Source: Global Times
Japanese companies are leaving Tokyo and moving to the countryside When Mitsudo Watanabe was a young man, he moved to Tokyo hoping to become a well-known musician in the big city. He failed and eventually returned to his hometown of Yamanashi, an area west of Tokyo known for its agriculture and Mount Fuji. In 2021, Amuse, a major entertainment company that manages Japan's top artists and singers, moves its headquarters from Tokyo to Yamanashi. Mr. Watanabe works there now. "I couldn't believe that a high-profile company like Amuse would move to such a peaceful location," he said.
More and more Japanese companies are leaving Tokyo for the countryside. Last year, 335 companies moved from Japan's urban areas to the countryside, an increase of nearly 40 percent from 2019. This trend has been reinforced during the pandemic, as remote working has taken off and low land prices in rural areas have begun to look more attractive to employers. Amuse's executives also decided to move to Yamanashi, hoping to improve their employees' work-life balance and boost their happiness in a place with a beautiful natural environment.
Corporate fragmentation has long been a goal in Japan. During Japan's postwar economic boom, many citizens flocked to the growing capital. Eventually, the Japanese authorities began to see this as a problem, especially in the 1990s as the economy entered a period of stagnation. With rural areas increasingly depopulated, the Japanese government is pushing urban people out of the country, hoping to spread employment and corporate tax revenue. Under the banner of "regional revitalization," Japan's central and local governments offer tax incentives and subsidies to encourage companies to move their headquarters or some office functions to less populated areas.
Reducing the risk of natural disasters is another reason to relocate, especially in a country as prone to earthquakes as Japan. Experts estimate that there is a 70 percent chance of a magnitude 7 or greater earthquake hitting Tokyo in the next 30 years. "Business continuity is the most important thing for us," says Tsunaji Iwata of AXA Life Insurance. He sees the 2011 Tohoku earthquake and tsunami as a turning point. Since then, the company, like a number of others, has begun to consider spreading people and resources around because concentrating in Tokyo is too risky. In 2014, the company opened a new headquarters in Sapporo, the capital of Hokkaido.
However, Japan is still too Tokyo-centric, and companies are not moving out of the capital as fast as they would like. While remote working has become more accepted, face-to-face meetings are still an important aspect of Japanese work culture. As a result, many employees have to meet with customers and business partners in Tokyo. While some employees may enjoy the idyllic countryside, many prefer the convenience of the capital. People with children also worry that a small place will not be able to enjoy quality education in the city.
Another problem is a lack of planning and coordination by Japanese authorities. Motohiro Sato of Hitotsubashi University in Tokyo says that rather than creating new economic hubs, many relocation efforts are "simply spreading businesses across the country". He sees this as a hangover from Japan's past economic boom, when officials promoted the idea of "balanced development" and wanted thousands of cities across the country to grow at roughly the same rate. While some new growth centers have emerged in recent years, they have not been big enough to challenge Tokyo's dominance. "The Japanese government needs to think more about how to distinguish between areas that need investment and those that don't," Mr. Sato said. Otherwise, Tokyo will continue to win. (Written by Sam Quinn, translated by Shufan)