Message from management Foundation summary

Practical Knowledge of the “New Economy” Needed Now More Than Ever

Chair of Executive Committee, SIIF
Shuichi OHNO

Fiscal year 2020 was an unprecedented year in which the emergence of a COVID-19 forced all social activities to be scaled down or suspended. Not only in Japan, but all over the world, a variety of problems became apparent in all aspects of society, including politics, economics, education, and culture. However, it was also a year where various attempts to overcome these issues began. Some of them have already achieved a certain level of success, and it can be said that there is a bright hope for the future.

Looking back at the history of mankind, disasters have led to social changes. Major crises have always led to innovative changes, and it is thanks to these changes that humanity has been able to overcome its difficulties. In other words, now that we are facing the unprecedented situation of the COVID-19 disaster, we can say that we are at a historical turning point.

The mission of the Japan Social Innovation and Investment Foundation (SIIF) has been to “build the foundation for a society in which the resolution of social problems and the creation of value take place autonomously and sustainably”

Japan, the world’s fastest aging society, is facing major structural problems such as the exhaustion of medical and nursing care systems, child poverty, economic decline in rural areas and the disappearance of communities. Now that it has become clear that the government redistribution model built during the period of high economic growth and premised on economic growth cannot cope with these issues, we need to redefine the boundaries between the public and private sectors and build a new social system. One of the major keys to social systems will be the creation and reconstruction of mechanisms that visualize, value, and circulate not only economic capital, but also capital such as nature, society, culture, and sensibility.

Looking back on fiscal 2020, we were able to achieve many results in the areas of impact investment and support for social entrepreneurs using dormant deposits. In the field of impact investing, as a pioneer in Japan, we made two new investments from Hataraku Fund, published impact reports, held a study session on impact investing jointly with the Financial Services Agency as the secretariat of the GSG Domestic Advisory Committee, and prepared guidelines for implementing impact investing. As for support for social entrepreneurs, for the second year in a row, we were selected as an organization distributing funds for the Dormant Deposit Utilization Project, and provided subsidies and management support to entrepreneurs engaged in social businesses. We have also provided capital investment and subsidies to entrepreneurs who have graduated from the Nippon Foundation Social Changemakers Program, management support, and support for planning and implementing new initiatives to solve social issues in each region.
In addition, we have been finding and funding social entrepreneurs who are planning new initiatives to solve social issues in their respective regions, and providing them with management support. As government spending continues to grow, the Foundation is actively supporting companies that provide innovative services and platforms that contribute to reducing public costs.

SIIF will create new model projects in which resources such as funds, human resources, and knowledge are circulated in pursuit of what is good for society, and will make its own investments that will serve as a catalyst for such projects, while spreading the examples to more collaborators. In addition, by creating an environment for the expansion and development of these model projects through research and policy proposals, we aim to build an ecosystem of resource circulation in which the resolution of social issues and value creation can occur autonomously and sustainably.

*What is impact-oriented resource circulation?

Refers to activities aimed at resolving social problems and creating value that emphasize social impacts, and the circulation of funds that cannot be described as investments (funds that are close in nature to donations or subsidies), of human resources and knowledge and of other social, human and emotional capital whose value cannot be measured in economic terms. The previous iteration of SIIF also aimed to build a market for impact investing, but since the merger we have also been considering ways of support that include more flexible provision of funds, by which we mean methods of providing funds that should not be called “investments,” because material financial returns cannot be expected (for example, in situations where only the principal is repaid), but that require a greater level of responsibility from the recipient of funds than would donations or subsidies. We have positioned this statement at the beginning of the document because our goal is an environment in which more flexible approaches to providing funding that take into account the risk tolerance of the provider of funds can be utilized for the resolution of social problems.