the best-profitable business models.
Studies reveal that the relationship between development and the private sector is ambivalent and uncertain. Reviewing conditions, which have fostered their complementary relationship, Black and O’Bright (2016, p. 146) acknowledge that the partnership with the private sector for development has become ‘the new landscape of development’. On the other hand, they identified the risks that business approaches might introduce, and the ambiguity of such a relationship, as, for instance, microcredit has become a poverty trap due to the accumulation of small debt despite its original intention of supporting people to start small enterprises to improve their lives (Black and O’Bright 2016). Rai et al. (2019) claim that SDG Goal 5 (gender equality and empowerment of women and girls) contains frictions with Goal 8 (sustainable economic growth and decent work for all), whose focus on economic growth dismisses women’s social productive work. Currently, it is unclear and ambiguous regarding the extent to which diverse partners could balance their different interests and primary motivations—for instance, socio-economic development of public sector entities and market-oriented benefits of private sector entities—by challenging internal tensions within the goals, or development agendas more generally.
The existing literature also raises the issue of ‘washing’, which is seen in corporate behaviours as a management strategy for increasing reputation. Such behaviours are described as greenwashing, bluewashing, and rainbow-washing/SDG-washing in association with environmental concern, UN’s blue flag, and the SDGs’ colourful logos, respectively. For instance, bluewashing is an issue related to the UNGC (Fortin and Jolly 2015, p. 52). A statistical analysis of 3000 U.S. firms by Berliner and Prakash (2015) reveals that the firms’ human rights and environmental performance, with which the UNGC is concerned, tend to be only superficial management of the impression of considering these issues for bluewashing, avoiding substantial and costly actions. Haras-Saizarbitoria et al. (2021) conduct empirical research on how organisations worldwide engage with the SDGs and the 2030 Agenda by exploring more than 1300 sustainability reports. They find that ‘[m]ost of the companies analyzed were very evasive or silent about their approach to tackling the SDGs in their reports. And when an explicit reference was made, a rather simple functionalistic and deterministic discourse, without references to any meaningful reflection, was presented’ (Heras-Saizarbitoria et al. 2021, p. 10). The companies do not go beyond their CSR and lack substantial operation in relation to the SDGs, which consequently appears as ‘SDG-washing’ and indicates the weakness of self-regulatory initiatives (Heras-Saizarbitoria et al. 2021). These studies suggest that the extent to which non-binding initiatives, such as the UNGC and the SDGs, could balance the public and private sectors' interests is uncertain.
Nevertheless, the current global trend of highlighting partnerships to address development issues should not be devalued. International organisations have introduced many initiatives, such as the OECD Guidelines, the UNGC, the GRI, the ISO26000, the UN Millennium Declaration, the MDGs, the 2030 Agenda, and the SDGs, among others, and created the circumstances in which corporations feel persuaded to improve their accountability and transparency. These initiatives supported by countries, including Japan, have provided grounds to include the private sector in development practices, thereby fostering the morality of corporate behaviours. For instance, the UNGC offers a forum where various partners ‘can come together to discuss the changing role of business and the moral norms needed for a more just global economy’ (Williams 2014, p. 250). The 2030 agenda and the SDGs offer similar forums. Beisheim and Simon (2016, p. 7) state:
All in all, there needs to be a balance between nurturing and oversight, enabling and ensuring measures. Engaging potential partners as well into emerging and existing MSPs [multi-stakeholder partnerships] is critical to increase awareness of the 2030 Agenda and SDGs. Enabling MSPs to align their goals with the SDGs and to actually achieve impact may require support at various levels. Ensuring measures may encompass principles and guidelines, reporting duties and reviews.
The creation of effective multi-stakeholder partnerships seems to be a long process. However, while individuals are connected through globalisation and technological development, it is unlikely that the current trend may waver.
Innovative business models to address development issues are emerging and increasing in number. The UN and its related institutions are promoting inclusive businesses to challenge diverse issues in collaboration with companies and other partners. Their reports and platforms, such as the BCtA, present these business models, which help both members and non-members learn from each other and create networks. The Government of Japan and JICA have assisted the development of countries in need, utilising the knowledge and skills fostered in the private and other sectors. The Government of Japan reinforces its position to help create an enabling environment by promoting partnerships among stakeholders, revising the ODA Charter, and organising international conferences. Since around 2010, JICA has directly collaborated with companies to address development issues and support the creation and incubation of novel business models in less developed countries. Non-profit organisations and foundations also aid prospective and existing social entrepreneurs by organising business contests and workshops to promote domestic/international development through business approaches.
Additionally, the private sector continues to search for a better balance between business activities and social benefits. A growing number of companies, from large international corporations to SMEs, declare their commitments to increase the sustainability of society. The members of a company and their ideas are diverse, which makes the outcomes and continuity of its commitments uncertain. Social enterprises might not sustain their primary social missions. However, a shifting international environment towards creating a sustainable society makes us believe in its persistence to some extent. The Nihon Keizai Shimbun (Japan Economics Newspaper) (Nikkei 2021) reports that the number of its articles containing the term ‘ESG’ have sharply increased since 2015, which indicates the growing concern about non-economic aspects of business activities among its buyers, most of whom are white-collar workers and managers. These movements suggest that companies gradually feel obliged to shift the management of their core businesses to consider social benefits by balancing economic benefits.
The private sector is an indispensable partner in challenging complex issues in the current interdependent and interconnected world. Blowfield and Dolan (2014, pp. 23–24) investigate if a business could be a ‘development agent’, who ‘consciously seeks to deliver outcomes that contribute to international development goals’, rather than an irresponsible ‘development tool’ for outcomes despite actively conducting business in developing countries. Finding the mixed features of companies’ performance, they indicate the necessity of institutional environments (e.g. alternative forms of finance, incubation) required to make business a conscious and accountable agent of development (Blowfield and Dolan 2014). Under appropriately developed institutional environments surrounding businesses, the private sector would address needs in less developed countries with the understanding of influential shareholders.
The public sector could support creating an enabling environment as a catalyst to encourage the private sector to act as a ‘development agent’, and not as a ‘development tool’ by promoting continuous dialogues among stakeholders with respect to existing non-binding initiatives. It would foster alternative socio-economic mechanisms to nurture and develop novel business models with economic and social benefits. Moreover, the public sector, such as international organisations and individual governments, is expected to oversee partnerships with the private sector to ensure its positive influence on society.
5 Conclusion: Partnerships as an Approach for the Co-creation of Innovation
The development circle has been expanding its membership and including the private sector, to improve the effectiveness of addressing development issues. In the process, partnerships with the private sector have become highlighted in international initiatives, such as the MDGs and SDGs. The UN and its related institutions have provided platforms to accelerate it. Individual countries and their organisations, such as the Government of Japan and JICA, have also promoted this trend by offering various programmes and projects. These efforts have supported corporations to step forward with or without other partners to create new business models, which are often innovatively formed by the existing knowledge and skills among stakeholders to challenge the issues faced by people living in less developed countries.
As the 2030 Agenda states, partnerships with multiple stakeholders, including the private sector, are an approach to solve problems through sharing resources. Partnerships could make all stakeholders responsible, work collaboratively, and increase the efficiency of challenging development issues to realise a sustainable society. Consumers who purchase goods and services are also responsible as partners for their global goals. These multi-stakeholder partnerships might not be a perfect approach for achieving the SDG goals, but without them, the 2030 Agenda would not be realised. The partnerships with the private sector and other stakeholders promote the combination of existing things and stimulate innovations (Schumpeter 1947) to find solutions for development issues brought about by existing socio-economic systems. The co-creation of innovative and novel ways through the effective ‘participation of all countries, all stakeholders and all people’ (UN 2015, p. 2) would contribute to transforming our world to become more sustainable.
Notes
- 1.
The principle of anti-corruption was added in 2004.
- 2.
As of 2014, over 4,000 companies were delisted because of failure to report progress (Williams 2014, p. 244).
- 3.
For instance, Principle 1 states that investors incorporate ESG issues into their analysis and decision-making, while Principle 2 requires that they actively incorporate the issues into their policies and practices. For more details, please see: https://www.unpri.org/pri/about-the-pri.
- 4.
- 5.
Prahalad and Hart (2002, p. 14) mention that their first articulation of the BOP concept was in 1998.
- 6.
The ODA Charter was decided by the Cabinet in 1992 and revised in 2003 and 2015.
- 7.
DIFID was replaced by the Foreign, Commonwealth & Development Office in 2020.
- 8.
The IC Net Limited operates the program as a subsidized entity.
- 9.
JICA and Keidanren published the ‘Co-creating Digital Development to Achieve Society 5.0 for SDGs’ in 2020, which aims to foster innovative solutions for less developed countries by using digital technologies developed by Japanese companies (Keidanren and JICA 2020).
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Shimoda, Y. (2023). Towards the Creation of Effective Partnerships with the Private Sector for Sustainable Development. In: Urata, S., Kuroda, K., Tonegawa, Y. (eds) Sustainable Development Disciplines for Humanity. Sustainable Development Goals Series. Springer, Singapore. https://doi.org/10.1007/978-981-19-4859-6_10
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