Japan’s regions offer attractive opportunities for foreign investors. Efficient transport infrastructure, covering roads, railways, inland waterways, maritime ports and airports, provides easy access from Tokyo, the capital of Japan. Major local cities also offer direct flight and shipping services to fast-growing Asia. What is more, global businesses can benefit from these regions’ highly-skilled workforce, cost competitiveness, business-friendly environment, great nature and local people’s warm hospitality. Japan’s rural areas welcome investment from foreign companies.
On May 22, 2017, a special event was held in Tokyo as part of the program of the Worldwide Officers Meeting of the Boston Consulting Group where Japanese governmental officials gathered to talk about various opportunities that Japan’s regions can provide. The Minister of State for Regional Revitalization and Regulatory Reform, Kozo Yamamoto, delivered the keynote speech, followed by a panel discussion where the governors of Hiroshima and Okayama prefectures, and mayors of Obihiro and Sanjo cities spoke about the key attributes and unique characteristics of their regions. These local officials participated in the panel discussion, representing all 47 prefectures, and 791 cities in Japan.
This report is meant to give the reader a chance to consider visiting many attractive regions in Japan and finding unique opportunities outside of metropolitan areas.
Japan’s Regional Revitalization
Minister of State for Regional Revitalization and Regulatory Reform (August 2016-August 2017)
A Member of the House of Representatives. Born in 1948. Earned a B.A. in economics from the University of Tokyo, and an MBA from Cornell University. After working at the Ministry of Finance from 1971 onwards, he was elected to the House of Representatives in 1993.
※Names and positions contained in this report are as of May 22, 2017.
With the progress of “Abenomics,” the economic policies pursued by the administration of Prime Minister Shinzo Abe, the Japanese economy has steadily gained steam. One noteworthy effort taken by the government is so-called “Local Abenomics,” which the Abe administration implemented in 2014 to promote “regional revitalization.” Measures include reversing the population exodus to the greater Tokyo area by promoting local industries and tourism to generate more jobs, and by providing grants to local governments to pay for such efforts.
The Minister of State for Regional Revitalization Kozo Yamamoto, who is considered one of the architects of Abenomics, explained why Japan’s middle classes in rural areas consider themselves reasonably happy with their lives, how he has taken initiatives to accelerate the government’s regional revitalization efforts, and how he encourages regions’ voluntary efforts to boost their economies.
Japan, unlike many other developed economies, has enjoyed political stability since Shinzo Abe was re-elected as Prime Minister in 2012. The stable administration has been in place partly because the central government is taking measures to revitalize local economies, preempting complaints from the working and middle classes in non-urban areas, said Yamamoto.
Yamamoto asserted that he set a clear and simple goal for revitalizing local economies. “I simply defined ‘regional revitalization’ as efforts by a region to raise its average income,” the minister said. To achieve the goal of boosting income in each region, Yamamoto said, he has encouraged local governments to use big data being collected by and provided by the central government, to analyze their economic and social status, and to draw up appropriate reflationary measures.
The Regional Economy and Society Analyzing System, or RESAS, which Yamamoto endorses, can be used to improve the decision-making of regional governments. “RESAS tells about information such as the demographic characteristics of the region, tourist movement, and allows users to have both an overview and specific companies that contribute most to the local economy. It should be used to make economy-boosting policies. Such evidence-based policymaking is important to generate earnings,” the minister said.
Since Yamamoto took office on August 3, 2016, the Minister of State for Regional Revitalization visited 206 facilities in 89 municipalities by May 22, 2017 to make sure that RESAS is in proper use. Sympathizing greatly with “the spirit of self-help” advocated by Scottish writer and government reformer Samuel Smiles, Yamamoto believes that such spirit is crucial for local governments to push their economies forward, and that the RESAS system that the central government offers to local governments for free is the ideal tool for promoting their self-help efforts. “Once towns, cities and prefectures craft their own economy-boosting policies by taking advantage of the RESAS-based analysis, we offer steadfast support through providing information, human resources and financing,” Yamamoto concluded.
Column: What is RESAS?
The Regional Economy and Society Analyzing System, or RESAS, which the Cabinet Office implemented in April 2015, was developed to provide useful information on the economy, society and businesses to local governments to assist them in developing effective economic and industrial policies. The system, which is provided by the Ministry of Economy, Trade, and Industry (METI) and the Cabinet Office, has put together on the Internet big data owned by ministries and agencies and contributed by private companies. By using the system, users can see concentrations of businesses in a particular area, as well as changes over time, for example. RESAS can be used as a tool to collect useful data, map out concrete measures, and verify implementation and enforcement of such policies.
Ukiha City in Fukuoka Prefecture, for example, succeeded in using RESAS to foster a spirit of entrepreneurship. The municipal government identified the average age of local retail operators by analyzing RESAS data. As figures showed that many owners of these stores were relatively young, the city hosted a series of seminars targeting young entrepreneurs, giving them useful information to start new businesses. RESAS data also helped businesses in the city by presenting correct information regarding from which cities tourists were coming to Ukiha, so that local companies in tourism industry could effectively promote their businesses to the right market. As of June 2, 2017, 1,728 out of 1,788 municipalities across Japan are using RESAS in discussing policy planning or demonstrating the effectiveness of various measures. Other organizations, including financial institutions, commerce and industry associations, chambers of commerce and industry, and educational institutes, are also using the system.
The prefectures and cities that were highlighted here are just a few examples of Japan’s attractive and diverse regions. Readers will find a wide range of business opportunities in rural areas, if they visit and explore various regions on their own.
- Japan External Trade Organization (JETRO)
- Cabinet Office
- Ministry of Economy, Trade and Industry
- Ministry of Foreign Affairs of Japan
Names and positions contained in this report are as of May 22, 2017.