The philanthropy and impact sectors in Korea and Japan have evolved in different directions. As the only OECD member countries in Asia and advanced industrial nations, both nations are facing common challenges such as population aging, low birth rates, regional decline, social isolation, and digital transformation at the forefront; However, their strategic approaches to solving these issues, the operation of their ecosystems, the structural relationships between corporations, governments, and non-profits, and the operational DNA of their individual organizations are fundamentally different.
After spending about five weeks in Japan as the CAPS Northeast Asia Director, meeting with various foundations, corporations, government agencies, impact startups, and non-profit organizations, I felt even more strongly that we have now entered a time when both countries must no longer unilaterally refer to Western models but begin to examine each other more persistently. Because we are close yet distant, and appear similar yet fundamentally different, Korea and Japan are actually closer to being “practical incubators” that can be observed most closely from one another. This is because we can closely observe and experiment with not only failures and trials and errors but also success stories and excellent models within the context of institutions, culture, and the movements of corporations and non-profits, with relatively little distance.
What is most interesting is the fact that, apart from the cultural tendency of Korea and Japan to excessively underestimate themselves, they have already accumulated significantly unique strengths on a global scale. Furthermore, these strengths coincidentally align with the very points that each country is currently seeking to complement. The existence of two nations with different solutions and competitive advantages right next to each other may be a far rarer occurrence than one might think, and perhaps akin to strategic luck.
Korea to Japan: Social Entrepreneurship
In Korea, there is often a self-critical view that regards the social enterprise and social venture ecosystem as still incomplete or merely a government-led initiative. However, in reality, it has already grown into one of Asia’s leading social innovation hubs. In its 2019 study, ‘Business for Good: Maximizing the Value of Social Enterprises in Asia,’ CAPS assessed Korea as having the most developed social enterprise ecosystem among the six Asian countries surveyed at the time. Building upon the government’s policy foundation, which began with the Social Enterprise Promotion Act, various players—including large corporations, foundations, intermediary support organizations, and accelerators—have combined to form a unique structure in a short period. In particular, in impact clusters formed organically by the private sector, such as in Seongsu-dong, the existing vibrant tech startup culture rapidly intersects with ESG discourse, manifesting a concentrated manifestation of Korea’s distinctive broad entrepreneurship, high execution capability, and dynamism.
At the same time, it is also important to note that this ecosystem was not formed solely through government support. SK Group supported the establishment of performance-based compensation systems and social value measurement systems for social enterprises through its Social Performance Incentive (SPC). Major conglomerates such as Hyundai Motor Group, LG, and POSCO also actively participated in fostering the social enterprise ecosystem and collaborating, going beyond simple financial support. KAIST is also stepping up efforts to specialized talent by operating a Social Entrepreneurship MBA program. In the CAPS study conducted at the time, approximately 75% of the 102 Korean social enterprises surveyed were generating actual profits, which was the highest level among the six Asian countries surveyed. More than half (53%) were found to be aiming to enter overseas markets. This is an important indicator showing that the Korean social enterprise and social venture ecosystem has already secured global competitiveness beyond Asia, not only in terms of social value but also in terms of marketability and scalability.
In addition, another distinctive feature of Korea is the presence of symbolic “champions” who have long driven the social enterprise and pan-social impact sectors. Korea demonstrates top-down philanthropist leadership, possessing leaders such as SK Group Chairman Chey Tae-won (who is also a member of the CAPS Board) who has publicly spearheaded social value agendas at the conglomerate level for a long time, and Hyundai Marine & Fire Insurance CSO Vice President Chung Kyung-sun, who has returned to the corporate sphere to expand his influence after experiencing the social venture field firsthand. Indeed, various stakeholders in Japan often express significant interest and envy regarding this visibility, leadership, and the harmonious dynamism between the public and private sectors in Korea’s social innovation field.
Starting with the era of former Prime Minister Shinzo Abe and continuing through the policy stances of successive prime ministers over the past few years, Japan has increasingly treated the nurturing of startups and the creation of new industries as important national agendas. The Kishida administration’s “New Capitalism,” which was also inherited by Prime Minister Sanae Takaichi, is an extension of this trend. In particular, the rapid rise of the discourse on impact startups in Japan recently is rooted in broader considerations regarding how to revitalize the innovation and entrepreneurship of the Japanese economy as a whole, going beyond the mere creation of social value.
In fact, one of the keywords I repeatedly heard while speaking with officials from various Japanese government ministries and quasi-governmental agencies was long-term budget cuts and pressure on fiscal soundness. Amidst an aging population and deepening national fiscal burdens, the government has begun to consider fundamental structural reforms aimed at enabling the private sector and society to more actively create new solutions and markets, rather than attempting to solve all social problems directly. Another point is that even the Japanese government, which typically tends to prioritize Western examples, showed a particularly high level of interest in domestic Asian cases regarding this topic. In particular, several officials repeatedly mentioned Korea’s social innovation and startup ecosystem as a whole, as well as the Singapore model—which positions itself as a pan-Asian hub—viewing them as important reference cases.
In this context, the Korean case inevitably serves as a highly interesting benchmark for Japan. While government policy support has certainly played a significant role, the experience of growing into a more scalable and market-friendly form through the combination of private sector dynamism and market-based approaches aligns with the direction Japan is currently contemplating. In particular, while many Japanese companies remain accustomed to traditional non-profit, local government, and community-centered approaches, they are still in the trial-and-error stage regarding what to support impact startups, how to collaborate, and how to grow the ecosystem together. Therefore, the Korean case can be interpreted not merely as a social enterprise policy, but as an experimental example demonstrating how the private sector can elevate social innovation into a more mainstream economic and industrial agenda.
Japan to Korea: Local Communities
While Korea demonstrates the potential of impact entrepreneurship and market-based social innovation to Japan, Japan presents Korea with another solution: a public interest ecosystem built at the local community level. As evidenced by CAPS’s research on aging, Japan has been conducting various experiments to reconstruct the very way of life within local communities, rather than simply expanding welfare, amidst the structural crises of super-aging and regional decline. Notably, The Nippon Foundation and the Sasakawa Health Foundation have been spreading community nursing models by redefining nursing staff not merely as care providers, but as a type of local small business entrepreneur. By supporting nurses to directly establish and operate small-scale care stations within their communities, they have established care as a community-based business model, resulting in the formation of over 160 hubs since 2014. This is an example of reconstructing care from a simple welfare service into an integral part of a sustainable local commercial district.
Another example is the approach of integrating care into the daily lives of economic and social members. For instance, the door-to-door salespeople of Yakult go beyond simply delivering products to check on residents’ well-being, monitor their health, and maintain social connections—all within the same context. In this way, Japan addresses problems in detail by expanding and reconfiguring existing community networks rather than designing new systems or solutions. Technology is also utilized as a means to complement this philosophy. Sompo Care, under Sompo Holdings, reduces the burden of care in nursing facilities by utilizing robotic pets and various assistive devices, while clearly stating the principle that “technology alone cannot solve the problem, and human intervention is ultimately essential.” In other words, technology functions not to replace relationships, but as an auxiliary device to maintain them.
This approach distinguishes the nature of the “regional decline” currently facing Japan from that of Korea. While Japan is also experiencing intensifying population decline centered on rural areas, numerous regional hub cities such as Sapporo, Osaka, Kyoto, Nagoya, Fukuoka, and Kobe maintain independent economic zones and communities, sustaining a certain level of self-reliance. This is not simply a matter of decentralizing functions from the metropolitan area; Rather, companies and industries historically rooted in these regions continue to thrive while remaining closely integrated with local communities. In fact, OECD regional economic comparison data indicates that Japan maintains a more balanced regional economy, with the economic gap between major cities and non-metropolitan areas remaining relatively smaller than the OECD average. This trend is clearly audible and palpable in the field of social impact. When conversing with professionals in Japan’s impact ecosystem, one repeatedly hears recommendations to visit regional cities like Fukuoka rather than just Tokyo. This serves as a prime example demonstrating that the structure is not one in which all capabilities are concentrated in a specific metropolitan area, but rather one in which each region continuously creates its own ecosystems and conducts its own experiments.
In particular, within a local ecosystem, corporate social responsibility activities function as part of relationships inherent within the local community rather than as externally injected projects. Companies that have long operated in the region are closely connected with local non-profit organizations, grassroots groups, local governments, and residents, engaging in continuous collaboration across various fields such as addressing aging, regional revitalization, education, inclusion of people with disabilities, and culture and the arts. Although they do not explicitly put terms commonly used in the West, such as strategic philanthropy, ESG, or CSV at the forefront, this can be interpreted as a prime example of a ‘multi-sector partnership’ where cooperation among diverse stakeholders operates naturally, as well as a high level of community engagement.
This approach offers significant implications for Korea, which has recently begun contemplating regional relocation and balanced development. While various policy initiatives—such as the relocation of subsidiaries and factories to provincial areas and the decentralization of public institutions—are ongoing, merely physically moving functions and organizations makes it difficult to establish organic connections with local communities. The same applies to the trend of major shipping and shipbuilding companies moving to regional areas, alongside the relocation of the Ministry of Oceans and Fisheries to Busan. It is insufficient to simply artificially transplant the social contribution and corporate foundation program systems established in Seoul, or CSV models linked to the corporate value chain, as they are. Rather, as seen in the Japanese example, a more fundamental approach is required regarding what relationships companies will build within the local community and how they will engage with various local stakeholders over the long term.
Korea and Japan Together Between Similarities and Differences: Asia and Global Impact Partnership
If Korea can demonstrate to Japan the scalability and speed of market-based social innovation, Japan can serve as another reference case for Korea showing how social contribution can be internalized within relationships with local communities. More importantly, this is not merely an issue between the two countries. The public interest and impact ecosystems of both Korea and Japan operate in environments so complex that even internal stakeholders find it difficult to understand and approach their structures and grammar. Consequently, other Asian nations, as well as stakeholders operating the pan-Asian ecosystem centered around Hong Kong and Singapore, often perceive us as difficult and unfamiliar. However, paradoxically, it is precisely within these differences and complexities that new synergies for Asia as a whole can become possible when Korea and Japan understand and connect with each other more deeply.
In fact, both countries already share an increasing number of common interests across Asia, including Southeast Asia, and are simultaneously placed in a position where they must jointly respond to the shrinking of development aid and philanthropy capital markets—which were previously led by Europe and the United States—as well as various changes in norms. Agendas such as ESG, climate, aging, and digital transformation are no longer issues confined to specific countries. Amid this context, platforms such as the Asia Philanthropy Congress, initiated by Japan’s The Nippon Foundation; the international forums, long-running by the Korea Social Enterprise Agency; and Social Value Connect, led by the Korea Chamber of Commerce and Industry, are fostering pan-Asian exchanges in their own ways.
Nevertheless, Korea and Japan often occupy a subtly marginal position within the ecosystem known as the “Asian Hub.” China and India are naturally drawn to the center despite language and cultural barriers, driven by the absolute variable of market size, while Singapore and Hong Kong serve as geographical, knowledge, and capital hubs that mediate this process. Conversely, although Korea and Japan individually possess advanced ecosystems equipped with high levels of institutional sophistication and execution capabilities, they are sometimes perceived as closed markets that are difficult for external stakeholders to access due to their unique structures and entry barriers.
In that case, we can propose a hypothesis. What if Korea and Japan viewed each other as a single, interconnected impact market, at least on the international stage, and more intentionally sought cooperation and linkage? If the two countries, possessing distinct strengths, were bound together into an expanded platform and presented jointly on the Asian and global stages, wouldn’t it be possible to create a structure that allows external stakeholders to access and participate more easily? At the same time, this could serve as an opportunity for both nations to more clearly recognize and redefine their respective strengths.
Of course, there is no clear answer to this question yet. However, what is evident is that it is now time for these two countries, which have been both close and distant, to look at each other more consciously and connect. At the point where two ecosystems that have evolved in different directions meet, new experiments and cooperation that go beyond simple comparison can begin. And perhaps that process itself could serve as another starting point for jointly exploring the future direction of the Asian public-interest and impact ecosystem.
This article was first published in Korean in The Butter and is part of Heesu Jang’s monthly opinion series Asia Philanthropy Inside.