December 1, 2016 7:00 pm JST
Globalism under fire

Business world needs to embrace sharing economy

Private role in tackling social problems to fend off rising protectionist trend

KUNIO SAIJO, Nikkei senior staff writer

Helping residents in depopulated areas secure a means of transportation is one way that Uber is being used to benefit society. (Reuters)

TOKYO -- On the Greek island of Lesbos, Syrian refugees who fled from civil war, oppression and terrorism live in simple prefab houses whose white walls shine in the sun. The houses were built with support from Ikea, a major Swedish furniture maker.

Ikea provides easily assembled shelters to the Middle East and Africa to improve the lives of refugees. Per Heggenes, CEO of the Ikea Foundation, said that companies as well as governments and aid agencies have a duty to deal with refugee problems.

Waves of anti-business sentiment are rising around the world. Large companies try to avoid paying taxes by any means possible, distort policymaking processes by employing lobbyists, and move overseas in quest of cheap labor, reducing domestic employment. Many such things contribute to the negative image of large companies, but society now needs to broaden its perspective.

"Let's move forward -- together!" wrote Tim Cook, CEO of Apple, in encouragement to employees in an email after Donald Trump was elected U.S. president. During his campaign, Trump criticized the tech giant for making its products in China. As an inward-looking sentiment is rising around the world, there is a growing tendency among global companies to seek stronger ties with society.

Reassessing value

In Nakatombetsu, a town in Japan's northernmost island of Hokkaido, a social experiment began this past summer. The Tempoku Line of the former Japanese National Railways, which used to run through the town, was abolished nearly 30 years ago, and a local bus service with four runs a day is currently the only public transportation available. Residents without cars have to use bus and train services and spend the entire day to get to the nearest hospital.

In response, the municipality has turned to the ride-hailing service of U.S.-based Uber Technologies. Using the internet, people contact one of the 15 registered drivers and get picked up by one that is available in his or her own car. "We want to have Uber take hold as a transport service for residents of our town, which is suffering from depopulation and the aging of society," said Hitoshi Sasahara, an official of the Nakatombetsu town office.

Uber Technologies is known as a "unicorn" -- a venture company whose value exceeds $1 billion. The company is in the vanguard of global capitalism, yet it is also earnestly confronting regional problems. 

Airbnb, a U.S. hospitality company that provides internet-based services to connect travelers with private hosts, partnered in October with the Kamaishi city government in Iwate Prefecture, in northeast Japan. The city is a venue for the Rugby World Cup in 2019 and faces a shortage of lodging.

Michael Porter, a professor at Harvard University, has presented the concept of "shared value." He contends that companies could sustainably create wealth by working to resolve social problems of their own accord rather than leaving the task to government. In a world leaning toward anti-globalization, a growing number of companies realize the value of the sharing economy and are embracing Porter's idea, which they believe can lead to harmonious coexistence with society together with growth. 

Anti-business sentiment ebbs and flows over time, and the relationship between society and the business world changes. For example, at the beginning of the 20th century in the U.S., antitrust legislation was strengthened to counter monopolies. In the current low-growth period, national governments' fiscal resources are limited. If companies can support public services and help resolve problems that are beyond government's capabilities, they will become a driving force in the world and stop the current trend toward protectionism. 

 

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