THE ROLE OF BUSINESS ADMINISTRATION IN THE TRANSITION TO DECARBONIZED SOCIETIES: EXPLORING VALUE CREATION PROCESSES THROUGH CO-CREATION

Abstract

 Global warming is becoming an increasingly serious problem, and around the world, the movement toward decarbonized societies is accelerating. This paper first summarizes the most recent developments in the international community and Japan toward building decarbonized societies. The paper covers the Paris Agreement, the international framework for combating global warming adopted in Paris, France in 2015, the IPCC 6th Report, COP26 (Glasgow Climate Accord), and the “Green Growth Strategy Through Achieving Carbon Neutrality in 2050”. These studies confirm that the world is working toward the goal of limiting the temperature increase to less than 1.5℃ above pre-industrial levels, and that Japan has positioned the creation of decarbonized societies as a growth strategy and is mobilizing all its policies to innovate in these areas.

 As a research topic in management studies, the paper then discusses perspectives and approaches available when considering the movement toward building decarbonized societies. The paper proposes a perspective on exploring value creation processes through co-creation among different actors. In other words, the current movement toward decarbonized societies represents a shift from the fossil fuel-based “carbon societies” that have existed since the Industrial Revolution, which can be viewed in the context of dynamic transformation of socioeconomic systems. To transform existing socioeconomic systems into new ones, their constituent entities - government, business, and citizens - need to collaborate and co-create. This paper argues that the role of business administration is to analyze processes of collaboration and co-creation, and to derive valuable insights into value creation for decarbonization.

 The paper also discusses the construction of smart cities as an important move toward decarbonization. Companies from various industries are participating in a smart city project promoted by Panasonic in an initiative to create new value through the co-creation among such companies. Based on the results of the fact-finding survey in this project, the paper presents a 7-stage hypothetical model of knowledge co-creation processes among firms in different industries. The 7-stages are “exploration”, “fluctuation”, “synchronization”, “concentration and distribution”, “fusion”, “trajectory” and “convergence”. Furthermore, through comparison with the “Environmental Future City” project promoted mainly by the government, the paper derives the finding that the level of exploration is important in the co-creation of knowledge between different entities. In other words, if exploration takes place at a deeper level, the subsequent knowledge co-creation process will be richer, and conversely, at a shallower level, the knowledge co-creation process will be poorer. The paper then argues that stimulating the demand for exploration among different entities and enabling exploration at a deeper level requires “loose” relationships between entities that are non-explicit, i.e. they have vague goal settings and vague division of roles, etc.