The Japanese population is declining, especially in rural areas, and the trend is clear1. With an aging Japanese population and a relatively stable, but low, birth rate2, the generation gap is widening. Another consequence is that pressure on public finances and those of local communities to meet the care and housing needs of this elderly population remains strong. Hamamatsu, a coastal city of 800,000 inhabitants situated 250 km south of Tokyo, is no exception to the rule. However, it has implemented an innovative strategy to finance its vital infrastructure: twenty-year wastewater management concessions with some original terms. This duration is new in Japan, where contracts are traditionally granted for one to three years, and includes an additional requirement: bidders must put forward innovations to re-energize the city.
“The contract is for operating, maintaining and renewing the facilities at the city’s largest wastewater treatment plant. Each bidder had to suggest innovative solutions, for instance, revitalizing the city by encouraging the development of an ecosystem of social startups,” states Shiori Sekiguchi, Concession Project Coordinator for Veolia in Japan.
The project presented by Veolia was chosen in March 2017. Veolia proposed to implement an innovative Pop Up initiative to boost the local social economy by involving the city’s population.
“During the diagnosis, we realized that there was no existing network of entrepreneurs in Hamamatsu. So it is difficult for them to get advice and feedback. We therefore put forward the concept of an incubation scheme allowing social entrepreneurs to develop their ideas and their business,” recalls Satoko Ibi, Assistant Manager of the Technical Department.
The program submitted to Hamamatsu is based on the Pop Up by Veolia program, which began in 2014 and has already been deployed in several countries by 2EI Veolia (see boxed text).
“We worked with the ‘Impact Hub Tokyo’ incubator to identify the existing local players and needs. We also set up a partnership to provide an excellence program for local entrepreneurs,” continues Satoko Ibi. A call for applications will be launched in September 2019.
Two co-construction examples
India. Incubated in 2018, FORCE (Forum for Organized Resource Conservation and Enhancement) is a non-profit, non-governmental organization. It focuses on solving community-level sanitation problems. Veolia worked with the organization to reinforce the Nangloi Water Service’s social welfare team. The teams will meet 300 households weekly over a six-month period in Nangloi (in the New Delhi agglomeration) to raise awareness about the importance of drinking water and legal water connections.
France. Incubated in 2016, La Cravate solidaire is an organization based in Lyon. It supports entry into employment by providing men and women with professional clothing free of charge and offering job seekers the opportunity to sit practice interviews. Veolia worked with the organization, running three clothing drives at Campus Veolia, hosting the entity at its Campus, and holding mock interviews for beneficiaries.
An intensive six-month program
“Our plan is to choose eight to ten entrepreneurs, who will then be trained from December 2019 to May 2020,” explains Nina Cambadelis, Evolution Director - Japan, Head of CSR and Sustainability for Veolia in Asia. The program will allow the social entrepreneurs to 1) clarify their projects, goals and clients, 2) define and develop their business model, 3) prepare their marketing and financing strategy, and 4) prepare themselves for a pitch event.
“Veolia has committed to supporting the program and the process. This process will be repeated every year or every other year,” states Nina Cambadelis.
This represents a highly innovative approach. Traditionally, the Japanese support the local economy via occasional financial aid or sponsorship actions, for example, for annual events. “We suggested a very different approach to structure the local players and produce a social economy ecosystem,” explains a delighted Kazuhiro Uchino, Vice-President of Veolia in Japan. The idea of a social economy is also something very recent in Japan, where actions of this kind are primarily carried out by NGOs and charitable programs.
A twenty-year concession awarded to a global player, a host of innovative solutions, and a long-term scheme for developing local initiatives: “Japanese local authorities will be keeping a close eye on this project’s implementation, as many cities are facing the same problems. The market will understand the added value that we can bring,” Kazuhiro Uchino enthusiastically observes.
Some 100 social enterprises incubated by Pop Up by Veolia
5 years’ experience
14 programs worldwide
Some 20 collaborations (partnership between targeted social enterprises and Veolia)
1- Japan’s population decline accelerates despite record immigration, Financial Times, April 2019.
2- op. cit.