Overview and Conclusion article for Part 1 – Part 4, please see here.

In this article, several Japanese co-operatives of different types and from various sectors are briefly introduced. The goal is not to create a directory in the sense of a comprehensive list, but rather to distill essential characteristics of the co-operative sector and the solidarity economy in Japan. The facts presented in this article need to be understood in the context of the specific Japanese conditions and challenges as documented in Part 1, cooperative advantages as shown in Part 2, and the laws and customs applicable to the social economy in Japan as depicted in Part 3 of this article series.

Overview of Cooperatives in Japan 

Infographic 1. Overview of Cooperatives in Japan (1/2) [1]

Infographic 1. Overview of Cooperatives in Japan (2/2) [1]

Examples of Japanese Cooperatives

The examples chosen for the second part of this article do not represent a complete picture of the cooperatives in Japan. The selection, however, provides the opportunity to illustrate important characteristics of the cooperative economy in Japan across different types and various industry sectors in which co-operatives are operating. A focus is put on worker cooperatives as particularly relevant for digital businesses in the sharing economy (for further details, please see LINK Platform Cooperativism)

Table 1. Co-op examples by type

Table 2. Co-op examples by industry sector

In general, the Japan International Cooperation Agency (JICA) is an overarching organization that is collaborating with the Ministry of Education, Culture, Sports, Science and Technology in Japan, for example for research related to cooperation and co-operatives [2].

Co-op Examples by Type

Consumer Co-operatives

Japan Consumer’s Cooperatives Union (Nisseikyo)

The figures of the largest consumer cooperative in Japan are impressive with its 60 million members (of which the majority are women), it’s JPY 1 trillion (USD 10 billion) capital and annual sales of JPY 3 trillion (USD 30 billion) in 2,668 shops across all prefectures in the country. Because of lower prices, the organization is even importing vegetables and processed food. Because Nisseikyo’s members do not have a voice in the leadership of the company, it can’t be counted as being part of the real solidarity economy organization [3]. One of the exceptions among Japanese co-ops that can be seen to genuinely belonging to the solidarity economy is the Seikatsu Club Consumer’s Co-operative Union as presented next [3].

Seikatsu Club Consumers’ Co-operative Union 

The Seikatsu Club Consumers’ Co-operative Union is only a small part of Nisseikyo but has still 310,000 members in 29 co-ops across 19 prefectures. The Seikatsu Co-op won the Right Livelihood Award in 1989 [3].

Worker Co-operatives

Although worker-owned businesses have increased in number and size, only 30,000 workers are working cooperatively in whole Japan, with a concentration in the urban centers Kanto and Kansai. The growth since the 1970s is prolonged and small, compared to the overall working population [4] that is today around 76 million people. One problem that needs to be addressed is that there is no proper legislation for worker co-operatives in Japan [5] as detailed in Part 3 of this article series. Furthermore, the social movement may be not very well unified and orchestrated as some worker-owned organizations prefer the term ‘collective’ over ‘cooperative’ to emphasize the sovereignty of the individual [5]. It is though not only Japan struggling to grow the worker co-op movement. It is estimated that in the US around 350 worker cooperatives employ just 5,000 people [6].

If the cooperative worker movement doesn’t gain traction soon, it will, despite its proven potential, always stay marginal and irrelevant. Respectively it will be too late to solve the economic, social, and environmental issues resulting from cheap labor, inequality, and undemocratic practices by shareholder profit maximization that are aggravating from a global perspective.

Women’s Worker Cooperative (WWC)

The Women’s Worker Cooperatives with its 12,000 worker members accounts for the largest single group of organizations in the Japanese worker cooperative landscape. These WWC cooperatives allow the housewives to work part-time and therefore solve existing labor market constraints, tax issues, and equal employment opportunities, although they mostly don’t need the additional salary for a sufficient overall household income, albeit they are contributing significantly to the new middle-class lifestyle. The success of the WWC and the target women it helps to find suitable work indicates a huge potential of hundreds of thousands of Japanese women who might welcome such opportunities as well [4].

Japan Worker’s Cooperative Union (JWCU) 

After the WWC, the Japan Worker’s Cooperative Union (JWCU) represents with 9,000 members in 2005 the second largest account of worker cooperatives. The union innovatively remodeled itself into a business owned and democratically run by its workers who are provided with work contracts with an array of other organizations. “What had once been a labor union of the unemployed had been gradually transformed into a business owned and managed by its members as a worker’s cooperative [4, p. 7]”. The JWCU provides work crews into consumer co-op distribution centers, hospitals, and park cleaning and maintenance businesses. It has also expanded into more capital and knowledge-intensive industries such as home helper training centers and construction cooperatives [4]. Further examples are a high-school cooperative, a shoemaking collective, a bakery, and a theatrical company, etc. [5].

The JWCU publishes a newspaper ‘Rokyo Shimbun’ (Workers’ Co-op Newspaper) that is issued three times a month, and a bi-monthly magazine ‘Shigoto no Hakken’ (Discovery of Work), both of wich are promoting the worker co-ops activities in Japan and abroad [4]. The JWCU is pushing since years the agenda for adding a distinct worker-owned legal form to the currently available forms of personal ownership, partnership, and limited liability joint stock corporation. Hopefully, joint effort together with the WWC will make a new law possible. What would still be missing then is the mobilization of the young people who are currently underrepresented in the JWCU’s membership [4].

Japanese Institute of Co-operative Research (JICR) 

The Japanese Institute of Co-operative Research (JICR) was founded in 1991 by the JWCU. It serves as the central national and international research organization for its member activists and worker cooperatives. The Institute’s monthly journal ‘Kyodo no Hakken’ (The Discovery of Cooperation’ promotes worker cooperatives and their benefits for workers’ rights and communities’ thriving, including news from around the globe, with a traditional focus also on the European worker cooperative movement [4].

Seikatsu Club Consumers’ Co-operative Union’s Depot’s run by workers’ collective

The Seikatsu Club Consumers’ Cooperative contains various smaller groups like the ‘depots,’ which are run by members who organize as workers’ collectives built on democratic decision-making processes. The depots, therefore, constitute worker cooperatives within the broader Seikatsu consumer co-op. Such workers’ collectives’ membership basis is increasing fast [3].

Fukushi Club

The Fukushi Club is another group of workers under the umbrella of the Seikatsu Club Consumers’ Cooperative. In the Fukushi Club’s case, women who provide care organize as cooperative organizations to institutionalize the ‘shadow work’ and empower both the care receivers and providers [7].

Independent worker cooperatives

There are also some independently established Japanese worker cooperatives, such as the Paramount Shoe Company that was rebuilt through its union after a business failure. EcoTech that span off from the Toshiba conglomerate is another example of employee union initiated democratic worker cooperative [4].

NPOs managed by workers’ collectives

Atsugi Human Support Network

Only after 1998 citizens’ organizations could become legal entities through the NPO Promotion Law that started to encourage volunteering work for vulnerable people without tangible support though. Member housewives of the Seikatsu Club Consumer’s Cooperative in Atsugi city (Kanagawa prefecture) wanted to initiate a ‘local party’ to organize for local elections. The Atsugi Human Support Network became an alliance of 22 NPOs that are managed by workers’ collectives [3].

Co-op Examples by Industry Sector

Agricultural Co-operatives

National Federation of Agricultural Cooperative Associations (JAC Zennoh) 

The National Federation of Agricultural Cooperative Associations (JAC ZEN-NOH) with its 3 million national farm household members and the 12,500 employees is the world’s largest co-op organization [8]. It represents the top of the pyramid of the agricultural cooperatives organized on local, prefectural, and national level [9]. The JAC Zennoh is in charge of sales activities on the national level for its farmer’s co-operatives (JAC) members [10].

Central Union of Agricultural Cooperatives (JAC Zenchu, Nokyo) 

The farmer’s co-operatives (JAC) are organized under the Central Union of Agricultural Cooperatives (JAC Zenchu, Nokyo). The central union, as well as the farming co-operatives, don’t give voting rights to their individual members to participate in the leadership of the organization, which is organized like a corporation [3]. The JAC Zenchu is in charge of planning on national level for its JAC members [10].

Japan Agricultural Cooperatives (JAC, in short, the JAs)

It has to be differentiated between traditional village farming cooperatives, farmers’ groups organized as “cooperative farming groups,” and the members of the national entities JAC Zennoh and JAC Zenchu, which are the Japan Agricultural Cooperatives (JAs).

Financial Co-operatives

Agricultural Cooperatives Credit Division (incl. the Central Agriculture Bank)

The Agricultural Cooperatives Credit Division including the Central Agriculture Bank with the related prefectural credit unions providing mutual credit and insurance services are one of the most profitable operations of the Japanese agricultural cooperatives. Their members are farming-related organizations and non-farming individuals residing in cooperative communities [11].

Mutual aid cooperatives

The mutual aid cooperatives are organized into the national ‘Zenrosai’ federation and count 46,340 units. Although they use the terms mutual aid and cooperatives, they are not adhering to member voting rights and therefore instead have to be affiliated with commercial banks than with the solidarity economy [3].

The women and citizens’ community bank

These organizations are operated by women providing services exclusively for women, i.e., providing loans to according NPOs. In Japan, there is no legal status for non-profit citizen banks as this was so far not supported by governments, why the women and citizens’ community bank operates under a normal moneylender license [3]. However, problems in the commercial banking sector have increased the interest in the possibility to establish non-profit banks. There are now Shinkin (small and big loans) and Shinkumi (small loans) banks who provide services to citizens and SMEs [12], able to revitalize deprived communities [14], and which are of considerable importance in the Japanese financial market [13].

Eitai Credit Union

It is necessary to facilitate inter-cooperative mutual financial aid for developing the social economy. The Etai Credit Union in Tokyo is such an institution providing loans to cooperatives and collectives in consultation with NPOs [5].

Green Coop Fukuoka

Green Coop Fukuoka lends money to both member and non-member indigent people by using assets from members. The government of the prefecture Fukuoka is considering the initiative as crucial to develop financing of an inclusive society [15].

Health, Care

The government has encouraged co-operatives to provide welfare services as a business because they saw the rural and urban potential that could be unlocked from female care workers in the co-op memberships. Today, co-operatives make for about 1% of elderly care services provided under the Act for Long-term Care Insurance LTCI [16].

JWCU Home Helper Training Centers

Care for the elderly involves help at home. For the training of home helpers, the JWCU offers licensing programs that allow the certified home helpers afterward to reimburse their services through the national homecare insurance program [4].

Co-operative hospitals

In association with the Japan Communist Party, there exist member physician-run hospitals. These are the hospitals that were mentioned before as where JWCU worker co-operatives provide their hospital services such as cleaning, shop management, and office staffing [4].

Senior Co-operative (Koreikyo)

As of 2006 each of the Japanese prefectures had opened a Senior Co-operative (Koreikyo) chapter totaling in over 100,000 members nationwide with high growth expectations. The co-operative is, as the name is telling, by and for the elderly, supporting them to stay at home as long as possible and wished through education and home care [4].

Ayumi Care Service

In response to a shrinking and aging population, a 40-year-old woman set up a care business in her town in 2000. Ayumi Care Service today has 35 full-time workers, most of them member-owners who invested the equivalent of USD 500 as share capital and earn a monthly salary of around USD 1,700. Ayumi Care Services accepts any service requests, therefore being often caring about lonely elderly with no relatives and even taking care of difficult death situations [16].

Fukuoka Elderly Person’s Co-op (EPC)

Grown out of the JWCU workers’ co-operative movement, the Elderly Person’s Co-op (EPC), today there is a national federation of 22 EPCs with 45,000 members, of which 32,000 are workers. All the care workers are members, albeit the legal status of the co-op is a consumer cooperative. The services rendered include in-home and community-based care and vocational education for elderly and handicapped. The EPCs entered the LTCI scheme in 2000, and its members are rapidly increasing. Also, as many members did not have co-operative experience, the organization is investing a lot in cooperative education.

Enjoy Sports Club Uonuma

Although the Enjoy Sports Club Uonuma is instead a loosely defined interest group than a real co-operative, it is an excellent example of how citizens can organize to address social issues. In this case, the club achieved significant health prevention effects such as reduction of depression with children and elderly, addressing inactivity (especially in winter) with sports programs [17].

BioBank Japan (BBJ) Project

The BioBank Japan (BBJ) Project represents a cooperative research project implementing a patient-based biobank, having collected the medical data over a 5-year period from over 200,000 patients. The registry allowed the analysis of diseases for improved personalized medicine [18]. Although not a co-operative owned by the patients, it shows the potential of user cross-institutional collaboration and user registration for sharing health data for research purposes, as Midata.ch in Switzerland is a parade example of letting the data providers own and decide on the use of their data as co-op members.

Food

Chisan-Shisho movement

The chisan-chisho movement promotes local food consumption since the 1990s as a response to the concern of disappearing local farms and scandals in the food sector. The initial grass-roots movement is today organized by government and farmers’ cooperatives. Despite its success, the chisan-chisho still needs to find additional ways on how to better capitalize on the local appeal of agrifood to become a more powerful political force [10].

Ecology

EcoTech 

EcoTech is an interdisciplinary co-operative that unites scientists, engineers, technicians, business people, and advocates for co-operatives and community activists. They create energy-efficient products that help clean the environment. An example of EcoTech’s international products is the bio-active home composter that decomposes organic waste into water and CO2. EcoTech has the aspiration to become the center of a social business movement including all industry sectors and types of players, including worker, consumer, and producer cooperatives [4].

Transport

Workers cooperative taxi cab business in Fukuoka

Similar to counterparts in different cities around the world, a taxi cab business emerged as a worker cooperative in Fukuoka, as also the Research Institute’s journal was reporting already in 2005 [4].

Electronics R&D

Association of Super-advanced Electronic Technology (ASET)

The Association of Super-advanced Electronic Technology (ASET), a Japanese electronics R&D co-op headquartered in Tokyo, got USD 300 million in Japanese government funding for research on semiconductors, magnetic storage, and display devices.

Housing

After the economy bubble from the late 1980s when it became difficult to purchase land, housing “rental-type” co-operatives in the form of condominiums became popular. The system is favorable for letting elderly living in their apartments although they do not own it [19].

Conclusion

After the study of cooperative examples in Japan in the context of identifying success factors for promoting the co-operative organizational form for a fairer future of work, the following points seem important to keep in mind for future efforts to advance the cooperative and social economy overall:

• Worker co-operatives need to get a clear and supportive legal basis in Japan, and themselves need to develop strategies to gain influence on the social agenda [5].
• I think it should be more clearly distinguished when using the term co-operative, as in cases of so-called big Japanese co-ops that do not grant member’s a voice in the leadership of the organization. One member one vote is, however, the most vital element of cooperative governance as only ownership and decision rights are effectively empowering the contributing citizen members.
• Although the young people are primarily affected by the challenging labor market, they don’t seem to be connected to the worker cooperative movement. Some few examples constitute JWCU worker groups consisting of primarily young people [4]. For co-operatives to be successful, they need to be able to speak to the youth not only as volunteering organization but as a competitive better alternative to the neo-liberal capitalist economy.
• Increasing the awareness about co-operatives should be a priority as often the young people just don’t know about its possibilities [4].
• Millennials may appreciate opportunities for work-life balance. Co-operatives might be able to provide such a balance in addition to purpose and identification. Furthermore, co-operative governance can be designed to reward performance, therefore supporting personal growth in any ways.
• Solidarity between older and younger generation should also enable financing of co-operative start-ups of young people by the member funding of older more affluent people. Social impact investment should account for such opportunities.
• While grass-roots efforts are essential, the co-operative way should also be supported top-down as a political priority. A co-operative economy can not only be profitable but by not passing excess profits to just a few it is also able to provide for welfare benefits and community development where often tax paid government efforts failed in demonstrating sufficiently sustainable effects.
• All the co-operative seeds should be honored, but it has to be stated that the co-operative economy is negligible and toothless compared to the overall economy. There is no reason for the co-operative movement to rest on its laurels.
• Implementing democracy in organizations by giving the member-owners (and employees) a voice and a share are just natural. Therefore, the co-operative way, rather than being an extreme alternative movement, has the potential to be common sense across many political directions.
• Inter-cooperative cooperation is crucial to bundle the efforts for maximum effect on the growth of the movement. While modest scale for NPOs in welfare services and the solidarity economy is a positive feature, big-scale commercial markets have to be given back from shareholder exploitation to the citizens. Any business can be organized co-operatively.

References

[1] International Cooperative Year Commemorative Cooperative National Council (n.d.). Welcome to the Cooperatives Japan Website. Retrieved from http://www.iyc2012japan.coop/whatsnew/101217_01.html

[2] Mizuta, D. D., & Vlachopoulou, E. I. (2017). Satoumi concept illustrated by sustainable bottom-up initiatives of Japanese Fisheries Cooperative Associations. Marine Policy, 78143-149. doi:10.1016/j.marpol.2017.01.020

[3] Kitazawa, Y. (2010). Japan’s lost decades and a women-led socio-solidarity economy. Development, 53(3), 416-420. doi:10.1057/dev.2010.46

[4] Marshall, B. (2006). Japan’s worker co-operative movement into the 21st century. Asia-Pacific Journal: Japan Focus, (23),

[5] Ishizuka, H. (2002). The Social Economy Sector in Japan. Annals Of Public & Cooperative Economics, 73(2), 241.

[6] Abello, O.P. (2016, January). NYC Set to Triple Number of Worker Cooperatives. Retrieved from https://nextcity.org/daily/entry/nyc-worker-cooperatives-jobs-increase

[7] Lord, A., & Mellor, M. (1996). Women and the cooperative provision of care: the example of the ‘Fukushi Club’ in Japan. Economic And Industrial Democracy, 17(2), 199-220.

[8] Chesnick, D. S., & Liebrand, C. B. (2007). Global 300 list reveals world’s largest cooperatives. Rural Cooperatives, 74(1), 28-31.

[9] Gherman, R., Dincu, A., Milin, A., & Brad, I. (2016). Agriculture and Agricultural Cooperatives in Japan – A Model for Cooperativization of Agriculture from Romania. Scientific Papers: Animal Science & Biotechnologies / Lucrari Stiintifice: Zootehnie Si Biotehnologii, 49(2), 212-216.

[10] Kimura, A. H., & Nishiyama, M. (2008). The Chisan-Chisho Movement: Japanese Local Food Movement and Its Challenges. Agriculture And Human Values, 25(1), 49-64. doi:http://dx.doi.org.liverpool.idm.oclc.org/10.1007/s10460-007-9077-x

[11] Klinedinst, M., & Sato, H. (1994). The Japanese Cooperative Sector. Journal Of Economic Issues (Association For Evolutionary Economics), 28(2), 509.

[12] Glass, J. C., McKillop, D. G., Quinn, B., & Wilson, J. S. (2014). Cooperative Bank Efficiency in Japan: A Parametric Distance Function Analysis. European Journal Of Finance, 20(1-3), 291-317.

[13] Yamori, N., Harimaya, K., & Tomimura, K. (2011). The Roles of Outside Directors in Cooperative Financial Institutions: The Case of Japan. Banks And Bank Systems, 6(4), 11-14.

[14] Chris, M., & Sachiko, N. (2010). How can co-operative banks spread the spirit of co-operation in deprived communities?. Social Enterprise Journal, (2), 162. doi:10.1108/17508611011069284

[15] Sachiko, N. (2015). A ROLE OF SOCIAL FINANCE BY A COOPERATIVE: A CASE STUDY OF GREEN COOP FUKUOKA, JAPAN. ACRN Oxford Journal Of Finance & Risk Perspectives, 4(3), 1-18.

[16] Kurimoto, A. )., & Kumakura, Y. ). (2016). Emergence and evolution of co-operatives for elderly care in Japan. International Review Of Sociology, 26(1), 48-68. doi:10.1080/03906701.2016.1148341

[17] Iguchi, S., Niwayama, M., & Takahashi, H. E. (2015). A conference report of the interprofessional satellite symposium in Uonuma, Japan: an international exchange on the future of community care. Journal Of Interprofessional Care, 29(3), 284-287. doi:10.3109/13561820.2014.966541

[18] Nagai, A., Hirata, M., Kamatani, Y., Muto, K., Matsuda, K., Kiyohara, Y., & … Kubo, M. (2017). Overview of the BioBank Japan Project: Study design and profile. Journal Of Epidemiology, 27(3S), S2-S8. doi:10.1016/j.je.2016.12.005

[19] Ekuni, T., & Jung, J. (2015). 日本初の賃貸型コーポラティブハウスの居住者主体による賃貸システム 改変の変遷に関する研究. 都市住宅学, 2015(91), 124-129. doi:10.11531/uhs.2015.91_124

The “Third Sector” (Social Economy)

Overview and Conclusion article for Part 1 – Part 4, please see here.

The “third sector,” or social economy, is the space of social issues that are left by government and private sector (corporate) failures. It is the arena in which the two actors after-negotiate how to share the burden to resolve the problems they feel could fire back if not addressed.

Japanese governmental statistics (SNA, System of National Account) defined ‘industry’ as for-profit businesses only until 1998, why there was no clear concept for a non-profit organization (NPO) [1]. Since then the NPO Law allows civil society organizations to easily acquire nonprofit corporation status [10]. The social sector represented by non-governmental organizations (NGOs), NPOs, and cooperatives is thought to cover social problems like community development, environmental protection, and social movements. Unlike informal associations, NGOs, and NPOs, cooperatives are the only organizational form that represents the ‘Institutionalized’ Social Economy. Therefore, the cooperatives should be assigned a leadership role in the social economy sector. In Japan, the caption NPO is more prominent than social economy [1].

Cooperatives are by definition only a resource for their members; they cannot take the place of the state as a universal provider, without having the responsibilities and resources of the state [14].

In East Asian countries state influence on social enterprises including cooperatives has been stronger than in other regions. This bears the risk for social organizations to lose independence from public agencies. Another threat is that businesses focusing on financial independence and market performance can lose sight of their social responsibility [2]. This might be less the case for cooperatives that are consequently governed of, by, and for their active members.

Figure 1: Positioning of social enterprise for three regions [2]

The “ideal-type” social enterprise underlines a participatory dynamic in the governance structure [2].

As the social enterprise concept is starting to further develop in Eastern Asia, it is essential to answer the question about the most suitable governance model. It was found that in Eastern Asia, even more than in the US, a participatory governance model, and cooperative principles inspired organizational forms could represent the ideal-type of autonomous social organizations. More innovative and flexible types such as, for example, multi-stakeholder cooperative models require more research and experience [2].

Cooperatives are always “collectives” as they involve member participation in the governance structure. But “collectives” don’t necessarily provide for member ownership structures as inherent in the co-operative. The same is true for so-called buying (or other) clubs whose members carry out an activity together, whether organized as an NPO social club or as a cooperative.

There is simply no easy, legal way to organize worker co-operation in Japan yet, and this must surely be a barrier to their spread [3, p. 16].

Co-ops in Japan are traditionally regulated by sectors, e.g., the Consumer Co-operative Act (1948), The Agricultural Co-operative Act (1947), and the Fishery Co-operative Act (1948). Worker cooperatives are particularly promising to address inequality of income and opportunity, as well as for employee motivation, performance, and in-house innovation. However, in Japan, they lack legal recognition, why worker members often organize in organizations incorporated under the Small and Medium-sized Enterprise (SME) Co-operative Act (1949) or the NPO Act [4]. In other words, it is not forbidden anymore for workers to cooperate for consumption, credit and marketing purposes, but there is also no law positively supporting such aspirations. That’s the reason why the Japan Institute for Cooperative Research (JICR) does promote a new worker law [3].

As discussed in the article “Japanese Cooperatives: Part 1 – Challenges” too, Stock Ownership Plans are not available in Japan to restructure ownership, and the requirements for establishing a joint stock corporation are difficult in Japan as elsewhere. An unusual but clever way went the Senior Cooperative “Koreikyo” that is a consumer co-operative assuming features of a worker co-operative. A currency-like ticketing system achieves the hybrid type of cooperative operation. Members buy books of tickets and use the tickets for paying for co-op services. The services providers redeem later the collected tickets to cover their compensation [3].

Policy Making in Japan

The labor market in Japan has become more challenging. Besides vocational education, career coaching, and traditional start-ups, a new system to incorporate NPOs and worker cooperatives should be prioritized by policy makers [5]. Other countries are also starting to invest more than ever into the development of worker cooperatives that foster dignity and wealth for all as the example of New York initiative for tripling the number of worker cooperatives shows [6]. Also, the conflict between fiscal policy constraints and social policy development can be best resolved by developing the social economy sector and mobilizing its resources and communities [1].

Contracted employees today in Japan don’t enjoy a legal basis that is protecting them as employees; the Civic Code needs still to be adjusted for protective provisions going beyond a service contract and including social welfare for contractors who in fact are engaged in work as employees [5].

The “iron triangle” of Liberal Democratic Party (LDP) politicians, bureaucratic ministries, and vested interest groups—still represents a formidable and functioning element of Japan’s central governing process [7].

Regarding policy making it was found to be challenging to get access to locked circles of party-bureaucracy-interest-group policymaking in economic and social sectors. This situation stemmed mainly from the example of closed-door decision making in the agricultural policy triangle. The Japan Agricultural Cooperatives (JA) reform intended to no longer view the JA as the sole voice of the farming sector and to reduce JA’s most dominant position as a pressure group. The reform is considered to be radical, but ultimately also quite limited in its effect [8]. The differing interests of large international corporations and the local small-scale businesses (farmers) have slowed down (agricultural) policy reforms. Therefore, the JA-Zenchu will likely remain the most powerful and influential interest group in Japanese politics [9]. However, the autonomy of JA is limited too because of its traditional receipt of state donations [1].

Co-operative Governance

Cooperatives are guided by their identity, values, and principles.

Co-operative Identity: A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise [10].

Co-operative Values: Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

Co-operative principles: 1. Voluntary and Open Membership, 2. Democratic Member Control, 3. Member Economic Participation, 4. Autonomy and Independence, 5. Education, Training and Information, 6. Co-operation among Co-operatives, 7. Concern for Community

In general, cooperative governance can be clarified with a model of four pillars.

Table 1. The four pillars of cooperative governance [11]

When a co-operative bank acts as “community organizer”, undertaking tasks which are outside its usual sphere of activities as financier, and its board includes members of the social enterprise sector, its positive impact on community development is more effective [13, p. 162].

Capable management is important. Some literature from Japan reports on the need in different sectors for cooperatives to upgrade their management methods [1]. According to research in 2006, 63% of past co-operative bankruptcies were due to management problems. It was also found that the presence of outside director on the board of directors had a positive influence on management performance. However, there is usually no pressure from the membership to require outside directors. Therefore, some suggest that authorities such as the Financial Services Agency (FSA) shall stress this need [12].

To make raising equity for cooperatives easier, it appears to be important to understand the nature of the transferable membership capital method [15].

In general, it is known that cooperatives have it harder to get funding as compared to traditional capitalist businesses [15], although there are signs that social impact capital, or purpose capital, is on the rise. Indeed, co-op member’s favorite survey response to work at a co-operative was the one of seeking “ikigai”, i.e., “a purpose in life” [3]. It might be, as a general pattern, that where the money can come from, capitalist monetary values predominate social considerations. Therefore, due to limited profit maximization for single individuals, limited financing is a significant growth limitation for the cooperative economy, although a membership market could provide for the same economic potential. To solve this problem, some cooperatives have resorted to the method of issuing transferable membership capital, e.g., a housing cooperative raising equity capital by issuing shares and investing it in the construction projects, and after that trading the shares on the open market [15]. It is also necessary to create financial mutual aid systems in the social economy such as initiatives started by the Eitai Credit Union in Tokio [1].

How independent are SME’s in Japan?

Japanese SME’s for their survival need to form alliances with major firms that are dominating the markets. Subcontracting is so extensive in Japan that SME’s independence needs to be questioned. Such domestic loyalty networks often served as de facto trade barriers [16] and also need to be taken into account by any new co-operative businesses.

What is needed for the solidarity economy in Japan is to form loose networks, like the Atsugi Human Support Network, at the regional, national and global levels, and to engage in political action to fight against neo-liberalism [17].

Often genuinely collaborative loose networks do, tragically, not evolve without exceptional circumstances. For example, The Emergency Job Creation (EJC) program as a response to the 2011 Great East Japan Earthquake disaster achieved the collaboration among stakeholders as diverse as NPOs, NGOs, social welfare corporations, and other companies [18]. It is to hope that the solidarity economy can be more successfully promoted in the future on local, regional, and global level [17]. Ways must be found how to convince also private corporations who currently value monetary profit instead of social orientation to contribute to solidarity more consequently [1].

As per the co-operative governance principle of cooperation among cooperatives, it is critical to act on this aspect more intensively. Shared interests and synergies can be used better to intensify inter-cooperative cooperation. For example, all forestry, agriculture, consumer, and fisheries have been concerned about improved water environments. Similarly, any cooperative as connected to the member-community can facilitate access to and provision of in-home services such as healthcare together with other cooperatives [1].

The Japanese Cooperative Council (JCC) links to the International Co-operative Alliance (ICA), a similar systematic national connector is missing [1]. For the cooperatives and related organizations in the broader digital economy, the Platform Cooperativism Japan (PCJ) Consortium has started to assume such a role. There is the risk that cooperatives appear old-fashioned in the eyes of the younger generations. Increased openness, exciting and influential networks of co-operatives might be a means to rejuvenate and strengthen the movement. Academia and national innovation networks that dare to learn from and promote to an also international dimension [19] may play a vital role in that journey too.

References

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[11] CDS Consulting Co-op (n.d.). Four Pillars of Cooperative Governance. Retrieved from http://www.cdsconsulting.coop/cooperative_governance/4pcg/

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[13] Chris, M., & Sachiko, N. (2010). How can co-operative banks spread the spirit of co-operation in deprived communities?. Social Enterprise Journal, (2), 162. doi:10.1108/17508611011069284

[14] Lord, A., & Mellor, M. (1996). Women and the cooperative provision of care: the example of the ‘Fukushi Club’ in Japan. Economic And Industrial Democracy, 17(2), 199-220.

[15] Mikami, K. (2015). Raising Capital by Issuing Transferable Membership in a Consumer Cooperative. International Journal Of Social Economics, 42(2), 132-142.

[16] Dana, L. P. (1998). Small but Not Independent: SMEs in Japan. Journal Of Small Business Management, 36(4), 73-76.

[17] Kitazawa, Y. (2010). Japan’s lost decades and a women-led socio-solidarity economy. Development, 53(3), 416-420. doi:10.1057/dev.2010.46

[18] Nagamatsu, S., & Ono, A. (2017). Job Creation after Catastrophic Events: Lessons from the Emergency Job Creation Program after the 2011 Great East Japan Earthquake. Japan Labor Review, 14(1), 112-131.

[19] Miotti, L., & Sachwald, F. (2003). Co-operative R&D: Why and with Whom? An Integrated Framework of Analysis. Research Policy, 32(8), 1481-1499. doi:http://dx.doi.org.liverpool.idm.oclc.org/10.1016/S0048-7333(02)00159-2

[20] About NPO Law (n.d.). How the NPO Law came about and why it is important. Retrieved from http://www.jnpoc.ne.jp/en/nonprofits-in-japan/about-npo-law/