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To
accentuate regional development and to provide a “test laboratory” in
which new reforms can be evaluated on the local level before they are
considered for national implementation, a system of special zones for
structural reform was proposed in April 2002. By granting prefectures
and municipalities exemptions from regulations governing education, urban
renewal, distribution, agriculture, medical care, industry-academic cooperation
and other areas, they will be able to better enhance their core strengths
and competencies, in order to develop new companies, industries, efficiencies
and a stronger commercial infrastructure.
In July of 2002 a Headquarters for the Promotion of Special Zones for
Structural Reform was established, headed by Prime
Minister Junichiro Koizumi. The
new system starts with a proposal application, followed by an examination
and selection process. After a proposal is approved and a special zone
designated, a simplified regulatory regime becomes applicable within
the zone parameters.
Four rounds of proposal applications have since been implemented and
over 1500 proposals submitted. In April of this year the first decisions
were
made and almost 250 Special Zones have been approved for implementation.
This includes submissions from local governments and other public sector
entities as well as the private sector. For example, an international
distribution zone has been proposed for one major port area . In this
zone, customs clearance operations will run 24 hours a day – 365
days a year to make services and costs internationally competitive, and
private companies are to operate a public container terminal and a bonded
area. In another zone, non-Japanese workers with needed skills and technical
capabilities will be allowed to extend the maximum length of their visas
from three to five years. The entry of foreigners from specified countries
is to be eased in still another zone by simplifying the procedures for
securing short-term visas. Approvals have also been granted to establish
schools founded by private companies, and in one case a public road will
come into use for testing robots that walk.
The range of proposals that have been received are extremely diverse.
For example, Ageo, a city of 220,000 that serves as a bedroom community
for people who work in Tokyo wants to set up a community FM broadcasting
station. Since a city of its size cannot easily attract enough sponsors
to make such a station viable, it plans to join with adjacent cities
and towns, for which it needs special permission. One feature of the
plan is to schedule broadcasts in foreign languages, since Ageo has many
residents from Brazil, China, and Korea.
Another proposal was put forward by Neoteny
Co., Ltd., a Japanese venture
capital and consulting firm that helps entrepreneurs in the information-technology
business. It seeks to create a wireless LAN zone in a mountain community
with low population density. This would make it feasible to provide broadband
access in a remote area, where homes are too far from the nearest phone
office, and establishing a cable network would be cost prohibitive. This
problem be surmounted by installing a wireless local area network with
a high power output, Current regulations, however, require the need for
a license when the output of a wireless LAN exceeds a certain level so
a regulatory exemption is needed to move forward.
Every proposal will not be approved and indeed some have encountered
resistance from government bureaucracies as well as private parties whose
interests are protected by existing regulations. One example is a proposal
for a zone in which an ordinary stock company would manage a hospital.
This is not currently allowed. The
Ministry of Health, Labor, and Welfare takes a negative view of companies operating hospitals, as does the Japan
Medical Association, the leading nationwide organization of doctors.
Agriculture is another sensitive sector. Requests have been made to allow
companies to operate in this sector not only in respect to the use of
farmland, which is permitted, but as owners of farmland, which is not.
Here, National Diet members from rural constituencies have stepped forward
to oppose this idea.
The bottom line, however, is that by promoting this debate and many test
cases across Japan, new ideas and approaches are being introduced and
considered. Over time this will have enormous impact on the Japanese
economy. Prime Minister Koizumi is pushing hard to implement these special
zones. As head of the headquarters for promoting these zones, he is doing
what he can to roll back resistance.
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As
the move toward greater decentralization takes hold, local governments
across Japan are moving to define and build on their core strengths.
They are seeking to develop the competitive advantages that will allow
them to succeed and prosper in the New Japan that is emerging. This
has resulted in a growing realization that to attract the business
activity and investment needed to sustain their economic viability,
they are going to have to compete with other regions – not only
across Japan, but throughout the world -- to provide a high quality
of life and the most hospitable and productive business environment
possible.
Attracting foreign investment and businesses to locate in areas outside
of Japan’s primary population centers will not be easy. The fact
remains most foreign investors and companies in Japan choose to operate
in Tokyo or Osaka, its largest industrial center. It is fair to say,
however, that those who restrict their activity to these major cities
are missing out on many attractive and potentially profitable opportunities
as well as ways to reduce their cost structures.
Japan has 47 prefectures -- from the northern-most region of Hokkaido
to the southern island of Okinawa. Each possesses its own identity,
character and strengths. Specific examples include:
Fukui: Fukui prefecture has been designated by the
Japanese government as an area that is eligible for industrial relocation
promotion subsidies.
One of Japan’s smaller prefectures, Fukui is rich in natural
beauty. It possesses abundant hydo-electric resources as well as beautiful
mountains and the unique coast lines of Wakasa Bay. Fukui is a winter
sports center, one city Katsuyama, maintains a sister city relationship
with Aspen in the United States. Fukui covers 4,189 km2 with a population
of 828,944 and a local GDP of ¥ 3.17 trillion. Located within close
proximity to larger markets in the Kansai and Chukyo regions, Fukui’s Tsuruga
Port is
now increasing its cargo capacity. It will become one of the biggest
ports along the western coastline of the Sea of Japan. In addition
to the Hokuriku Expressway, bullet train service will become
available on the Hokuriku line to allow easier access to central Japan.
Abundant
water resources and a discounted rate for electricity contribute to
the attractiveness of Fukui as a business destination. Considered by
many to be the textile capital of Japan, Fukui is the home
of Nippon
Mayer Ltd., the first foreign
industrial enterprise in Japan. It was formed in
1968 with technical and financial assistance by the German firm, Karl
Mayer, the largest Warp Knitting Machine manufacturer in the world.
Other foreign businesses that have located within the prefecture
include Abbot
Japan, Co., Ltd.
and
Dow
Corning Toray Silicone Co., Ltd.
To promote further development, Fukui is offering a unique incentive
structure including a subsidy of up to ¥ 3 billion and low interest
loans of up to ¥ 500 million for high-tech industries.
Fukui Prefecture
http://www.pref.fukui.jp/english/index.html
Fukui Prefecture industry location information
http://info.pref.fukui.jp/kigyo/index.html
Fukui Prefecture tourist information
http://www.fukui-tabi.com/kankou/en/index.asp
Fukui International Association
http://www2.interbroad.or.jp/fia-net/
Hokkaido: Japan’s northern-most region
lies at a similar latitude to Boston and Chicago or London, Rome
and Munich. It covers 83,453.57
km2 with a population of 5,662,856 and a local GDP of ¥ 20.71
trillion. Hokkaido possesses a competitive international
school,
an abundance of land and some of the most beautiful nature and living
conditions in the nation. It has a similar climate to Europe and
the United States, with cool and dry summers and snow in the winter.
Hokkaido possesses several fine
universities
and advanced
research institutes. It is seeking
to attract IT-related industries, including biotechnology and recycling.
To achieve this goal, Hokkaido opened the Chitose
Institute of Science and Technology,
Japan’s first photoscience university in 1998, and has developed
into one of the nations premier
biotech clusters.
Existing industries include food, pulp/paper/paper processed goods,
oil/coal products and machine equipments. Amazon Japan K.K., has
located a customer center in Hokkaido. Other foreign firms include
Continental
Teves Corporation,
which has a test track for automobiles; Nihon
Unisys, Ltd.,
which engages in software development, and Tycom
Corp.,
a California-based manufacturer of cutting tools for the circuit
board industry, which has constructed a state-of-the-art manufacturing
facility.
Hokkaido has also been attracting the attention of foreign entrepreneurs.
One recent success is the Niseko
Adventure Center,
founded by Ross
Findlay from Australia, This firm offers
tourists skiing, snowboarding, backcountry skiing and snowshoe tours
during
the winter season, and rafting, kayaking,
biking and rock-climbing throughout the summer. Another interesting
example is a new venture established by a U.S. English teacher in
partnership with a former Japanese manager at McDonalds to import
bison meat into
Japan.
Hokkaido Government
http://www.pref.hokkaido.jp/index-e.html
Invest
in Hokkaido
http://www.pref.hokkaido.jp/keizai/kz-krkyt/index-e.html
Sightseeing information of Hokkaido
http://www.all-hokkaido.net/marugoto/english/index.shtml
Nothern Regions Center
http://www.nrc.or.jp/index_e.html
Kyoto: A city renowned for its rich cultural and
tourism attractions, Kyoto is often considered the “soul
of Japan”. It
has been recognized by UNESCO as a World
Heritage Center.
Possessing traditional as well as high-tech industries,
Kyoto prefecture covers 4,612 km2, with a population of 2,638,519
and
a local GDP of ¥9.93
trillion. It possesses 48 universities, and the region has produced
7 of 12 Japanese Nobel Prize winners. Kyoto’s economy includes
major companies as well as small and medium enterprises with
advanced manufacturing skills. Kyoto’s unique combination
of academic ,
research and
industrial resources as well as the quality of life offered by
its position as a center of Japanese history and culture,
make it
an ideal venue to base a technology-oriented business.
Resources include the Kansai
Science City,
which is expected to be a future base for world-class
cutting-edge technologies. It is located at the intersection
of the borders
of Kyoto, Osaka and Nara Prefectures. In the City, 4,500 workers
are
now working
within 74 top-level laboratories to develop new state-of-the-art
technologies and products. The Bayer
Yakuhin Research Center Kyoto,
which pursues biotechnology-based R&D applications, is one
of many tenants.
Kyoto is also one of the venture capital centers of Japan. There
are many efforts being made by private and
public-sector entities to incubate new businesses and to establish
an accumulation of IT-related industries
that some analysts forecast
could eventually rival Silicon Valley. Many firms are now being
incubated
at the Kyoto
Research Park. It was established in 1987 as a 100% subsidiary
of Osaka Gas. Co., Ltd. and now houses over 177 domestic and
foreign companies
and research
facilities specializing in fields ranging from optics to pharmaceuticals
to the Internet.
To enhance their capabilities, Kyoto-based firms are also reaching
out to create international alliances and business relationships.
One interesting example is a $30 million agreement that will
allow Shimadzu
Corp. a $1.6 billion company that
provides measuring instruments and medical, aircraft and industrial
equipment
to market and distribute a SELDI-based protein mapping service
created by LumiCyte
Inc.,
a California-based biotechnology
services firm. Another includes a global alliance between industrial
automation market leaders Omron
Corporation,
and Rockwell Automation,
of Milwaukee, WI, to help develop, adopt, and promote common
technologies that
improve
the performance of industrial automation systems.
Kyoto
Prefecture
http://www.pref.kyoto.jp/index_e.html
Kyoto Business Location Cyber Center
http://www.pref.kyoto.jp/sangyo/
Trade in Kyoto
http://www.pref.kyoto.jp/trade/english/outline2-en.html
Tourist Information about Kyoto
http://www.pref.kyoto.jp/trade/tourism/tourism.html
Kyoto Prefectural International Center
http://www.kpic.or.jp/english/index.html
Mie: A prefecture possessing two
international resorts located within the central
region for the Japanese automobile,
semiconductor and liquid crystal industries. It covers 5,776.45
km2, and possesses
a population of 1,862,539 and a regional GDP of ¥ 6.93
trillion. Mie possesses seven universities, including Mie
University
and Suzuka
University of Medical Science,
as well as 5 junior colleges and a port
facility.
To date, approximately 50 foreign-affiliated companies have
been established in Mie. Two examples include Cabot
Microelectronics Corporation
and Borg
Warner Morse TEC Inc.
Mie also serves as the headquarters for UL
Apex Co., Ltd., Japan’s
strongest testing and certification agency. It was formed
last April with the integration of Underwriter Laboratories,
Inc.,
wholly-owned UL-Japan subsidiary and Apex International,
which
was
also acquired by UL this year. In addition, since 1994, the
Japanese headquarters for FairCom.
Japan,
a
software research and development company, headquartered
in Columbia, Missouri,
has been located in Mie.
The prefecture has been emphasizing the development of four
industries. These include information and communications,
the environment,
medical/health/welfare and marine services. Mie has announced
specific goals and by FY2010
it hopes to increase the percentage of venture and other
enterprises with advanced technology operating within the
prefecture from
20 percent to 40 percent . They are also seeking to encourage
experimentation
and research, and to increase the number of high-standard
industrial parks from one
to four. Mie is also improving its traffic and communications
infrastructure.
It is also known for its pioneering
work in CO2 emissions trading. Two projects
currently under development are Crystal Valley, which
will focus on the development of liquid crystal flat panel
displays and the Medical Valley, which is seeking to develop
international
linkages and advance research in the biotechnology, pharmaceuticals
and other
health and medical fields.
Mie Prefectural Government
http://www.pref.mie.jp/ENGLISH/index.htm
Tourism information about Mie Prefecture
http://www.kankomie.or.jp/kanko/discover/
The Mie International Exchange Foundation
http://www.mief.or.jp/en/index.html
Shizuoka: Lies at the foot of Mt. Fuji, the
symbol of the Japanese spirit. Shizuoka is located almost in
the center
of Japan.
It covers 7,779 km2, with a population of 3,785,811 and
a local GDP of ¥ 14.81
trillion. Situated within a 200 km radius of 40% and a
300 km radius of 70% of Japan’s population, 170
foreign enterprises (89 are American firms) and more
than 50 large-scale
manufacturers -- have
chosen to locate in Shizuoka.
They believe it to be an ideal distribution platform. Examples
include Lands’ End
Japan,
Peugeot
Japan,
German underwear manufacturer
Triumph
International Japan, Ltd.,
U.S. lubricating oil manufacturer Oronite
Japan Ltd.
and H.B. Fuller Japan, a subsidiary of a U.S. firm that
is among the
five leading adhesive manufacturers in the world.
Japanese blue-chip companies such as Honda
Motor Co., Ltd. and
motorcycle maker Yamaha Motor
Co, Ltd. also have their head offices in this area.
These companies are attracted by
access to a new
airport, as
well as Shizuoka’s
existing
container port facility and general
and medical
universities. Shizuoka
also offers dramatically low prices for land given its
geographical proximity
to three major metropolitan areas. In addition to offering
a strong manufacturing and logistical platform, Shizuoka
also possesses
many
technological strengths in areas such as optoelectronics,
healthcare and medical services.
Shizuoka Prefecture
http://www.pref.shizuoka.jp/kikaku/ki-20/english/index.htm
Shizuoka Foreign Enterprise Development Guide
http://www.pref.shizuoka.jp/syoukou/eng/
Shizuoka International Business Association
http://www.siba.or.jp/einde/einde1.htm
Shizuoka Guide
http://www.shizuoka-guide.com/
The Shizuoka Association for International Relations (SIR)
http://www.sir.or.jp/english/index.asp
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January
12, 2004