Breathing new life into Japan’s small towns

 —  Article by Serene Lim
Yoshino in Japan
Image credit: Shutterstock

As the opportunities offered by life in the big cities continue to draw in people from rural areas, small towns are having to change with the times, or face fading into an uncertain future.

In Japan, local governments and private enterprises are forging new ways to compete with the relentless pace of urbanization, from cutting corporate taxes to testing new business models. The aim is to revitalize the increasing number of empty stores, homes and other business spaces.

“Progress is slow, but the nature of the problem isn’t something that can be solved within a short time frame,” says Naoko Iwanaga, research manager, JLL Japan. “Japan is just at the initial stage of tackling this issue at the moment. It can only be approached from a long-term perspective.”

Stemming the tide

Japan has long grappled with an exodus of young people to cities like Tokyo and Osaka. Wild boars now roam free where there were once people and thriving farmlands. Schools in towns such as Tochikubo in the Niigata prefecture have as few as eight children.

Even prefectures with bold plans like Minami Uonuma – which boasts Japan’s first global IT park, a new hospital, medical college and shiny elderly-friendly residences – failed to woo more residents.

But there are some promising indications of movement in the right direction. Kamiyaka, a mountain village, is described as “Japan’s answer to Portland, Oregon” as digital nomads and mid-career professionals open satellite offices and organic restaurants.

The ski town of Niseko saw its population grow by more than 6 percent after boosting tourism and wooing foreigners. It boasts Japan’s only international school located outside of a big city and has appointed foreign ambassadors residing in the area to promote its attractions.

Private businesses are also getting involved. Airbnb, for example, has built a seven-guest home in the logging town of Yoshino that also served as a community centre. Locals took on the roles of hosts, cooking meals and becoming guides to out of towners eager to experience activities from fishing to carpentry. According to Airbnb, the Yoshino Cedar House received 346 guests in its first year and earned local hosts US$2,139 as a result. Since opening, Airbnb reported that there has been interest across villages in Japan keen to adopt a similar model of “community-driven hospitality”.

“Such private sector initiatives are laudable as many small towns can find it challenging to generate new business or employment,” says Iwanaga. “That said, there needs to be careful planning and a clear discussion between private enterprises and towns to ensure the benefits goes to the locals,” she says.

The long road ahead

The government first launched strategies addressing the issue of stagnating small towns four years ago. Corporate taxes were cut for businesses relocating out of Tokyo and grants were given to local governments to promote their own industries.

Other municipalities are experimenting with new businesses and ideas such as a focus on education. The town of Osakikamijima is hoping to set up an offshoot of College of the Atlantic in Maine as a way to grow the student population. Outside of Tokyo and Osaka, Fukuoka has found a niche as a start-up city and saw its population increase by 75,000 to 1.5 million from 2010 to 2015.

A looser immigration policy has been proposed. In some towns, immigrants have helped boost the numbers and the Japanese are showing signs of coming around to welcoming foreigners.

The government is considering allowing for more foreigners in regional areas, Iwanaga says. These potential residents would be accepted based on their interest in Japanese culture and finding work with local companies. “It would help ensure successful continuity of expert technical tradition and local culture. These new residents could work in firms that observe traditional crafts and techniques, for instance,” she adds.

Still, these efforts’ have not entirely curbed the desire for big cities.

“Cities have been seeing continued population inflow – the greater Tokyo area has seen net population inflow for 22 years straight,” says Iwanaga. This shift is exacerbated by the population falling from a peak of 128 million in 2008 to a reported 125 million in 2017.

Longer-term commitments

Incentives and subsidies for parenthood are being explored. Nagicho, a small town in the Okayama Prefecture with a population of less than 6,000, raised its fertility rate from the national average of 1.4 children to 2.8 children in 2014. A slew of benefits from the local government await parents upon birth of their child, including subsidised baby-sitting, free healthcare for children and a celebratory gift of 300,000 yen (US$2,882).

On a national level, Prime Minister Shinzo Abe aims to raise the birth rate to 1.8 per woman through relaxing regulations around childcare providers and helping women to get back to work after childbirth.

“Japan has a long road ahead to tackle these issues, and there are no clear and easy resolutions,” says Iwanaga. But the silver linings, small as they may be, “may prove to be the answers the country is looking for.”

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