Solution components

The solution to poverty will consist of at least two parts, the portion to develop new businesses with high growth potential, and the section to define new rules for operation that will disallow poverty.

New rules for conducting businesses must be defined because the current practices will not eliminate poverty effectively in a stagnant economy with increasing social problems.

The mindset of corporate people is tuned to maximize gain at the expense of other firms, where gain refers to profit, security, assets, and other benefits. At the same time, customers fuel competition between product and service providers to obtain more for less cost. The culture of excessive competition between businesses and steep demand by individuals has become the norm. This culture has led to create a social and economic system that concentrates wealth to a small percent of the population while leaving many others with marginal increase and some others without sufficient means to satisfy their basic needs. The current system allows poverty conditions to exist.

New businesses are necessary and can be effective in boosting economic performance of the region. However, in the current system where gaining disproportionately is commonly allowed, most of the new revenue to the region will not be shared with people who are in need; instead, the new business operations may even increase the income gap between the wealthy and the poor. The practice to allocate economic benefit to the contributors is abused to the point where the people who have their basic needs covered multiple times obtain much more than the people who scarcely have enough to survive. The world with this culture has not learned to “demand moderately” and is losing the notion to “care and share”.

To change the distribution, new businesses can be operated with the new rule to be responsible for the allocation to the previously “difficult to reach” people. Current business entities collect profit and distribute mainly to their employees and stockholders; therefore, they share their profit only with the people who qualify. This condition excludes some of the major poverty groups in Japan, namely the retired elderly, single parents who have constraints in meeting employment requirements, and a specific group of single people who are often unemployed.

The new businesses can generate profit and operate under the new rules, such as to allocate more to a wider audience through measures such as direct job outsourcing or partnerships with NGO’s assisting these people. The major difference from existing business operations is in assuming the responsibility to distribute to the people with need, instead of letting other organizations deliver on their own responsibility.

In an ideal situation, the structure to distribute economic yield to a wider audience will be inseparably built into the operation that generates revenue. In other cases, new sections of existing businesses can partner with organizations reaching out to the people with basic needs and manage the relevant metrics jointly.

Raising the bottom level will have a broad range effect on the entire economy and a positive effect on satisfaction perceived by the communities. When the disposable income of the mass population groups increase along with the reduction of the poverty population, their spending activities will drive the general economy more than the smaller affluent groups.