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Japanese social enterprises: the double face of policies1

Rosario Laratta, PhD

Meiji University, Tokyo, Japan
Sachiko Nakagawa
Keio University, Kanagawa, Japan

Everyone has the right to work, a standard of living, social life and expression of
voices, and should be an inalienable principle as stated in the Universal
Declaration of Human Rights.
However, in reality, many people are
systematically deprived of those opportunities because of their age, disability,
gender and social problems. For example, women represent the 70% of the
worlds one billion poorest people (Global Citizen, 2013). 73 million young
people suffer for unemployment (World Economic Forum, 2014).
It is
estimated that 50-70% of 101 million children being out of school come from
minority and indigenous population (Curtis, 2009). Therefore, as the European
Commission (2013) suggests, the inclusion of marginalized people is one of the
most pressing global public issues which we need to deal with. Social
enterprises are recognized to be an effective and powerful tool to achieve social
inclusion. They provide participatory opportunities for excluded people by
practicing democratic principles of management and governance aimed at
promoting a solidarity-based economy (e.g., Borzaga and Depedri, 2009;
Nyssens, 2006). However, social exclusion2 is a phenomenon which requires
This article is a working paper and it looked at one aspect only of the study. It is the
intention of the authors to expand it in his final version with quantitative as well as the
qualitative data presented here.
Although the term social exclusion is widely used in political, social and academic
spheres of the current world, it does not have long history. According to Amin et al. (2002),
Rene Lenoir (the French Minister for Social Action) was the one to invent this term. He
referred to the mental and physical disabled, suicide people, elderly invalids, abused
children, drug addicts, single parents and other people having social problems as the
excluded. Those groups composed 10% of the French population and were not covered by
social insurance. At the time, the excluded did not clearly include the unemployed and
people having a risk of deprivation of opportunities to participate in economic activities.
However, the late1970s and 1980s recessions triggered the growing number of the

much more then the only work of social enterprises to be properly addressed.
Many researchers have mentioned that cross-sector partnership is crucial to
address social challenges (e.g., Biermann et.al., 2007; Herranz et.al., 2011;
Jacobs, 2000; Kitzi, 2002; Podziba, 1998; Selsky and Parker, 2005; Smallborne
et. al., 2001; Spear and Bidet, 2003; Vidal and Claver, 2006; Walzer and York,
1998 ;Ziomas et.al., 2001) and some of them have tried to identify factors which
determine successful and long-lasting partnership (e.g., Arsenault, 1998; Austin,
2003; Linden, 2002). For example, Fosler (2001) suggests that a vision
identifying important public purposes, a scale of available resources, enough
time and a supportive environment such as civic capacity, network of leaders,
respect for diversity and effective policy and service system structures make
partnership successful. Bryson et al. (2006) points several factors like trust,
formal and informal governance mechanisms, resources and tactics to deal with
conflicts and public value as necessities for successful partnerships. Osborne
and Murray (2000) indicate that previous working relations affect development of
partnership. However, there are few researchers who have investigated what
social enterprises should do concretely to involve governmental and for-profit
sectors in their civil society attempts (cf. Austin, 2003; Jette and Vaillancourt,
This study attempts to understand the necessary conditions which need to be
unemployed and the poor, so how to help those people suffering from multiple
disadvantages became a serious public problem in European countries. Accordingly,
work and being paid enough was recognized as the most important factor to tackle social
exclusion because it enables people to not only get higher level of income than benefits but
also receive health and educational services, secure housing, enjoy social interaction and
broaden choices of lives (e.g., Boushey et. al., 2007; Hills et.al., 2002; Honneth, 1996; Parijs,
1995; Pierson, 2002). Therefore, the European Commission and Council has been
committed to making and practicing a new economic strategy to produce more and better
jobs and greater social cohesion towards social inclusion. In order to assess actual
conditions about social exclusion and take appropriate measures to deal with them, the
European Commission and Council also developed social indicators consisted of risk of
financial poverty, no contact with work, long-term unemployment and persistence of poverty
(Atkinson et al., 2002). Although social exclusion has been discussed at national and
international levels, the role of community is important to not only provide safety net but
also maintain healthy community. Therefore, many local initiatives have been established
in the world. For example, in Spain, social integration initiatives like associations, small
charitable trusts and associated workers cooperatives to deal with long-term unemployment
and the lack of rights to benefits appear at a local level (Vidal, 2001). In Finland, there is a
movement to form village co-operatives for providing social welfare and health services and
creating jobs for unemployed villagers (Pattiniemi et. al., 2001).

satisfied if an effective partnership between social enterprises and the other

sectors has to produce synergetic results. Its findings will give new insights on
social enterprise management and governance as well as on the academic and
practical development of the third sector towards an inclusive society.
2.1. Theories for this study
For this study we look specifically at two main organizational theories: a) the
theory of partnership; b) the theory of the third sectors role. Below, we give a
synopsis of those two theories.
a) There are many definitions of partnership. Nicholls (2005) defines
partnership as a relation where two or more organizations having compatible
objectives form an agreement to work together in a mutual beneficial manner,
often doing things together that might not be possible alone. Sink (1998) also
defines partnership as the process by which organizations with a stake in a
problem seek solutions and pursue objectives which they cannot achieve
working alone. While some scholars use synonyms of partnership such as
collaboration and cooperation without distinction, others clearly distinguish them.
For example, Himmelman (1996) separates partnership into four stages. The
first stage is that of networking aimed at the exchange of information for mutual
benefits. Participating organizations do not share resources in this stage, only
information for a limited time. His second stage is coordination and involves
intermediary organizations or lead agencies accepting the role of facilitating
communications and encouraging participating organizations to alter their own
activities for mutual benefits and the achievement of a common purpose.
There is no organization to monitor the progress because collectivity and mutual
understanding are more emphatic and so resources are not shared among
participating organizations. The third stage, cooperation, operates through
formal written agreement and contracts. Participating organizations exchange
information, alter their own activities and share resources based on formal
documents for mutual benefits and the achievement of a common purpose. It
needs a substantial amount of time and enables participating organizations to
access each others areas of activity. The fourth stage is collaboration and it is
the most difficult and high-level form of strategy for partnerships. It requires
participants to exchange information, alter their own activities, and share full
resources, enhancing each function for mutual benefits and the achievement of

a common purpose. In this stage, each organizational priority is secondary to

the priorities imposed by the collaboration. Fosler (2001) also suggests that
collaboration needs more things than cooperation. A form of collaboration widely
discussed for decades is what Ostrom (1999) referred to as co-production, the
mix of activities that both public service agents and citizens contribute to the
provision of public services.
Co-production is different from traditional
volunteer activities since it occurred within a context of professionalized service
delivery. According to Bovaird (2005) and Pestoff (2008, 2009), public services
co-production - as a form of partnership between the public sector and citizens has the possibility to change not only ordinary service provision system but also
promote democratic policy making and governance style.
b) Kramer (1981) states that the third sector is expected to perform the
following roles:
Service provider role - unlike governmental uniform service, the third sector can
correspond to individual needs more specifically. They can supplement
services which governments and for-profit companies cannot provide sufficiently.
Besides, they are primary providers in services where neither governments nor
for-profit companies are willing to or able to offer.
Vanguard role - the third sector pioneers new approaches, processes and
programs in service provision as a change agent. If their innovative attempts
are successful, they could be also adopted by other sectors. Thus, change of
ordinary social and economic systems could occur.
Value-guardian role - the third sector facilitates a certain group of people to
express, spread and guard their particular views and preferences. It is
necessary to keep diversity and promote democracy.
Advocacy role - the third sector speaks for marginalized people, watch and give
suggestions to governments to effect changes and improve policies.
In time where contracting out from governmental sector and commercialization
and competition with for-profit companies in the market are common situations
faced by the third sector (e.g., Salamon, 2002; Smith and Lipsky, 1993), how the
third sector is able to fill various roles beyond mere service provider is crucial to
continue to contribute to building an healthy society.
2.2. Institutional situation and policies affecting WISEs for the disabled in
Although interest in social enterprises is increasing in academic circles,

recognition about social enterprises are still low among policy makers and the
public in Japan. Against the background of an increase population suffering
from unstable employment, poverty and weakened community bonds, in 2011
the Japanese government set a special team to tackle social exclusion
The government also clearly stated the role of nonprofit
organizations (NPOs) in the urgent policy proposal for social inclusion in the
same year; however, the term social enterprise was not mentioned. Same
situation occurs in the formulation of other policies. For example, the
government positioned NPOs, social businesses/community businesses as
crucial actors to revitalize devastated areas of the Great East Japan Earthquake
and showed willingness to support them in the master plan, but again the term
social enterprise did not appear in it. Actually, unlike many European countries,
there is not a specific legal form for social enterprise in Japan. In 2010, the Bill
on Social Cooperatives was going to be submitted. However, it has never been
submitted since only limited people supported this. Lack of discussion in the
whole society and institutional framework makes the notion of social enterprise
ambiguous, underestimates their social, economic and political contribution and
hinders social enterprises development in Japan.
By focusing our research on social enterprises in the field of work integration for
the disabled (WISEs), one of the active fields of Japanese social enterprises, we
found the following three types of policies shape their profiles as shown in Table
Table 1. Three institutions affecting WISEs in Japan
Typology A those are policies directed to service providers of disabled in
Typology B those are policies targeting the categories of labor for disabled
and related forms of integration
Typology C those are policies oriented specifically for those people
categorized as mentally disabled
Typology A Service Provider as Target
Since 1951 governments, QUANGOs, and social welfare corporations have
been monopolized services related to welfare and human rights of the disabled
in Japan. However, these services were not always effective to realize social
integration of the disabled. The number of vocational support centers was limited

and only disabled people who had strong possibilities of return to society really
made use of them. Besides, these centers were established in places far from
disableds hometowns and therefore those institutionalized people were rather
isolated from the communities and often did not receive the human treatments
they deserved (Nishio, 1986; Suzuki, 1983). As a consequence of this, most
disabled were kept in their own homes, again far from society but at least near
their relatives.
It was against this background that in the 60s, WISEs began to emerge. Their
scope was to provide vocational training and work for the disabled in local
communities. The purpose was to encourage disable people to interact with
other people while living in their own hometowns.
In 1977, the Association for Small Workshops (Kyosaren) was established. This
consisted of 16 workshops aiming at exchanging local communities to think
about problems relative to the disabled and the social issues those would
comport. In 1981, just a few years later, another organization was established.
This was the Association for Tackling Exclusion (Kyodoren) whose purpose was
to build new social and economic systems and to spread social cooperatives in
Japan. Such action triggered the development of a social movement and a
remarkable development of Japanese WISEs after 1980s. Although it is still
debated what was the actual number of WISEs at this time, we found good
proofs to believe that there were around 800 WISEs in 1981 and this
represented the double of the vocational support centers operated by
governments, QUANGOs, and social welfare corporations in the same year
(Ministry of Health and Welfare , 1981).
Since then WISEs were often attributed with a great social significance. Some
local governments began to offer subsidies for these WISEs. However, despite
this financial help, many WISEs were managing their activities with severe
financial restraints, paying their disabled workers not enough to meet their
livings. According to the Research Committee for Systems and Support for
Work Integration of the Elderly and the Disabled (2000), some WISEs who
manage small workshops paid their workers no more than $125 a month.
However, this situation changed in 2003 when a growing untapped need for
services, government financial difficulties and necessity to improve quality of

services and unequal relationships between service providers and users

coupled with a huge public expectation toward the third sector as a new provider
prompted the Japanese government to include WISEs as a lawful service
provider via the Support Payment System for the Disabled. This was
eventually repealed because the government failed to meet the increasing
demand for subsidies coming from third sector organizations that were
constantly dealing with high number of requests for services.
It was three years later, in 2006, when the government decided to promulgate
the Act on Services and Support for the Disabled3. The Act states that WISEs
can engage in one or more of the following two categories of services for work
integration of the disabled. The first category is the Transitional Support for Work.
This category of service can be of two types: a) for disabled people who hope to
work in for-profit companies; b) for those disabled people who hope to acquire a
qualification to start a new business or work from home. The Act also specifies
that these Transition services are limited to disabled people who are under 65
years of age and that the integration into the mainstream labor market has to
take place within two years. Second category of services is named Continuative

In order to provide comprehensive support encompassing from work, employment, social

participation and daily life in local communities, the Act was revised in June of 2012 and
started from April of 2013. Accordingly, the name of the Act was changed to the Act on
Comprehensive Services and Support for the Disabled. Some WISEs object to the Act
because of imposing payment of 10 percent of the fees for services on the disabled and
distinguishing the disabled and people not having disorders as users and staff even if
they are engaged in same jobs. Views on these policies are different among WISEs. For
example, the recent public naming of one non-cooperating for-profit company is thought to
have applied considerable pressure to other companies to renew their efforts to increase
their own quota of disabled employees. Some WISEs consider that the number of for-profit
companies consulting with them is increasing year by year; on the other hand, others have
opinion that it is not enough to achieve work integration. They also indicate that many of
the bigger for-profit companies would rather bear the financial penalty than take on disabled
workers and have therefore not tackled work integration seriously. Concerning a system of
special subsidiary, a certain WISE claims that most of the disabled workers taken on by a
special subsidiary are given part-time jobs that are not related to the parent companys
business. The situation is further severe when comes to mental disabled. In spite of that
the Act requires for-profit companies to hire the mentally disabled, many firms stipulate
mental disorders as one of the justifiable reasons for dismissal in their office regulations.
WISEs supporting the mental disabled tell that many mental disabled are forced to either
enter hospitals or keep at home because understanding and preparation for accepting
mental disabled is not still enough in Japanese society. Such factors have negative effects
on hiring the disabled and as a result only 5.4% of the 7.4million disabled can find jobs in the
mainstream labor market (Cabinet Office, 2010; Ministry of Health, Labour and Welfare,

Support for Work in which, unlike Transitional Support for Work, there are no
time limits for work integration. Also in this category, the Act distinguishes two
types: a) A-type which targets the disabled under 65 years of age and stipulate
an employment contract with them; b) B-Type which provides a service for all
disabled regardless of age and does not demand any employment contract.
Typology B Work Integration as Target
The origin of policies for work integration of the disabled in Japan dates back to
1960. In fact, although the Act on Welfare for Physically Disabled was
established in 1949, it did not cover the possibility for the disabled people to
work in the mainstream labor market. However, the 1955 ILO Convention 99
on Vocational Rehabilitation and Employment (Disabled Persons) and the trend
in a number of countries in the 1950s to introduce legislation to promote
employment of the disable prompted the Japanese government to tackle work
integration as a national problem. Consequently, the Japanese government
established the Act on Employment Promotion of the Physically Disabled in
1960. The Act was relatively remarkable because it introduced the first quota
system in Japan; however, it had some defects. Firstly, it was applied to the
physically disabled only while the ILO called for full participation and equality for
every kind of disorders. Secondly, the achievement of the specified quota was
optional, not binding. Thirdly, suggested quota system was complex and
unclear for employers to understand. Fourthly, the lowest wage defined by the
Act on Minimum Wages did not apply to the physically disabled employees.
Therefore, the Act was not effective in realizing work integration.
On the basis of unsuccessful experience, in 1976 the Japanese government
drastically revised the Act on Employment Promotion of the Physically Disabled.
Accordingly, the Japanese government set the percentage of employees with
disabilities which the workforce in national and local governments, for-profit
companies, and QUANGOs should comprise as mandatory. The percentage is
different among national and local governments, for-profit companies and
QUANGOs. For instance, in the case of for-profit companies, the government
required those with more than 50 employees to have 2% of their workforce made
by disabled employees. This percentage was lower at the beginning when the
Act was just started and it has increased gradually year by year. Originally, the
target of the quota system was limited to the physically disabled; however, in

1987 people with learning difficulties were also included. As a consequence of

this, the name of the Law was changed from the Act on Employment Promotion
of the Physically Disabled to the Act on Employment Promotion of the Disabled.
The mentally disabled have long been excluded from the Act, and it was not until
2006 that an amendment to the Act obligated employers to hire those people. In
order to encourage organizations to achieve the quota, the government
introduces several measures. Among those, a remarkable one consists in the
government request to those organizations which could not achieve the quota to
make and submit a plan to ensure increase of employment of the disabled and in
case of failure in following this government directive their names would appear
on a black list as non-cooperators for work integration with consequence of lost
trust not just from the government side but also among the general public. In
1977 the System of Payment for the Employment of the Disabled was enforced.
This originally imposed that a penalty of $625 a month was levied on for-profit
companies with more than 301 employees for every disabled person short of the
quota. On the contrary, for those companies of a similar size and structure who
achieved the quota a sum of $337.5 a month was awarded. As a result of
amendments on the Act on Employment Promotion of the Disabled, the target
for the System of Payment for Employment of the Disabled was extended to
for-profit companies with more than 201 employees and, apparently, in 2015 this
is going to be extended to include companies with more than 101 employees.
In order for the disabled workers to continue to work in firms, the government
introduced Employment Support by job coaches in 2003. Job coaches are
those who help to develop communication and work skills for disabled
employees. They also give advices to employers over a period of maximum 8
months on the effects of various types of mental disorders on work assignments.
There were 1061 job coaches working for around 3100 disabled in Japan in
2009. 84.8% of those disabled who received help from job coaches continued to
work in firms (Ministry of Health, Labour and Welfare, 2009b).
For those disabled workers who cannot be located in the firms main office, they
can benefit from a System of Special Subsidiaries. This was established by the
Government in 1976 and consists in a number of limited companies with an
overall workforce of more than 20% disabled (or more than 30% if it included
people with learning difficulties) and with special facilities for disabled employees

such as barrier-free buildings and highly trained instructors. Firms are allowed
to establish special subsidiary companies as their affiliates just by getting
authorization from the Ministry of Health, Labour and Welfare, and they are then
able to register the number of disabled employees in their special subsidiary
affiliates as if they are employed in their main branches. In 2009 an exception
was made in the Law for those firms who have difficulties to establish special
subsidiaries due to lack of either finances or instructors, though they are willing
to pursue employment of the disabled. The exception consists in the fact that
they can count the number of disabled employees in their different subsidiaries
as if they were employed in just one company. The number of special
subsidiaries increases year by year against the rise of percentage of the
workforce allocated to the hire of the disabled. In 2013, there were 378 special
subsidiaries in the nation (Ministry of Health, Labor and Welfare, 2013).
Typology C Mentally Disabled Person as Target
Before WWII, mentally disabled people were mostly kept at homes as part of the
then public order legislations. Although the law to have the mentally disabled
going to public mental hospitals was established, such hospitals were not able to
accommodate enough due to budget constraint.
With the establishment of the new Constitution the national government had the
responsibility to promote public health, therefore in 1950 the Mental Hygiene
Law was enacted. For the purpose of providing appropriate medical care and
support for the mentally disabled, public mental hospitals were established
within each prefecture throughout Japan. However, in 1954 there were only
30,000 public hospital beds available, whereas the number of mentally disabled
who needed to be hospitalized were 350,000. Therefore, in addition to private
clinic and home visits, the government subsidized mental hospitals operated by
the Third Sector.
In 1987, the Mental Hygiene Law was revised and also the name of the Law was
changed to the Mental Health Law. The new law was highly remarkable
because it declares that the purpose of the law is protecting human rights of the
mentally disabled and promoting re-integration of the mentally disabled in the
society. In 1993, group homes were legislated and the Center to Promote the
Returning of the Mentally Disabled to Society was established. In 1995, in

order for the mentally disabled to achieve independence and participate in

society as well as receive appropriate medical treatment, the name of the law
was once again changed from the Mental Health Law to the Law related to
Mental Health and Welfare of the Person with Mental Disorders. Under the
new law, establishment of vocational support centers and centers to support
community life of the mentally disabled were advanced. Furthermore, home
service for the mentally disabled was expanded so that they could continue to
live in their hometowns.
2.3. Typologies of WISEs for the disabled in Japan
More than 1900 WISEs provide work and vocational training for the disabled
under the Act as of May of 2012 (Welfare and Medical Service Agency, 2012).
The authors are conducting research on WISEs since 2008 and they found that
Japanese WISEs can be categorized into four types. The first type represents
those WISEs who aim at connecting the disabled with the mainstream labor
market. The second type hires the disabled as their end employer because of a
question about effectiveness of work integration policies. The third type
provides opportunities for the (severe) disabled so that they can enjoy social life.
The fourth type supports the mentally disabled (and alcoholics) to regain
self-confidence and necessary skills in order for them to come back to society.
Table 2 gives a more visual perspective on those four typologies of WISEs.
Some of those cover two or more of those characteristics.
Table 2. Four types of WISEs for the disabled
Social goal
Type 1


-Connecting the disabled -Making the disabled work in for-profits

with the mainstream labor as trainees and part-timers, teaching IT
skills and offering direct works in
for-profits, dispatching job coaches to
-Main founders are people having
experience of work in for-profits
-Board members are founding members
and their acquaintances
-Local residents do not participate in
decision-making processes
-The number of workforce and structure

of income is different among WISEs

-Average current income is $1.1 million
Type 2

-Paying enough wages for -Implementing a wide range of business

the disabled workers acting activities such as agriculture, retail
as a stable employer
store, pastry shops, printing and posting
of advertisements
-Main founders are people having
questions about economic and social
systems, low wages of the disabled and
desiring to create a society in which all
people can live with dignity
-Management style is open to various
-Some WISEs distribute money to the
disabled workers for solidarity
-The number and structure of the
workforce and the income is different
among WISEs
-Current income ranges from $420,000
to $2.6 million

Type 3

opportunities -Offering piecework done at office and
about production for the craft work for the disabled
disabled to enjoy social life -Main founders are family members, the
disabled and public officials in charge of
issues about the disabled
-Families have effects on management
and governance
-Local residents have decision-making
power as a board member and
-7 staff and 6 volunteers work on
-Average current income is $323,000
and most of them come from public

Type 4

- Supporting the mentally - Providing services for local residents


disabled (as well as the and acting for building relationships with
alcoholics) to come back to communities
the society
-Main founders and managers are
psychiatrists, social workers and health
-Disabled users have a decision-making
power through some ways
-Number of staff is around 10 and there
are no volunteers
-Average current income is $435,350
and around 80% of them come from
public subsidies.
In this study we focuses on 18 Japanese WISEs located in Sapporo, Tokyo,
Shiga and Minoo. Those are known to be pioneering locations in terms of active
WISEs and policies for employment of the disabled. All target WISEs clearly
mention in their mission statements to supporting the disabled so that they can
live a life of independence even when they belong to the third and fourth types of
WISEs illustrated in Table 2.
In order to understand the actual level of partnership between WISEs and the
other sectors, partnership effect on wages and employment of the disabled
users and concrete backgrounds and processes of partnership, we implemented
semi-structured interviews with managers, secretary-generals and staff in
WISEs. During the interviews, we investigated the following factors:
1. Objective of WISE to pay enough wage for the disabled workers and
reason to set such objective;
2. Average monthly salary paid by WISE for disabled users; number of
disabled users who could get a job in the mainstream labor market in the
past 3 years;
3. Strategies used by WISEs to increase disabled users wages as well as
strategies to connect disabled users to the mainstream labor market;
4. Type of goods and services WISEs provide and the processes of
production and the delivery of those goods and services;

5. Characteristics of direct orders from for-profit companies and contracting

out from governments; incentives and barriers to engage with for-profit
and governments;
6. Advocacy activities put in place by WISEs; incentives and disincentives
for WISEs to engaging in advocacy activities;
We then compared answers of WISEs who provide adequate wages for their
users well-being as well as putting efforts in connecting their users to the
mainstream labor market steadily by forming solid partnership with governments
and for-profit companies with those WISEs who did not achieve such
accomplishments as a result of their failing in building long-lasting partnership.
Besides, we conducted interviews with their some government and for-profit
partners to get their views towards social inclusion and WISEs attempt.
Our research clearly demonstrates that WISEs who build successful
partnerships with governments and for-profit companies are those who also take
the initiative in showing those sectors that, despite their merely provision of
wages and vocational training for their disabled users, there are other possible
actions they can undertake to contribute concretely to the integration of disabled
people into the society. When WISEs act as initiator and promoter of a
partnership, governments and for-profit companies are also more likely to take
into serious consideration the civil values associated to their actions. This, in turn,
goes to impact on the consolidation of these partnerships.
Sapporo Challenged
Sapporo Challenged is a WISE who connects around 20 disabled with the
mainstream labor market in the past 3 years and pay the disabled users $550 a
month on average4. It was established in 2000 on the basis of the belief that PC
is a powerful tool to eliminate many barriers the disabled usually face and
promote participation of those people in society. Staff and volunteers of
Sapporo Challenged have taught various IT skills encompassing from word,
excel, CAD, the way of making illustrations to designing websites so that the

Due to added value work, even the disabled users cannot go to work steadily because of
their health and mental conditions earn $200-$300 a month. This amount is nearly same
as or exceed current national average wage being paid to the disabled.

disabled can have many choices, get a better and more rewarding job in the
market and achieve economic independence. During the interview, the chief
director of Sapporo Challenged described us how he initiated a partnership with
a for-profit company. He said:
When I first met the director of the company, I told him that I had taught
IT skills to the Sapporo Challenged disabled so I was trying to help those
qualified people to find jobs related to IT such as making illustrations,
producing websites and inputting data. I also sincerely expressed my
wish to have some of those skilled disabled employed in his company. A
deal with this company did not start immediately. It took about 2 years
before we receive an offer by the company. During these years we
continuously reminded them of our mission and emphasize how our
working in partnership could have expanded opportunities for the
disabled. (Interview with the director of Sapporo Challenged of
November 21, 2012)
This first initiative led Sapporo Challenged to establish other partnerships. For
example, an Internet service provider company named Hokuden Jyoho
Techonogy was moved by hearing an informal talking on disabled employees by
people who work in the company and who also now act as staff and volunteers
of Sapporo Challenged. After the talking, Hokuden Jyoho Techonogy thought
about how they could help for the disabled to get jobs. In 2004, they launched
a new service named Sacchale5 Set Up Course where the disabled users of
Sapporo Challenged visit new customers homes, and help to set Internet
connections and e-mail settings. Wages of those disabled are paid by
Hokuden Jyoho Techonology. In order to encourage many new customers to
apply this service and to provide many wages for disabled workers, Hokuden
Jyoho Techonology offer free service and discount for the applicants. Currently,
around seven to eight for-profit companies are collaborating in similar ways with
Sapporo Challenged. Table 3 shows the main fields of activities where such
collaboration is taking place.
Table 3. Companies activities done in collaboration with Sapporo
Giving keywords to photograph
Editing photograph

It is a nick name of Sapporo Challenged.


Making a subtitle of videos

Managing online message board
Editing images in catalogues
Inputting data of questionnaire into computers
Rewriting manuscripts
Collecting data
Producing, updating and revising websites
Business relative to affiliate
Making an illustration
Monitoring the data and reporting them
Tape transcription
In September 2002, after getting information that the Ministry of Health, Labor
and Welfare demanded the budget for IT Support Center for the Disabled,
Sapporo Challenged quickly made the Proposal for IT Support Center for the
Disabled in Hokkaido. Sapporo Challenged visited the IT promotion section
and health and welfare section of the Hokkaido Prefectural Government and
Sapporo Municipal Government with the proposal and suggested concluding
partnership for IT Support Center for the Disabled in less than a week. In this
occasion, the Sapporo Municipal Government had interest in the suggestion and
worked for establishment of IT Support Center for the Disabled with Sapporo
Challenged, but they also requested Sapporo Challenged not to mention
disabled providers in the pamphlet for the IT Support Center for the Disabled.
Sapporo Challenged repeatedly insisted that running in the name of disabled
providers in the public pamphlet was a positive thing because it would have
brought hope and encouragement for disabled providers as well as for other
disabled people who are excluded from society. Sapporo Municipal Government
did not understand easily and although the name of a disabled provider was
finally printed with some specific explanations, Sapporo Challenged realized in
that occasion that it is essential to set places where social enterprises and the
government exchange ideas and understanding about disabled people, their
potential abilities, their limitations and from there think father on what roles social
enterprises and government must fill to solve those problems together.
Between April and August 2004, Sapporo Challenged organized a roundtable
with different sections of Sapporo Municipal Government (the health and welfare

section, IT section, strategic planning section and industry promotion section),

other social enterprises, and an association of small workshops, to launch the
first organized joint study on this thematic. This study meeting was held seven
times and two inspections to innovative cases were implemented under
initiatives of Sapporo Challenged. It gave big effects on the Sapporo Municipal
Government and made the local Government clearly realize that what it is most
needed from them to do for the disabled is to make policies and frameworks
enabling the disabled to find hope for their live and connecting effectively many
disabled with society under partnership with citizen. As a result of this,
Sapporo Municipal Government established the Committee for Supporting the
Disabled Working at Home through IT and asked social enterprises including
Sapporo Challenged to participate in the Committee. Later Sapporo Municipal
Government introduce a subsidy for all social enterprise who support the
disabled working at home through IT and began to promote the activities.
Pao was established in 2002 to reintegrate the disabled with the mainstream
labor market. Their understanding was that the disabled who were employed in
small workshops could not earn enough money for their living and therefore they
needed being reintegrated in the mainstream labor market. In the past three
years, around 30 disabled users at Pao could find jobs in the mainstream labor
market. The representative of Pao said to us during the interview:
We want to establish policies and institutional framework enabling many
disabled to work actively in society. So, we diffuse the information among
our potential partners on what policies and institutional frameworks are
needed concretely to achieve such a goal. (Interview with the
representative of Pao of November 19, 2012)
As a first attempt to collaborate with Kiyota Ward Office, Pao came up with the
plan to employ disabled users in local cafes and restaurants of public facilities.
The Kiyota Ward Office took this initiative in consideration and ask Pao to
manage a cafe and restaurant of an office building and community center. This
first collaborative experience led to further partnerships. In fact, late Pao applied
to the Sapporo Municipal Government in order to management the Genki Cafe
Flat that is set in the Sapporo Social Welfare Center. Pao gave a list of

suggestions its application: a) the Genki Cafe Flat would have been a place
where the disabled workers and people having not disabilities work together in a
friendly environment which would have reflected a regular workplace; b) the
Genki Cafe Flat should have been as the first of the Sapporo Social Cooperative
Policy series aiming at spreading social economy through subsidies to
organizations practicing solidarity and democracy 6 . The Sapporo Municipal
Government was impressed by Paos ideas. Indeed, besides entrusting the
management of Genki Cafe Flat to Pao, the Sapporo Municipal Government
further set Genki Cafes in the office building and the Sapporo Central Library as
places where the disabled and people not having any disorders work together.
Currently, around 25 people work in three Genki Cafes.
Another initiative of Pao was that of proposing to both for-profits and local
government other tasks in which disabled people could have engaged such as
removing sheets, carrying them, washing them and covering them in the case of
bed making, and expand those activities in order to create work for people
beyond disabled workers. This idea made for-profit companies and governments
realize that the disabled people can become a powerful asset when their
capabilities are discovered and carefully mobilized. The consequence of this
new vision was that five for-profit companies and governmental organizations
place an order on Pao for various works such as maintenance of building
materials, cleaning welfare instruments and bed making.
Step Yume
Re-integration of the mental disabled (and alcoholics) with society is a big
challenge for WISEs because there is still a strong sense of alienation caused by
abandonment from family members and friends and prejudice from the public.
However, Step Yume is a social enterprise that has steadily connected those
people with society. In 2013, there were three cases of disabled people who
gain fully recovery from their mental illness and were reintegrated into society as
well as in the mainstream labor market. According to the director of Step Yume,
this success of his organization must be seen as the continuous efforts to
involve for-profit companies and governments in their civil attempts. The
director of Step Yume does not merely provide vocational training for the
disabled users, he participates in the Council for Supporting the Disabled in Ota
Ward as a vice president and in addition, he has initiated the Section for

Concerning details on Sapporo Social Cooperative Policy, please see Nakagawa (2013).

Supporting Employment of the Mental Disabled. He then used this special

Section to provide training for for-profit companies and governments, to make
them understanding what is mental disorders, how should bosses and
colleagues communicate with people suffering from mental disorders, and what
environment and conditions are necessities for the mental disabled to recover
from their symptoms or keep them under control. Those types of training are
given nine times per year. Step Yumes director also propose to his for-profit
and government partners to dedicate part of his time to listen the opinion and
complains of mentally disabled workers employed by his for-profit and
government partners/trainees. Those initiatives brought to an increase year by
year of for-profit and government organizations who are now willing to host a
practical vocational training by Step Yume in their institutions. While the
number of practical vocational training held in for-profit companies and
governments was 43 and 37 respectively in fiscal year of 2012, that of practical
training held in for-profit companies and governments was each 80 and 60 in
fiscal year of 2013. Through the collaboration, as a whole, 54 disabled
including users of Step Yume could find jobs and come back to society.
Yume no Ki Okhotsk, Ashitaya Kyodo Kikaku, and SUN
When compared to those successful stories, there are WISEs where disabled
are underpaid for their work and this is often the result of a underestimated value
of having long-lasting partnerships with for-profit and governmental
organizations. One of those unsuccessful stories is represented by a WISE
named Yume no Ki Okhotsk. Here, the disabled users are paid around $100.
During the interview, the representative of this WISE motivated his not
cultivating partnership with other sectors in this way:
Abashiri city has suffered from a crisis in local economy and decline in
population, so for-profit companies and the Abashiri Municipal Government
cannot afford to think about employment of the disabled. (Interview with the
representative of Yume no Ki Okhotsk of November 16, 2012)
We found that this comment was not unique to this WISE. Among the 18 WISEs
we interviewed, those who were not interested in taking a lead in creating
partnerships with other sectors were likely to stress a similar prejudice, i.e. that
for-profit and governments have no interest in the disabled. However, Yume no

Ki Okhotsk has done nothing to try to initiate a plan for increasing employment
and revitalize the city on the basis of partnerships, propose it to for-profit
companies and Abashiri Municipal Government and take the lead in carrying out
it as, for example, Pao did. Ashitaya Kyodo Kikaku was also another of these
examples. This WISE sell fresh organic products in its shops but its activity could
not expand over the yeras because it did not build solid partnerships with
for-profit companies and governments, and consequently cannot pay even a
minimum wage for their disabled workers. SUN is another WISE that did not
succeed in implementing good partnership. This WISE did invite officers from
the Welfare Office of Meguro Ward as well as with some IT companies, but the
discussion did not go in a right direction because the scope was not to
collaborate in addressing the disabled people issues but just confined on how to
be supported as an organization in charge of those disabled. The result of this
self-oriented strategy brought this WISE to very little achievements. In fact, in the
last 20 years only 3 disabled workers found stable employment in the main
stream labor market.
This study suggests that social enterprises cannot build cross-sector
partnerships - an essential factor for achieving social inclusion - if they are
merely engaged in a service provider role. When their mission is confined to the
satisfaction of their constituencys needs only without a vision for the future or
their mission, consequences are: low wage rate for the disabled workers, few
disabled get stable job in the main stream labor market, lack of task-progress
among disabled workers, financially unsustainable programs by the WISE, lack
of understanding from for-profit and governmental organizations about the
operation of WISEs, WISEs became passive complainers of other sectors, lack
of trust among sectors, etc. In those cases, it is the prejudice that often takes
over on the rationality - collaborating with other sectors is seen in a negative
way; the organization tends to assume that other sectors are not interested in its
mission or have nothing to offer to their programs. On the contrary, what we
learnt from the successful stories - some of which were briefly reported above is that as an infrastructure of civil society, social enterprises should always think
about innovative ideas based on solidarity and share those ideas with other
sectors (government and market), create the environment where those ideas
can be freely and fully explored and, if collectively agreed, change the current

community governance and management systems into more effective ones.

By filling a vanguard role, social enterprises can have the unique opportunity to
move governments and for-profit companies to fight against social exclusion in
partnership and involve those partners in their traditional civil attempts towards
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