That's right! I have a family business! The depth of "social capital" held by local companies, forming the foundation for promoting social innovation.

Signs of Regional Revitalization 2.0 Emerge in Awaji Island's "Ura-Expo" Concept, Born from the "Myth of the Birth of the Islands"

I participated in the " 4th Beyond Conference, " hosted by the and Beyond Company consortium, led by the NPO ETIC. and involving various companies. Although I couldn't attend the first conference, the second conference provided insight into the current state of "Collective Impact," which is beginning to take root in Japan. The third conference made me aware of the reality behind the term "related population," which supports regional revitalization. Each conference is an event rich with discoveries. The participating companies, organizations, and individuals—including students—all bring their skills and expertise to the table, driven by a passion to solve social issues, or achieve social innovation. They gather in person to share knowledge and build collaborative networks to realize and accelerate these goals. This fourth iteration took place over two days on Awaji Island in Hyogo Prefecture, attracting nearly 400 participants in total.

※1 Regional Revitalization 2.0: A policy vision aiming to realize an "autonomous, decentralized society" where regions take the lead in sustainable development. This addresses structural challenges like population decline and Tokyo's overconcentration, building on the achievements and lessons of past regional revitalization efforts. It seeks to create high-value-added industries leveraging local resources, culture, and nature; decentralize businesses and talent to regional areas; utilize digital technology; and foster collaboration among industry, government, academia, finance, labor, and media to achieve diverse forms of happiness.

As mentioned before, this conference doesn't end with speakers simply delivering information. After each group reports on their current activities, questions about the future of their project are posed, transforming the venue into a space for unified discussion. The initially orderly rows of chairs and tables break apart the moment questions come from the stage, with multiple groups forming circles throughout the space. Ideas shared are evaluated for feasibility from each participant's perspective, then transition into networking for role assignments to make them happen. Some individuals volunteer for multiple roles, and before you know it, expanded projects restart with new faces.

To quote a participant, the position of individuals not tied to corporations allows for simpler, faster conclusions without the need to cater to various interests, and this apparently feels very satisfying. Well now, while unnecessary friction inevitably arises when people gather, here there doesn't seem to be a single clouded expression.

Immediately after the main sessions, attendees split into small groups to exchange opinions on the presentation topics and discuss what steps were needed next.

Recently, there's a prevailing sentiment that companies and organizations should respond to societal demands and tackle social issues as corporate citizens. It's certainly encouraging that every company is striving to fulfill this responsibility. However, event participants unanimously note that while companies are renowned for their execution capabilities, their pace and the various constraints inherent to large corporations often act as significant hindrances. Yet, the individuals gathered here have shed their corporate titles and transcended organizational boundaries. They seem unable to forget the exhilaration of this space's emergent potential for solving societal challenges.

Furthermore, this conference unveiled the "Ura Expo" concept, set on Awaji Island near the current Osaka-Kansai Expo site, aiming to convey Japan's appeal through different layers. Awaji Lab, a co-organizer, is working to attract interns to Awaji Island—which faces severe population outflow—and promote permanent residency through dual-base living, encouraging participants to join local businesses as workers. On the first day, fieldwork was conducted visiting 12 businesses aiming to expand their operations on Awaji Island.

The "Backstage Expo" concept aims to convey the authentic reality of local businesses steadily making progress through community power and unique local perspectives, rather than focusing on outward glamour. It seeks to create a space for empathy and learning. Using the entire Awaji Island as a stage, it aims to create opportunities to learn about practical examples of local revitalization and to have similar initiatives taken back and established in each region. While powerful content like an Expo dynamically attracts people, if the strategy of using each region's unique content to foster empathy and cultivate medium-to-long-term connections takes root, it might lead to a different kind of inbound revitalization than before.

In the field dialogue sessions, participants visited 12 businesses developing new ventures on Awaji Island. They listened to the motivations, challenges, and future aspirations of these businesses, then discussed strategies for scaling their operations in group discussions.

Region-Specific Management Guidelines Lead Social Transformation

Amidst this, what particularly caught our attention were the initiatives launched by locally rooted companies to revitalize the local economy. These weren't merely superficial expressions of goodwill for regional contribution, but tangible actions taken in unison with local government and community—efforts that seemed fundamentally different from anything seen before.

As part of my daily work, I frequently engage in corporate communications, particularly sharing globally established social good initiatives with companies. I believe demonstrating a company's social purpose to society at large is the only way to enhance its future value—its social value—and I actively propose this approach. However, the "community-first" actions I witnessed from these local companies struck me as remarkably concrete and fresh, with many having both broad and deep-rooted connections.

The importance of altruistic actions and social innovation initiatives, which I often advocate, were not just abstract concepts but were actively progressing within reach. It seemed they had long since shifted their focus from creating economic value to generating social value. It was truly fascinating to see this multi-layered co-creation happening locally, like a two-person three-legged race, or rather, a three-person four-legged race. The movement of local companies collaborating to co-create new value is accelerating. Multiple companies, organizations, and even individuals are joining in, combining their respective strengths and roles to form a "starting point for regional revitalization."

Why can these locally rooted companies move so swiftly and attract co-creation partners more readily than so-called large corporations expanding nationwide or even globally? I'd like to share the reason discussed during a segment of the "Whirlpool Session," where we heard from companies actually driving these activities locally.

The session, themed "Co-creation by Local Companies, Evolution of Regional Management," began with a question posed by Ai Nakajima, an editor and visiting professor at Doshisha University. "When regions welcome external collaborators for initiatives like regional revitalization or disaster recovery, a common concern arises: 'Isn't this suspicious?' It's an emotional barrier born from mutual unfamiliarity – questions like 'What kind of people are in that NPO?' or 'What's the real agenda of those big corporate folks coming from Tokyo?'"

While large corporations with strong execution capabilities and NPOs with extensive networks are expected as collaborative partners in solving local issues, local residents often still feel a certain distance when actually meeting them face-to-face. In that initial phase of sizing each other up, there exists a very common situation where people view the other party skeptically, wondering what they're really about and how seriously they'll commit.

"That's it! What about local family businesses?"

"An extremely effective approach to avoid this suspicious problem is to involve local businesses," says Nakajima. Many local businesses are "family-run enterprises" founded locally and coexisting with the community for years.

Their leaders are often local dignitaries. Being a local dignitary means they contribute to the regional economy, but not just financially. They are deeply rooted as corporate citizens, serving as reliable pillars within the community. They are the so-called "key figures." In reality, as you know, family businesses rooted in the local area already possess the local "trust," "norms," and "networks" built up through their history. And these are actually a form of "social capital" – a unique asset that only local businesses can possess.

Fundamentally, "social capital" is the concept of viewing the relationships between people themselves as capital. Known in English as "social capital," it was defined by American political scientist Robert Putnam as "the bonds between individuals, that is, social networks, and the norms of reciprocity and trust that arise from them." The concept of reciprocity norms might be a bit tricky to grasp, but it refers to a mutually beneficial state where, for example, someone who receives something offers some form of return. It's somewhat akin to the common notion of give and take.

This reciprocity transforms into deep trust only through accumulated time and repeated interactions. In this sense, it makes perfect sense that local "family businesses" hold an advantage in collaborative creation, offering a sense of security and the ability to run alongside partners, compared to newly formed relationships with unfamiliar NPOs or large corporations. While the survival crisis of local family businesses has been discussed in various contexts, in today's era of Regional Revitalization 2.0, these very businesses are beginning to demonstrate their presence as key players in regional revitalization across many areas.

Incidentally, Japan has over 20,000 century-old companies, ranking second globally behind America's 30,000 (data also shows over 90% of Japanese companies are family-run. Furthermore, Japan has over 1,300 companies founded over 200 years ago, accounting for 65% of the world's total).

Our passion for regional revitalization is frighteningly aligned

Next, representatives from two companies shared their approaches to passing their family businesses into the next generation: Mr. Yasuhiro Mizogami of Miz, which operates pharmacies in Saga Prefecture, and Mr. Takuma Iwabuchi of Iwabuchi Yakuhin, a pharmaceutical wholesaler in Chiba Prefecture. Both are outstanding companies with over 100 years of history, having sustained and expanded their businesses through deep community roots. Their sense of urgency and plans for the next 100 years were remarkably similar, leading to moments where both companies exclaimed in mutual astonishment, "We share the same feelings and are doing such similar things!" Here, I'd like to briefly touch on the outline of their ongoing initiatives.

[Mizu Co., Ltd.: Mr. Mizokami]

For a pharmacy like ours, the profit model is that the more illnesses there are, the more we earn. When hay fever season arrives or influenza spreads, the corresponding medicines sell well. However, we believe this kind of business model is unsustainable going forward. What we truly aim for is a community with fewer illnesses – an "ideal town where medicines don't sell."

Driven by this vision, we believe new value emerges only by challenging ourselves beyond our core business into various fields. We act on this belief daily, and one common thread is that "we've done it by collaborating with others." Among the ventures we've actually started: running a nursery school despite being a pharmacy, and seriously working to make traditional Chinese medicine less intimidating and more accessible for daily use. Truthfully, these weren't corporate strategies; they started when we met people who said, "I really want to try this!" We talked, connected, and began. We feel our strength lies in fostering relationships where people come to us with such ideas and we can support them.

We believe that discovering and nurturing talent is crucial not just for sustaining our current businesses but for thinking ahead. To enhance our ability to co-create with others, we're continuously adopting and implementing mechanisms shared at the Beyond Conference within our company.

We often co-host health seminars with experts who advocate for healthy longevity, and they consistently emphasize that "the secret to health is challenging yourself with new things." That's precisely why we aim to be a company that not only takes on these challenges ourselves but also fully supports those who seek to challenge themselves. Our goal is to position ourselves as a company that wholeheartedly supports the challenges of individuals with purpose. We participate in this conference to find partners who can co-create with us in such endeavors.

Finally, I want to emphasize one thing: while our activities are often perceived as volunteering because they benefit society, we position all of them as business investments toward achieving our ideal state. Monetization is naturally considered; it's just that the time horizon is longer. Otherwise, such ventures couldn't be sustained. Yet, engaging in these activities naturally connects us with like-minded people. Even individuals who had left our home base in Saga reach out, saying things like, "I always wanted to do something in Saga someday." These local connections, this social capital, truly feel essential.

[Mr. Iwabuchi, Iwabuchi Pharmaceutical Co., Ltd.]

The fourth-generation owner, operating a pharmaceutical wholesaler in Chiba Prefecture for 111 years since his great-grandfather founded it. With no competing companies within the prefecture, their position allows collaboration with any business, which is a strength. He originally worked for another pharmaceutical company and joined the family business three years before its 100th anniversary.

Like Mr. Mizuno, Iwabuchi Pharmaceutical's fundamental guiding principle is to strive toward a future without the need for medication. While they have long served as a vital regional infrastructure for pharmaceutical distribution, for the next 100 years, they want to consider what they can contribute not only to "treatment" – restoring health from illness to a neutral state through medication – but also to "prevention and health maintenance." Furthermore, together with the community that has supported them, they want to contribute to creating a safe, secure, and livable well-being town, enabling everyone to age healthily. They are setting goals aligned with their corporate philosophy, including tackling social issues to achieve this.

Through industry-academia collaboration with Chiba University, we established the "Joint Research Division for Healthy Community Development" and are advancing activities aiming for collective impact by engaging various stakeholders.

We are grateful that over 100 years of operating in the region has fostered connections with local business leaders. When issues arise, we receive various inquiries from banks, government agencies, and others. When Chiba University decided to further strengthen its industry-academia collaboration, we were the first to receive the information. We quickly reached an agreement to start joint research with the Center for Preventive Medicine and have also engaged in diverse collaborations with energetic young people from Chiba University-affiliated ventures. I believe the speed at which these co-creation and collective impact initiatives progress is rooted in the "social capital" we have built up over time.

Currently, from a community development perspective, we've started supporting disabled artists and a land-based sea grape cultivation project. Moving forward, we plan to employ people with disabilities in these initiatives. These aren't one-sided support efforts either. When we share that their art gives us courage or that we want to explore new employment opportunities for people with disabilities through these ventures, local companies immediately respond. Having allies right beside us is a huge motivator. We feel we receive far greater returns from various sources than what we provide.

Both companies featured in the case studies are pharmaceutical-related businesses. Their position as community-rooted pharmacies likely contributed to their strong presence within the community. Of course, many local businesses have been forced out of the market. Survival isn't guaranteed simply because a company is local. Their success stems from fully understanding the value of "social capital" cultivated over many years, actively building deeper relationships, and continuously expanding new networks.

During the discussion following the case presentations, a participant noted, "In Sendai's local shopping districts, barbershops still remain and play a significant role in uniting the community. This is because while everyone is getting their hair cut, they discuss various topics and seek advice from the shop owner. Naturally, the owner becomes well-informed and acts as a mediator." Considering these points, the role of becoming a hub that interacts with various stakeholders, understands their respective circumstances, and brings matters to fruition may be crucial.

Next to report on activities was Ayumi Katayama from the "Family Business Innovation Lab," which supports such potential local hubs.

The light of one's parents ≈ social capital, and that is a beacon of hope

Ms. Katayama works for NN Life Insurance, which provides corporate insurance targeting small and medium-sized enterprises. Simultaneously, she serves as an executive committee member for the "Family Business Innovation Lab" community. This organization was launched in collaboration with ETIC. and the Farmers' Children Network to support successors of family businesses driving regional development. Additionally, through collaboration with government bodies, it partners with the "Successor Koshien " event hosted by the Small and Medium Enterprise Agency. It also collaborates with key figures revitalizing regions and industries across various areas, fostering networking and co-creation at multiple levels.

The Family Business Innovation Lab advocates that "If Japan were overflowing with the essence of family businesses, it would become much more interesting." What family businesses carry is the very face of their region—its history, traditions, and culture—embodying its diverse charm. While it's convenient to find national chain confectionery or variety stores anywhere, it also makes towns feel less interesting and distinctive. Even at the national level, isn't there little benefit to regions becoming uniform? Therefore, we believe family businesses, though seemingly inefficient, play a vital role in connecting the unique characteristics and individuality that define a region. That's why we continue our activities."

Last July, they conducted a "Family Business Successor Survey," which was also presented at an event by the Family Business Advisors Association, of which Mr. Katayama is a member. The key point highlighted was: "The 'halo effect' from parents can be valuable!" He explained, "The term 'halo effect' from parents is often used with negative connotations, but I actually think it can be a positive beacon of hope. I believe the essence of this 'glow' is 'social capital.' And it is precisely family businesses possessing this strength of social capital that can maximize relationships with all stakeholders—be it government, banks, or local residents—and fulfill the role of leading the community with a long-term, steadfast commitment."

The difference in time horizons shared by family businesses and communities generates credibility

After hearing each speaker, moderator Nakajima reiterated the importance of social capital. "The essence of the initial question, 'Isn't this suspicious?', is the anxiety stemming from 'not knowing'. Regional companies have already overcome this through the power of social capital. The initiatives discussed today by the two companies in their respective regions may seem economically irrational in the short term, but viewed over the medium to long term, they represent an investment in social capital."

Citing Mr. Mizokami's phrase, "(Our company and the community) are in a relationship where we inconvenience each other," Mr. Nakajima concluded: "While there is reciprocity—a relationship where both parties benefit—isn't a relationship where we accept living together despite inconveniencing each other, based on trust, even stronger? I would like to call this 'shared destiny power'."

From left: Ai Nakajima, Visiting Professor at Doshisha University; Takuma Iwabuchi of Iwabuchi Pharmaceutical; Yasukatsu Mizogami of Mizu; Ayumi Katayama, Executive Committee Member of NN Life Insurance / Family Business Innovation Lab

The dawn of Regional Revitalization 2.0 is near

What struck me after the meeting was an admiration for the speakers' quiet yet confident manner of speaking, filled with pride in their actions, compared to my own tendency to grandly proclaim that "social innovation is essential." It was their resolve, their doggedness, and their confidence in tackling social issues—where there are no concrete or standard approaches—by steadily building, one step at a time, what they could do from their respective positions. I'm often asked what companies should do or focus on to fulfill their social purpose. I was reminded anew that it's crucial—both in the process and in the goals and outcomes—to envision the "faces" of the people whose happiness lies ahead of those efforts while acting. For those engaged in "family businesses," this community is the local society. By sincerely engaging with it, I glimpsed how "partners" for coexistence and co-creation naturally gather around them, and this trend will only become clearer going forward. The dawn of this Regional Revitalization 2.0 should be near.