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Expanding business in emerging countries

SuRaLa Net’s e-learning supports children in developing countries

Tohru Nakanishi, an assistant director in the International Economic Affairs Division of the Ministry of Economy, Trade and Industry's Trade Policy Bureau (left), speaks with SuRaLa Net CEO Takahiko Yunokawa at METI on Dec. 28.
Tohru Nakanishi, an assistant director in the International Economic Affairs Division of the Ministry of Economy, Trade and Industry’s Trade Policy Bureau (left), speaks with SuRaLa Net CEO Takahiko Yunokawa at METI on Dec. 28.

From its foundation, the key theme for SuRaLa Net has been to resolve social issues, which makes the company compatible with the SDGs. In relation to this, Yunokawa said: “You can’t expect a business to grow over the short term in the education industry. We have no choice but to work diligently to make the company grow gradually. We also thought that the company’s growth would be more likely achieved if we focused on resolving issues over the medium-to-long term, rather than exclusively pursuing sales.

“Using the power of digital technology to support learning and eliminating education gaps has been both our philosophy and strategy. From our founding in 2005, we have worked frantically to do what we could to support the learning of children facing education gaps related to household income, developmental disorders and learning disorders. Then in 2015, the SDGs were advocated. Honestly, what happened was, our efforts ended up overlapping with parts of the SDGs before we knew it,” he said.

“Of course, increased awareness about the SDGs is a plus for us. In the old days, investors would be skeptical about a company operating a business for solving social issues. Now that many people are aware of the SDGs, we can proudly explain that we are undertaking initiatives that contribute to achieving the SDGs in accordance with our corporate philosophy. There is now an environment that makes it easier to see that we are generating profit,” Yunokawa said.

The era in which companies could do well just by pursuing short-term profit is over. We are now in an era in which people want companies to increase corporate value over the long term while paying attention to stakeholders. It is also an era in which achieving the SDGs is prioritized. Still, a large number of companies are experiencing difficulty in undertaking initiatives to help achieve the SDGs while at the same time running their businesses.

“Admittedly, in the past, it was difficult for a company seeking to resolve social issues to remain in business,” Yunokawa said. “In fact, there were few cases in which major companies made serious efforts to operate such a business. Many areas were left to be addressed only by NPOs (nonprofit organizations). But today, there is actually a higher possibility that solving social issues can create business opportunities for startups.”

“For example, we offer cloud-style services. Cost increases from adding a new student are nearly zero. As it requires large initial investment, it takes time to make the company profitable, but once you go above the break-even point, you can expect to achieve high profitability. In an emerging country, where the market is large, you can establish a pricing system suited to the local market and expect the business to scale quickly in a short period. In addition, collaboration with local entities and other companies is an important factor.

“For example, in Sri Lanka, we were able to establish a price table that suits the local market by working with Women’s Bank, a local microfinance organization. A key challenge in developing a remote education service is an underdeveloped communications infrastructure. But after the Ministry of Economy, Trade and Industry let us know about a program to support feasibility studies on infrastructure projects, we undertook an initiative to launch business in Myanmar, working with Sojitz Corp., which is experienced in infrastructure projects, and taking advantage of the program. We are on the doorstep of an era when a company can resolve social issues in its main business by using technology and collaborating and cooperating with a variety of stakeholders in an effective way,” he said.

Takahiko Yunokawa
Born in Yamaguchi Prefecture in 1960. Graduated from Osaka University’s School of Engineering Science. Joined Japan LCA Corp. in 1985 and Venture Link in 2003. Launched SuRaLa under an in-house project in 2005. Took over SuRaLa through management buyout in 2010 and listed it on the Tokyo Stock Exchange’s Mothers market in 2017.


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