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Messages from Keidanren Executives April, 2022 Repopulating and Revitalizing Regional Japan

Yoshiro AIKAWA Vice Chair of the Board of Councillors, Keidanren
President and Chief Executive Officer, Taisei Corporation

It has been some time since the phrase "regional revitalization" has been covered extensively in the news and elsewhere. In 2014, when the Japan Policy Council published its sensational report stating that as many as 896—roughly half—of Japan's municipalities are at risk of disappearing, the Japanese government began developing policies to promote regional revitalization with a renewed sense of crisis.

Yet the flow of people into the Tokyo metropolis has continued unabated—until the start of the pandemic, at least. Regional revitalization, which has trade-offs with urban migration, has necessarily taken a back seat during this time.

Regional revitalization is a key pillar of Keidanren's "sustainable capitalism" strategy. Japan's sustainable economic growth is nearly impossible without tapping the industry and business potential of rural areas, such as for agriculture and tourism. And, given the growing intensity and frequency of extreme weather events in recent years, we must not ignore the possibility that dwindling human resources stemming from the loss of vitality in rural areas may seriously impact the capacity of these areas to adapt to and withstand future disasters.

2021 was another year of many natural disasters in Japan, most notably the Atami landslide. People responding on the front lines to such crises were predominantly the staff of small and medium-size local construction companies. The lost vitality of rural communities is a barrier to the future business continuity of those companies and presents the danger that the guardians of the communities will leave. Reversing urban migration is essential for building the very foundation of a resilient society that can withstand the major disasters likely to happen in Japan going forward, such as the Nankai Trough earthquake and Tokyo inland earthquake.

There is no miracle solution. Obviously, policies should be tailored to the unique circumstances of each region. However, considering that many young adults move to the cities to study and work, we should focus our attention first on creating places to work and study in rural areas.

The pandemic has dealt a heavy blow to regional economies, but it has also given businesses reasons to consider adopting new ways of working (such as remote working), moving their headquarter functions out of the cities, and repatriating their supply chains. The pandemic has thus begun to shift the flow of people.

The Japanese government should ensure that these trends continue. In addition to expanding support to businesses, it should fully consider moving the facilities of university and national research institutions, which tend to cluster in major cities, so they are more widely distributed to rural areas.

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