Base of the Pyramid and Business Process Outsourcing Strategies

Japanese multinational companies have long been dependent on specific markets such as those in developed countries in Europe, North America and the neighboring northeastern Asian countries, as well as the ASEAN countries. While other multinational corporations, including firms in China and Korea, are aggressively expanding business by introducing reasonably-priced products with simple functions for developing countries, most Japanese firms are not yet ready to effectively develop products targeted at new markets there. The decision to enter emerging markets is not so easy considering the higher country risks, lower return on investment in the short term, lack of expertise in managing operations in developing countries, availability of human resources, and other factors. However, the trend of aging society, decreasing population and shrinking labor force in Japan are all urgent issues which Japanese firms need to tackle. It is predicted that the present population of Japan—125.5 million in 2022—will become less than 90 million in 2060, according to the Statistics Bureau in Japan’s Ministry of Internal Affairs and Communications. Companies and businesses depending on the domestic market can no longer expect future growth in the shrinking market. To find out why Japanese companies have hesitated to expand their business and how they can enter developing countries are my research questions for this project. This paper presents the results of research conducted to find out how latecomers can successfully reach new markets in emerging countries. In various studies in Africa and Asia, it has been found that unique methods are required to enter into new markets as latecomers. Among these unique methods, collaboration with non-profit organizations such as Non-Governmental Organizations (NGOs) and international organizations such as UN agencies can be a powerful tool in overcoming various entry barriers and penetrating local markets.

The focus of the paper is to elucidate the business strategy as a poverty reduction strategy from the joint social business innovation by foreign-based corporations and NGOs. This paper focuses on the poverty reduction strategy by “Grameen Euglena”, which is jointly funded by Grameen Krishi Foundation in Bangladesh, and Euglena, a Japan-based company. This paper argues that MNCs or foreign companies can create a foundation for employment in local communities, discouraging rural inhabitants from migrating to the informal sector in urban areas, and helping to create a foundation for local autonomous and sustainable business ecosystems, by establishing a “social business” joint venture with local NGOs. The paper also considers the social business model between sectors by this joint company to solve social issues in rural areas, based on the research field surveys on “Grameen Euglena” in Bangladesh in 2016 and 2020.

Poverty, Rurality and Disability are three major vulnerabilities to deliver quality healthcare services and ensure universal healthcare coverage (UHC). Disruptive technologies and a social business model can deliver healthcare services to non-UHC communities in a faster, affordable and sustainable manner. This chapter of the book investigates the status of UHC in Bangladesh, categorizing out of coverage communities. Kyushu University and Grameen Communications have developed an affordable, user-friendly, and sustainable digital healthcare delivery system, which we call Portable Health Clinic (PHC). A community-based micro healthcare entrepreneur can take the PHC to visit an elderly person, pregnant woman, or person with disability at their doorstep, and provide real-time primary health services connected to licensed healthcare professionals. Annual health checkups are a long-standing institutional practice in Japan, but not as prevalent in emerging countries including Bangladesh. Small organizations cannot afford a health center at their premises, thereby remaining out of coverage of healthcare services. Health insurance is not prevalent, which exposes not only well-being but savings or assets to risk in catastrophic situations. Regular health checkups are known to provide an early alert of any diseases, which can reduce health risks, save medical costs and increase productivity. We categorize five different rural and urban communities in which PHC pilot studies have been carried out over the last 12 years. We have designed five different delivery models and evaluated their financial sustainability, as well as social impact. This chapter describes this experience and identifies major challenges with the purpose of ensuring that UHC approaches can assimilate advanced technologies, mainstream them in national healthcare policy in the country, and train healthcare workers.

This study examined the issue from the perspective of SDGs Issues of “Poverty” and “Women’s Independence”. In the world, more than 700 million people, or 10% of the population, live in extreme poverty, and nearly 60% of women work in the informal economy, which increases the risk of falling into poverty. Therefore, to grasp their actual situation and solve the problems, based on previous studies and the author’s field research, this chapter discusses the consumption activities of the BOP, which represents the base of the economic pyramid that constitutes the income bracket, as well as the sari-sari stores, a generic term for micro-retailers that play a major role in the Philippines. In addition, I took up Nestlé Philippines, San Miguel Brewery, and Yakult Philippines, which are manufacturers of processed beverages and foods, as examples of how manufacturers utilize the sari-sari stores in their business, and examined their channels and marketing strategies through the sari-sari stores. As a result, in order for companies to make profits targeting the poor, they need to devise ways to distribute their products to sari-sari stores, and sari-sari stores enable women to become economically independent, create employment for shopkeepers and vendors, and supply daily necessities.

This study investigates how multinational enterprises (MNEs) in the complex global supply chain of the garment industry maintain sustainability. For this investigation, UNIQLO (Fast Retailing Ltd.: FR) was used as a case study. The working conditions in the garment industry have been dire. There is a need, therefore, for MNEs to accept their social responsibility and improve their global business model by incorporating the bottom of pyramid (BOP) concepts and adopting the social business model. This study explores the historical transitions of UNIQLO’s economic resilience, and the case of Grameen UNIQLO. The results reveal that despite external organizations (particularly MNEs and NGOs) supposedly working together, this was initially not the case. Even MNEs of developed countries would find it difficult to “leapfrog” into a state of total sustainability. In Bangladeshi production, there is a dual structure where employment conditions differ among the same Bangladeshi workers, depending on whether it is a Grameen UNIQLO or a production consignment factory. This study aims to contribute to the literature on sustainability in this global supply chain by MNEs.

For the past two decades, the IT-BPO industry of the Philippines, which provides a variety of services to the Global North, has made substantial contributions to the country’s economic growth by generating not only revenues but also local employment. The Philippines, indeed, replaced India as the leading destination of global business processing outsourcing. Most notably, it hosts the largest number of call centers in the world. The growth of the IT-BPO industry has brought about significant changes in the female labor force of the Philippines. While Philippine society is said to be immune to any pressure to change the status quo, it has apparently been undergoing transformation in the face of an altered economic landscape. This socio-economic development deserves close attention, because it has far-reaching effects on the lives of Filipinas as well as their families. This paper aims to explore the role of the IT-BPO industry in the formation of a middle class in the Philippines, with a focus on enhanced economic opportunities for Filipina women, who now have alternative ways to earn money in their country rather than being “exported” to foreign countries as migrant workers. To this end, 12 cases of employees of software development and medical transcription companies, including affiliates of Japanese firms, will be examined in detail.

The Philippines, as an emerging and developing country, has been struggling with the expansion of the so-called Bottom of the Pyramid (BOP) population that mainly stays in rural areas. One of the problems is that, the employment ratio in the manufacturing sector to the total number of workers in the Philippines remains stagnant in a single digit, as described below. On the other hand, the IT-Business process outsourcing (IT-BPO) industry, which belongs to the services sector, has been rapidly increasing its share of GDP and the employed population. In this paper, the author examines the fact that the number of poor people has decreased relatively and absolutely since 2012 from the perspective of the IT-BPO industry as the formal sector. It also still holds the problems of surplus labor in the informal sector mainly in the rural areas. These issues are discussed in line with the original argument of “Lewis turning point” (Lewis, 1954).

The Philippine IT-business process management industry is in transition. Today, as the global outsourcing industry finds itself at the center of a more digitally integrated world in response to the disruption caused by COVID-19, it is also pushing the Philippines to shift to high-skilled, knowledge-based services in order to stay ahead of the competition. The chapter focuses on the rising contribution of manufacturing services to the country’s services export growth. The present study examines this trend from policymakers’ and other stakeholders’ perspectives and asks: What will it take for the domestic industry to climb up the value chain? More strategically, will this emerging trend help pave the way for the country to build its own manufacturing base and thus effect structural transformation? The study has two preliminary findings. First, increase in IT-BPM investments in the post-pandemic transition coincide with a growing interest in manufacturing services, including engineering design and data analytics. Second, the country seeks to leverage its leading global industry position and large high-skilled pool in order to stay ahead of other rising destinations. Nevertheless, for the Philippines to transition to complex and technology-intensive services it will need to gear up human resources and digital infrastructure, and ensure a robust university-industry interface—two prerequisites for the country’s own push toward industrial development.

The purpose of this chapter is to discuss how the COVID-19 pandemic affects the lives and household responsibilities of women in the IT-BPO industry in the Philippines. The growth of the industry has created possibilities for university-educated women in adversity to upgrade their lives, enhance their autonomy, and achieve upward mobility. Through online interviews with female workers/former workers in IT-BPOs in Metropolitan Manila, the author explores their gendered contribution and responsibility in households both prepandemic and during the pandemic, while paying attention to differences in both according to life stage. This study suggests the possibility that young female IT-BPO workers from low-income households, who tend to be economically responsible for their families, are more vulnerable to the pandemic.

In the Japanese IT industry, there is a marked shortage of IT human resources due to the expansion of IT utilization and e-business, the aging of system engineers, deteriorating working conditions, difficulties in technology succession, and the diversification and sophistication of technology acquisition. The supply of IT human resources is continually unable to keep up with the ever-increasing demand, it is becoming difficult to secure IT human resources year by year, and the shortage is expected to continue in the future. In Japanese information system development, overseas IT human resources, such as those obtained through offshore development, are actively utilized to make up for the IT human resource shortage. Recently, a new system development business model has been developed, in which foreign engineers who wish to work for Japanese IT companies come to Japan to develop information systems, through international cooperation between Japan and developing countries. In this study, offshore development involving international cooperation is defined as a development method involving on-site service in offshore development outsourced to overseas, or offshore development utilizing foreigners. After a general examination of the concept, we consider the current state and issues regarding offshore development involving inter-national cooperation between Japan, South Korea, and Nepal.