5 social business trends to watch in 2023
Many great businesses were born during the most turbulent time of economic activities and uncertainty. Despite the gloomy outlook of a global recession, entrepreneurs could see opportunities for the undeserving segments and turn the problems many people faced into highly impactful and lucrative opportunities. Here is the list of 5 major trends that would shape the ecosystem of social businesses in 2023 and the years to come.
Accessibility: inclusive technology in products and services, such as digitalization and better mobilization options
According to Interaction Design Foundation, accessibility could be understood as a concept of how a product or a service can be used by everyone. WHO estimated in 2022 that 1.3 billion people around the world experienced some form of disability, and inaccessible products and services pose a primary concern in their daily lives, hence there will be an increasing need for the market to serve these needs through social businesses. A rising movement that addresses this problem is web accessibility, or eAccessibility, which ensures there are no barriers that prevent interaction with, or access to the internet and different websites by people with physical disabilities, situational disabilities, and socio-economic restrictions. Examples of businesses that had worked on this issue include Evinced Inc., which is a startup that aims to help companies make their websites and software accessible to people with special needs. According to WSJ, the company has raised $17 million in Series A funding, led by Microsoft Corp. venture fund M12, Benhamou Global Ventures, and Capital One Ventures, the venture fund of Capital One Financial Corp in December 2021. Accessibility needs in other fields such as transportation, health care, and education would be a crucial drive shaping new business creation in 2023 and years to come.
2. Well-being & Healthy care: An increase in personalization
Similar to the need for accessibility, health, and well-being promotion services would see a rise in demand during 2023. Wellness tourism, for example, focuses on travel activities to maintain, manage and improve health and well-being. Wellness travelers are diverse in terms of background, motivations, interests, and values, however, the common ground is that they seek not only authenticity in experience, but also meaningful connections with local culture, nature, and healthy practices. Businesses that serve this segment would be in for a great social impact, as they will facilitate the customer’s personal well-being while helping the local community benefit from the expenditures. With 7800+ community members and 2600+ course participants, Marter.cz is an educational platform tailored for women and men on parental leave to receive community support during time off work, and provide companies with a pro-family employee policy as well as guided courses. The company encourages parents to take time away to reconnect with nature while helping them to be motivated and stay on track with qualifications and an overview of their work after the leave period. Another example is FiNC, a Japanese startup that utilizes data analysis and social aspects in their app aims to help people log, understand, manage, and improve their health and wellness. With the funding amount of $80 million, the company is on track to help millions of users make better decisions for their nutrition and health management.
3. Rural revitalization: new services in real estate, infrastructure renovation, and community development sectors that bring in new ways of living among nature and rural areas
In a country like Japan where the aging population is one of the biggest social issues, there are many initiatives that encourage organizations and businesses to revitalize the habitats of abandoned houses or villages, as well as help to boost the local economy with new innovation. In the city of Fukui, the Fukui Machidukuri Center acts as a social enterprise entity that facilitates different community gathering activities to promote local culture and business collaboration. With the mission of creating a platform for rural revitalization, Otetsutabi is an example of a collaborative project that helps connect travelers with local skilled craftsmanship, natural sceneries, and authentic experiences in the rural area. Sagri is a Japanese satellite data provision service that focuses on improving the management of agricultural activities in rural area. Being the winner of several awards, it announced a total of 155 million yen in funding from real-tech funds and other investors. Another example of a service that aids rural revitalization is Andpad, which is a construction management program that is available to users all across Japan, aiming at facilitating safe and smooth construction programs with the lowest cost. The company has a funding amount of 10 billion yen. Additionally, many new projects and business ideas for remote working in rural areas are on the rise as well.
4. Urban innovation: Improved food supply chain system, waste management, and redesigning the way we live in cities
While rural area needs a lot of revitalization, according to UN statistic, the world's urban population has grown rapidly from 751 million in 1950 to 4.46 billion in 2021 and will grow to 6.68 billion by 2050, adding about 2.22 billion people in urban areas. As more and more people are living in urban settings, megacities that homed millions of residents like Tokyo would become more and more common around the world, and so is the need to accommodate the rising needs of this urban demographic group. For innovation, fundamental necessities like food and waste management should be taken into consideration. In a country like India, Crofarm was founded to provide a supply chain that benefits farmers while also delivering fresh ingredients to businesses efficiently. Similarly, Plenty is a vertical farming firm that provides clients with fresh, pesticide-free products based in the big urban area of San Francisco. The company received generous financial support of more than $500 million worth of funding and is on the way to redefining many communities’ ways of food production, in and out of the United States. Another aspect of urban innovation would be waste management, and Rubicon is one of the leading businesses that offer smart software solutions for garbage collection and recycling, taking away the hefty burden of pollution on the street. This service links well with our next trend of sustainability, where better waste and resource recycling solutions can help us achieve a circular economy and end waste.
5. Sustainability-focus business: Renewable energy, carbon capture technology, and sustainability consultancy become a major focus
Sustainability would continue to be one of the most important social focuses during 2023 when more communities around the world are taking the issues of climate change, resource depletion, and global warming more seriously than ever. Key players in sustainability sectors would not only comprise governments or big corporations, but also small and medium enterprises as well as social startups. Founded in 2020 in the United States, Persefoni is an AI platform that enables businesses to plan, monitor, evaluate, minimize, and report their carbon footprint. The company so far has gone through 2 funding rounds with funding amounts of $13 million. Another startup working on sustainable products is Evocative Design, which is a company that provides biomaterials as a substitute for plastic packaging through natural growth processes, with a total funding amount of $90 million. Renewable energy will also see a greater increase in demand and supply, as more and more people are opting for cleaner sources such as solar and wind power.
Conclusion
In order to make the most as social entrepreneurs, it is important for founders to keep in mind the needs of the people they are serving, and provide the solutions that best fit their needs. At Social Impact Lab Japan, we incubate, accelerate, and invest in social startups, because we believe that innovation starts with addressing the right social issues. If you have an idea that you would want to pitch, join us at Venture Cafe’s ROCKET PITCH NIGHT FESTIVAL on March, 2nd, 2023, from 3:00 pm at Toranomon Hills, Tokyo. The landscape of business would always be changing, but we hope to support startup founders and decision-makers to adapt to these changes to generate positive impacts on the world.
