The study focuses on the process of business development with the use of food tech and open innovation by Small and Medium-sized Enterprises (SMEs) in Japan to create a sustainable ecosystem in the regional economy. Production of alternative food materials is introduced in the new business of SMEs with the hope to reduce carbon footprint. SMEs need to create an SME ecosystem that integrates consumers as vital partners in the process of introducing new alternative food items to the market as agents of change. Innovative ways of inventing new food products involve the processes of sourcing ingredients, creating new recipes for alternative food products, and incorporating local food culture and methods of food preparation. Therefore, it is crucial for SMEs to involve local producers as well as consumers as stakeholders in innovation. Some case examples of SMEs producing plant-based alternative meats in Japan are reviewed in this study to highlight key factors impacting the outcome of innovation in the products and processes of SMEs seeking sustainable solutions. The significance of the study lies in acknowledging catalytic roles of SMEs in regional settings and interactive roles of consumers as product buyers as well as active players who consciously opt for certain products and modes of consumption driven by their inclination to support sustainability. Based on the findings of the study, some policy suggestions are also made for enhancing sustainability and revitalizing the local economy through SMEs.
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