Striving to Develop Industrial Clusters as a Means of Supporting Sustainable Regional Growth

Boosting sustainability by solving challenges through united efforts with regional communities

Drawing on knowledge from the fields of business administration and accounting, I conduct research on management methods that facilitate sustainable regional growth. One approach that I am exploring is the development and operation of systems known as industrial clusters, which involve creating collaborative networks that bring together multiple organizations and thereby generate new value in regional communities.

The growth of industry in a region is what serves as a driving force for revitalizing that region. Enabling corporations to collaborate with other corporations or organizations, including those in other types of industry, opens up possibilities for business development, including the kind that a single company might struggle to handle alone. If each company becomes able to secure stable revenue, the synergy between them will boost the positive economic impacts, creating employment opportunities and in turn supporting and involving the younger generations. I believe that successfully establishing a business model that generates a virtuous cycle is the key to increasing regional sustainability, both economically and socially.

We are currently pursuing activities to encourage the development of such clusters in five areas: the Tokachi region of Hokkaido, Fujinomiya City in Shizuoka Prefecture, Tochigi Prefecture as a whole, Niigata City in Niigata Prefecture, and the southern region of Kumamoto Prefecture.

In these regions, which have prosperous agricultural industries, work is in progress on a type of initiative known as “Food Valley.” The name Food Valley is based on Silicon Valley in the US and the way in which it is famous for its dense concentration of computer-related corporations. The concept is to develop a business model drawing together various inter-related industries based on the central topic of food. As many people in Japan have a strong interest in food safety and health, we are currently looking into new developments that will also address such topics.

At the same time, as the circumstances and the challenges that need to be addressed differ from region to region, it is difficult to find an approach that fits all. Another issue we face is that it is hard to find leader figures with the enthusiasm to pursue such initiatives on an ongoing basis. We would like to see the heads of local government bodies lead such projects in the long term as part of policies for community revitalization, but there is no guarantee this will be possible in all regions.

The path ahead is filled with challenges. However, I am keen to pursue these initiatives in collaboration with the local people in these communities because I am confident that we have the right general approach.

Team-based seminar course activities aimed at developing solutions to social challenges from various perspectives

At the Faculty of Sustainability Studies, we have a unique system, in which faculty members offer two types of seminar course: A and B. Type A are courses that students start in either their second or third year and continue to take until their fourth year. On the other hand, Type B are courses that students can take for just one academic year, in the second, third or fourth years of their studies.

In my seminar courses, types A and B both address the same research topic, but involve a significantly different approach to research. In Seminar A, where students have more time to delve into the research in detail, I place emphasis on the independent initiative of the students, and they have the free choice of which region and what to research.

In Seminar B, I specify the region and subject of research in order to ensure that students cover all they need to know about the basics of business administration and accounting, as well as research and survey methodology, and directly apply what they have learned. The areas I chose to cover this academic year were the town of Ikeda in Hokkaido, a project we became involved in last academic year, in which the municipal government is pursuing business development encompassing the cultivation of grapes and the production and sale of wine; the town of Itayanagi in Aomori Prefecture, a municipal government project to develop a business model covering apple cultivation and the production and sale of products such as juices and jams; and Niigata Prefecture, which is investigating the possibilities for the development, production, and sale of new Japanese sake (rice wine) and potential methods for revitalizing the refined sake industry.

In order to sustain and expand a business, it is important to consistently secure profits. With this in mind as the key factor behind sustainable growth, we investigate where the potential obstacles to such growth lie and how we might be able to resolve those challenges.

The students divide into teams which each take on a certain role, as if they were a department of a company, such as product planning, marketing, or public relations. From their respective points of view, the teams each identified the challenges that need to be addressed to generate vitality in the wine, apple, and refined sake industries, and developed plans toward solving those challenges.

Different standpoints mean different perspectives. As people from such differing positions collaborate, various outcomes and challenges arise. I hope that the seminar gives students a hands-on experience of this and that they can draw it on to explore the next step.

Encouraging participation in classes allows for mutual inspiration and learning

This is the fourth year since I started teaching at Hosei University. Sometimes I gain inspiration from students as they come up with interesting ideas that would not have occurred to me.

The style I adopt in teaching classes has also changed significantly since I came to Hosei University. When I first started, I would simply go through what was on my lecture slides, but I received the feedback that such a one-sided approach would not allow the students to really learn. I then tested a number of approaches, and gradually switched to a teaching style that allowed the students to also actively participate in the classes. Now, I start a class with an around 10-20-minute explanation, after which the class is interactive―that is, I put a question to the students and encourage them to address the class. As a result, sometimes students also prompt me to notice things, contributing to my store of “phronesis” or “practical wisdom.”

Investing time to build trust with the aim of developing a role model for regional revitalization

I first became involved in research related to regional economies just as I was completing my PhD, when I received the opportunity to participate in a project sponsored by the Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT) on the use of biomass.* In order to utilize biomass as a source of environmentally-friendly energy, it is essential to have the cooperation of people involved in primary industry, particularly those involved in agriculture. I therefore began to visit and survey the situation in various regions. As I learned more about the realities of regional industry, I formed an interest in industrial clusters, and that interest developed into my current research.
There is currently concern regarding the decline of regional industry, as many communities are struggling due to the fact those engaged in agriculture, forestry and fishing are reaching old age and having difficulty finding successors to take over from them when they retire. The national government is pursuing initiatives aimed at the development of a “sixth industrial sector”** and other such policies aimed at revitalizing regional industry, but these are not without their problems. For people who have always been engaged in primary industry, sales and marketing are entirely different roles to what they are used to. Many of those in primary industry were indeed hesitant as they feel that while they may be able to handle production and processing, they are not capable of coping with sales as well.

What is more, in rural areas, which are highly conservative, residents are prone to dislike change, and tend to be skeptical about such projects. When someone who is seen as an outsider comes into these established communities with talk of such new initiatives, the residents do not really have faith in them. It is important to invest time in building up trust. If you spend time talking with the community members―maybe joining them for a beer or cup of sake on a number of occasions―you will gradually begin to convince them that you are truly serious about the project.

In Japan the development of industrial clusters is still in the experimental phase. The approaches and challenges faced also differ from region to region. Alongside investigating possible means of solving each of the individual issues, in the future I would also like to pursue the development of a business model for revitalizing industry that has the versatility to be applied to various regions.

* Biomass

Biomass is organic material from plants and animals (excluding petroleum and other fossil fuels) that is used as a renewable source of energy. There are a wide range of types of biomass, including waste material such as livestock manure and food waste, discarded construction material and other such unused resources, or crops cultivated for use as energy resources.

** Development of a “sixth industrial sector”

The development of a “sixth industrial sector” is an initiative aimed at bringing prosperity to regional economies by ensuring that those engaged in agriculture, forestry, and fishing (primary industry) are also involved in food processing (secondary industry) and distribution and sales (tertiary industry) and thereby creating synergy that boosts the value of the products. The term “sixth sector” is based on the concept of multiplying the primary, secondary, and tertiary sectors (1×2×3＝6).