How to build a society that leverages inclusivity as its strength

—Challenges for Individuals, Businesses, Society, and Marketing—

How can we achieve social inclusion (inclusion) for all people, including those perceived as socially vulnerable or minorities?
This recurring theme has now seen a noticeable shift: instead of leaving solutions to the public sector or NPOs, businesses are increasingly approaching it through their core operations. We asked two leaders at the forefront how companies should understand diversity and inclusion.
Table of Contents
▼Solving Social Issues Becomes Business
▼A Society Where Diverse People Gradually Add Value
▼Business Supporting Disability
▼Can Universities Become New Communities?
▼Changing Organizations Starts with Top-Level Volunteering
▼Changing Social Awareness Through Dialogue

Solving Social Issues Becomes Business

Hayashi: Today's theme is Diversity & Inclusion. Social issues like these were previously discussed within companies in the context of social contribution or CSR, often treated as matters outside the core business. However, the tide is turning. We are entering an era where a more active and strategic approach within the core business itself is increasingly required. What are your thoughts, Professor?

Noda: Globally, solving social issues through business is already commonplace. When Japanese corporate executives see the SDGs (the international goals for 2016-2030 outlined in the 2030 Agenda for Sustainable Development adopted at the UN Summit in September 2015), their reaction is often, "Wow, there are so many social challenges, that must be tough." But people globally, especially in European companies, see them and their eyes light up—no, they get a gleam in their eyes. They see it as a business opportunity. The SDGs include 17 goals and 169 targets, specifically citing social challenges like traffic congestion in Dar es Salaam. The question is: when you see this, do you think about tackling it with government aid, or do you think about tackling it through business? It's not exactly Michael Porter's CSV (Creating Shared Value), but globally, the latter is now mainstream.

Hayashi: Is there a particular reason why European companies, among others globally, are especially enthusiastic about solving social issues?

Noda: When becoming a company focused on solving social issues, what's crucial is seeing and feeling the situation on the ground. In that regard, European companies likely had more opportunities to observe developing countries compared to firms from other regions. Beyond their historical colonial ties, Europe has a small and mature market. They had no choice but to look outward and actually go to the field. Consequently, they probably became more aware of various social issues locally.

Hayashi: On the other hand, I think Japanese companies have historically lacked the mindset to actively turn social issues into business opportunities. Is this a cultural thing?

Noda: No, Japan actually had many companies in the past that tried to solve social issues through business. Take Yakult, for example. Before the war, Japan had poor nutrition, and many children suffered from dysentery, specifically amoebic dysentery, which can be fatal. This was a clear social issue needing resolution. Dr. Minoru Shirota, wanting to address this, researched lactic acid bacteria and discovered the Shirota strain, known for its strong sterilizing power. However, children found it hard to swallow the tablets. This led to the development of Yakult, which has grown into a major business now widely distributed across Southeast Asia.

Another notable example is Kao. Guided by its corporate philosophy, "A clean nation prospers," Kao grew by tackling the challenge of providing clean living for its citizens. Business is inherently suited to solving social issues, and this remained true in Japan. While recent Japanese people have become accustomed to taking the easy way out and thinking less, they should actually be skilled at solving social problems. It's time to return to our roots.

Hayashi: Japan has many companies over 100 years old. I believe these companies originally built their businesses on a social vision of improving Japan as a nation. However, today's employees grew up in a peaceful, affluent country, so the social issues the founders once tackled often feel less real to them. As a result, even if the original vision remains stated as a principle, a different concept—protecting employees' jobs and their families' livelihoods—tends to be prioritized. For Japanese companies to turn social issues into business opportunities, I believe it's crucial to figure out how to identify new challenges and how to match them with their own assets.

Noda: Exactly. It's extremely dangerous when companies become so preoccupied with protecting jobs that they fail to look elsewhere. Companies are like clowns on a tightrope. If they stop moving, they fall. Whether large or small, they must have a sense of crisis that they will die if they don't keep changing.

Japan is a country brimming with challenges, albeit of a different nature than developing nations. What politics can do about this is limited. It's truly regrettable that companies, who should be the vanguard in solving these issues, often lack this awareness.

Hayashi: Many companies may be blind to these challenges, or perhaps they want to see them but can't identify them. I believe focusing on Diversity & Inclusion—an issue that should be close to any company—is a good starting point...

Noda: Companies say, "We want to drive innovation." So when I ask, "Great! What problem do you want to solve?" they reply, "Well, anything will do." Innovation is a means to solve problems, yet it's become the goal itself. Even when I press them, "No, innovation is a means. Think about what problems you want to solve with it," the answer is always "None." They likely have many real challenges, but spending too long with overly homogeneous people causes what psychology calls "acclimatization," making them invisible.

Creating an organization where people with diverse perspectives can engage in dialogue is truly the best path forward.

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A Society Where Diverse People Gradually Add Value

Hayashi: Among Japan's various social challenges, what are you particularly focusing on, Professor Noda?

Noda: The most significant is the population issue. Setting the goal of how to increase the population is now meaningless. What we need is to set the goal of how to maintain a happy country while the population declines, and how to make it an even happier country.

In fact, the Nordic countries were the first to tackle the population issue and succeeded. In the 1990s, Nordic countries faced collapse due to ballooning social security costs. When rebuilding, they declared: "We are small nations. Therefore, everyone—young and old, men and women, people with disabilities, foreigners—must work and create added value. Conversely, because we are small, if everyone contributes a little added value, we will prosper." I found this fascinating at the time and watched closely—and indeed, that's how the Nordic countries recovered.

Japan's population is projected to reach 50 million by 2100. Decline will continue, but looking at the downward curve, I predict it will stabilize around 35 million. That's still comparable to large European nations, but less than a third of today's population. If so, I believe Japan, like the Nordic countries, will inevitably become a nation where everyone continuously contributes small amounts of added value, working hand in hand to survive. The government is currently promoting "work style reform," but what will be needed going forward is "outcome-oriented reform." Isn't the most direct path to solving the major social challenge of population decline for each company to explore ways of achieving results that allow diverse individuals to generate added value?

Hayashi: Companies view population decline as a societal problem because the shrinking working population reduces production capacity. However, people don't belong exclusively to specific entities and produce only within them. As you suggest, I see potential in a model where everyone—whether nationally or globally—simply lives their lives, thereby providing value to society, and we all share in that value.

Noda: So it's about "livers" rather than "consumers," right? As I recall, Nomura Research Institute was using the term "livers" at least since the early 1980s. Back then, my seniors would say, "We're not just consuming; we're also producing. Housework is legitimate production. That's what living means." I remember being taught that we must understand the market based on the idea that everyone is producing.

Germany offers a unique example. When the Berlin Wall fell, West Germany feared that merging with less productive East Germany would drastically reduce its international competitiveness. A decline in competitiveness would cause the mark to plummet, making imports impossible and necessitating self-sufficiency. A metropolis full of consumers alone couldn't survive under such conditions. This is where the Germans' brilliance shines: they began creating self-sufficient, medium-sized living communities, each designed for about 100,000 people.

Specifically, the city's periphery is covered in Wald (forest). This forest is a productive resource, providing firewood and raising deer. Inside the forest lie farmlands, with residential areas backed by these farmlands. Rivers had their artificial banks removed to restore natural banks for trout stocking. The city center housed small industrial zones, market squares (Marktplatz), churches, and town halls. The "Klein Garten" (small garden) concept involved ordinary residents cultivating small plots to increase self-sufficiency. While "Klein Garten" now seems to refer to Sunday farming, the original vision was to rebuild the nation through a collective of these small gardens.

This is a remarkable concept. I believe Japan should take note of it as a model where people not only work for corporations but also produce goods closely tied to their daily lives as citizens, thereby supporting the nation.

Hayashi: The German example represents an ecosystem different from the traditional corporate-centered model where people work for companies and consume what those companies produce. If we're entering an era of new ecosystems, what role should companies play within them?

Noda: Companies excel at pinpoint concentration and generating value from scratch. In the new ecosystem, they should hone this capability further. The direction should be either commercializing solutions to existing community challenges, or solving global social issues to earn foreign currency and reinvest it back into communities. Either way, solving social issues must be at the core of value creation. Currently, companies are intensely focused on boosting operational productivity to generate profits, but this only yields arithmetic progression-level gains. To achieve geometric progression-level growth, they should concentrate their capabilities on driving social innovation.

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Businesses Supporting Disability

Hayashi: We believe the inclusive marketing we advocate can serve as an approach for companies tackling social issues. In reality, when companies pursue business centered on diversity, there's a risk of criticism like, "Are they just exploiting minorities to make money?" However, without creating value and generating profit, solutions cannot be sustainable. What are your thoughts on this?

Noda: Minorities are often forced to endure by being made to conform to the majority, right? This undermines their happiness, and a market lacking happy people will eventually collapse. In that sense, doing something for minorities benefits not just them, but the entire market. To companies, I want to say: before you fear criticism, just go ahead and try it.

Specifically, I think companies should pursue businesses that support the productivity of minorities. For example, the startup Cyberdyne develops wearable robots. Currently, they're used for nursing care assistance, but in the future, they might help elderly people with diminished muscle strength perform tasks. If such support enables more people to enjoy their work, overall productivity should increase.

Supporting others isn't something special. I heard about a student at Caltech who made discriminatory remarks about disabled people during a lecture. The professor made the student take off their glasses and read from a book with tiny print. When the student protested, "I can't read without my glasses," the professor said, "It seems you have a visual impairment too. But because you have the tool of glasses, you can achieve the same productivity as someone without a disability. If other people with disabilities aren't achieving similar productivity to non-disabled people, don't you think that reflects the negligence of us engineers who haven't developed the necessary tools?" As this professor said, we all have some form of disability, not just minorities. Supporting these differences lifts everyone up and could also present significant business opportunities for companies.

Hayashi: Supporting disabilities and boosting productivity is crucial. However, in inclusive marketing, the key point is that people aren't valuable because of high productivity; they're valuable precisely because each person is different.

Noda: That's right. When people with different perspectives—whether minorities and majorities, or even different minorities—discuss things, something uniquely new emerges. This is intellectual productivity, a form of open innovation. Yet everyone forgets how productive this is. Productivity isn't just about manual labor. The very existence of minorities within an ecosystem is a valuable productive activity. With that premise, we should support them to achieve what was previously impossible due to their disabilities.

Hayashi: How can we create mechanisms where minorities and majorities mix and encounter each other?

Noda: Companies hold the key. They are excellent talent development workshops, nurturing innovators who are difficult to cultivate in homes or schools. Releasing them into the field and exposing them to people they've never encountered before can lead to discovering new challenges, and solving those challenges might become the company's own business. Companies should actively encourage their employees to engage in pro bono work (where professionals contribute their expertise, skills, and experience to social causes) or side businesses.

Hayashi: It would be great to have mechanisms where not only current employees, but also retired individuals, can give back to society what they cultivated within companies. While these discussions focus on people leaving companies to engage with society, is it also possible to create spaces within companies where diverse people can meet?

Noda: In regional areas, numerous examples already exist of companies becoming integrated with society. For instance, disability employment often starts from personal connections, like someone saying, "My sister has a disability, and I want to help her somehow." The same applies to hiring seniors. The confectionery maker I visited recently has an average age of 75. People around 60 were called the young ones. In Tokyo, companies tend to exclude people with disabilities and the elderly, but rural areas face the challenge of labor shortages. To solve this, they are taking root locally and starting inclusion. In that sense, the most lagging behind might be some listed companies in major cities.

Hayashi: Recently, I interviewed Mr. Yoshinari Oya, Chairman of Butsuzoen, which runs the local community 'Share Kanazawa'. What struck me was how crucial local communities and neighborhood ties are for creating a mixed world. When people live alongside others, not knowing them is a risk. But once you get to know them—whether they're elderly, children, or disabled—you naturally want to lend a hand and make life here enjoyable. Inclusion is heavily influenced by whether such a foundation for mutual understanding exists. In this regard, Tokyo is at a disadvantage. Even in condominiums, people often don't know who lives next door; the concept of a neighborhood simply doesn't exist.

Noda: Metropolitan areas are the most backward in addressing these issues, so starting there might be difficult. Even in Tokyo, you see community revival in new towns, but it's hard to imagine community in tower condominiums. I think it's better to start experiments in regional core cities with moderate economic strength, culture, and history, and use that to envision Japan's future.

Hayashi: Are there any regional cities you've actually visited and found noteworthy?

Noda: If I had to name one, it would be Shodoshima. On Shodoshima, a company called Shodoshima Healthy Land operates a large olive grove. This company doesn't just manage the olive grove; it also produces olive-based products, runs tourist farms, and even operates a publishing house and a gallery in a traditional Japanese house. It's essentially a conglomerate centered around olives.

What's fascinating is how they welcome young people who've suffered mental health issues in urban life and employ them in farm work. They recover through nature and community support. While they could only be consumers in the city, on Shodoshima they become producers. Currently, it's only young people with mental health challenges, but since it's a conglomerate, there should be work available for people in wheelchairs or with hearing impairments too. I have high hopes that this island will realize a model where everyone contributes a little bit to create added value.

Hayashi: So this is the Japanese version of the German Kleingarten you mentioned earlier.

Noda: Yes. Moreover, the company sells its produced goods nationwide via mail order. Beyond that, overseas sales are also possible. I find it interesting that they can connect with the world without going through Tokyo.

Hayashi: 'Share Kanazawa' was also a conglomerate with various business entities, achieving inclusive management. But large corporations are also conglomerates with many business entities, right? How does the region you just mentioned differ?

Noda: Shodoshima Healthy Land's conglomerate is structured like a mandala. It starts with a mandala diagram based on a certain worldview, and businesses are created to fill in that diagram. It's not about the petty idea that "if we do this business, synergy will create profits." It's about the image of creating holistic value as a whole. That's where it differs significantly from the conglomerates of large corporations up until now.

I always say, "You can't manage what you can't imagine." For entrepreneurs, the most crucial thing is the imagination to envision the future. Healthy Land possesses that. Conversely, large corporations lack imagination.

Hayashi: How can large corporations cultivate imagination? When they were founded, they had the passion to solve social issues, but as new employees join and personnel change, that passion fades. Is this also a problem of lacking imagination?

Noda: Returning to what I mentioned at the beginning, the most crucial thing is to see the field. As an example of successfully turning social issue resolution into a business, I often cite Bangladesh's weather insurance. Bangladesh suffers from inadequate flood control, leading to annual major floods that impoverish farmers. To change this situation, weather insurance was developed, providing immediate payouts against adverse weather. Interestingly, this insurance was created by a mobile phone company. While building base stations across the country, they saw people crying over their flooded farmland, recognized the problem, and turned solving that challenge into a business. Large corporations must also start by looking at the field, not staying locked inside their offices, or they won't be able to envision anything.

Another crucial shift is moving from bulk (volume) to ratio (rate) thinking. Businesses solving minority issues might seem small in bulk terms. But in terms of profit margin—the ratio—they can be competitive and have the potential to grow significantly in the future. Yet, because we're stuck in bulk thinking, we overlook them. I conduct executive training for various companies, and many executives say, "We won't get motivated unless it's at least a ¥100 billion business." When I ask, "Do such businesses actually exist?" the answer is "No." If that's the case, it's better to switch your thinking to ratios.

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Can Universities Become New Communities?

Hayashi: What about universities? Are they cultivating young talent with the vision and imagination to solve societal challenges? The Ministry of Education has been running the EDGE Program (Enhancing Development of Global Entrepreneur Program) since 2014.

Noda: Now the sparks are flying my way (laughs). MEXT is doing it, and individual universities are working on it too. However, universities should be places that move students through atmosphere and vibe, more than through curricula or programs. In that sense, do today's universities have an innovative atmosphere? Absolutely not. It seems it will take a little more time for the sparks created by curricula and programs to permeate into the overall atmosphere.

Hayashi: I see. Universities are actually incredibly diverse places, right? Plus, they're connected to businesses and could potentially replace the local communities that have disappeared in urban areas. I feel that kind of potential. What's it like from the inside?

Noda: The conditions for a community to form are long contact time and high contact frequency. In that sense, classes attended only once a week cannot become communities. If there's potential, it lies in seminars and clubs with high contact frequency. I do think there's a definite approach in utilizing seminars and research labs as communities. However, for that to happen, the professors leading the seminars must first have that awareness. Currently, universities implement faculty development (a collective term for organized efforts to improve teaching content and methods). The challenge lies in how effectively this functions.

Clubs, on the other hand, are student-run, making it difficult for the university to intervene. I've been gathering club leaders for years to provide leadership training, but it often feels like watering sand... If we intervened more thoroughly, I believe that sand could become a pond. I continue my steady efforts, hoping it will blossom someday.

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To change an organization, start with top-level volunteers

Hayashi: Some executives and university professors recognize that solving social issues can become a business. However, many struggle with where to start transforming their organizations to make that happen. Should they start with internal education systems? Should they fundamentally rebuild their vision? Or should they tweak the evaluation system to push employees forward? What do you think, Professor?

Noda: There are two key axes. First, whether to start at the grassroots level or from the top. The second is whether to enforce change through systems or rely on voluntary participation. Ultimately, we should fill all four quadrants formed by these two axes, but I believe the top should be the first place to start. What I think is highly effective is volunteer activities by top executives.

In Europe and America, executives attend church on their days off. Churches include wealthy people, poor people, and LGBT individuals. This allows them to experience diversity firsthand in their immediate surroundings. Japanese executives, on the other hand, meet many people daily, yet surprisingly, they often only interact with homogeneous groups. Their days off are spent playing golf at country "clubs." That won't foster an understanding of diversity. Executives should voluntarily immerse themselves in diverse environments.

Hayashi: Perhaps executives have fewer opportunities than anyone to expand their free imagination. Speaking of which, the chairperson of 'Share Kanazawa' was a former Japan Overseas Cooperation Volunteer. It might be interesting to create an 'Entrepreneur Overseas Cooperation Corps' and bring them in from above.

But even if we start at the top, the next step is the frontline employees. What approaches could we consider for them?

Noda: Forcing them into niche markets could be a valuable experience. GE Medical Systems once tried selling ultrasound diagnostic devices in China. High-quality medical care requires ultrasound equipment. However, at the time, these were expensive machines costing 10 million yen each, making them unsellable as-is. So, they got creative and developed a system using software installed on PCs for image processing instead of dedicated machines. Ultimately, the low-cost product developed for the Chinese market became a hit in their home market of the US, specifically for ambulance use. This is a classic example of reverse engineering. It was precisely because they entered a niche market first that they identified the problem and gained the ability to solve it creatively. If they had focused solely on their home market from the start, this wouldn't have happened.

Business opportunities don't necessarily arise solely from daily work. They can also begin with off-site experiences. For example, Toyota Tsusho entered the bluefin tuna farming business, but the catalyst was a training program for young employees. When the training program assigned a business creation challenge, an employee interested in environmental issues recalled Kindai University's bluefin tuna project. They proposed, "The university can farm the fish, but lacks the sales power. Why don't we support them with our channel-building capabilities?" Management heard about this idea and decided, "This sounds like something we should do." If companies focus on solving social issues, even training programs can become opportunities for problem discovery.

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Changing Social Awareness Through Dialogue

Hayashi: What interests me is whether the idea to enter bluefin tuna farming arose purely by chance and luck, or if the company had intentionally created mechanisms to foster such ideas. Companies naturally want to do this intentionally, but is it actually possible?

Noda: In 2012, Google analyzed the conditions for highly creative and productive teams through "Project Aristotle." The key condition that emerged was psychological safety—the feeling that you can be your authentic self and still be accepted by the team. Toyota Tsusho likely has a culture where employees feel this psychological safety, allowing young employees to share ideas without hesitation.

If we aim to drive innovation by solving social issues, an environment where people immediately pour cold water on ideas by saying, "That won't be profitable," is unacceptable. Workplaces prone to this need a cultural overhaul in terms of organizational development.

Hayashi: Is the word "business" itself the problem? Business is the driving force of ecosystems that continuously generate value, yet in society, it's often used to mean only generating profit. So when someone asks, "Will that be profitable?" after a proposal, it makes people flinch and apologize. The essence of business isn't just about making money; solving social issues is what truly constitutes business. How do we spread this understanding, not just within companies but throughout society? It's a challenging question.

Noda: It's difficult. The reality is that even writing books or speaking on TV doesn't get the message across easily. One direction we can take is dialogue.

This is a slight digression, but group interviews used in marketing aren't very reliable. It's pointless to ask customers what they want when they don't even know themselves. So what should we do? We must explore within the dialogue: "What is this person struggling with?" Then, we rapidly prototype solutions to their problem, engaging in repeated dialogue: "How about this?" "Hmm, maybe not quite right." "Then, what about this?" Through this process, customers discover things they hadn't even realized themselves.

I believe the idea that solving social issues can become a business should also be demonstrated to the world through dialogue and prototyping. The key is to get out into the field, involve people outside the company, and start problem-solving workshops. If you see potential there, turn it directly into a business. You can even bring those external collaborators into the company. Intentionally lower organizational boundaries, expand the circle by involving diverse people in social open innovation. Isn't that one possible solution?

Hayashi: Today, 7 billion people live on Earth. This has created the greatest challenge in history, but if 7 billion people could cooperate to live together, it would be the most wonderful thing ever. To steer this situation in a positive direction, the power of business is indispensable.

That said, the traditional business view of "I am the producer, you are the consumer" likely cannot sustain a planet of 7 billion people. We must position business as part of an ecosystem where people meet others, bring what emerges from those encounters into companies, or conversely, take what is cultivated within companies back to society, creating the next wave of value. Listening to your discussion today, I felt strongly once again that this perspective is necessary.

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※This content is available on the Hideo Yoshida Memorial Foundation website.