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Urban innovation, deregulation among keys to improving Tokyo

Global cities are competing with each other to be the most innovative by combining many kinds of intelligence, such as that of technology and of people with different talents.

“Urban innovation is a global agenda because everybody, from many different countries, tries to solve various urban problems together,” said Heizo Takenaka, director of the Global Security Research Institute at Keio University, where he is also a professor in the Faculty of Policy Management

Urban innovation cannot be achieved without residents in many different professions and of various backgrounds, but problems arise in big cities: congestion, crime and pollution. Therefore, cities have to evolve using the dynamism of the talents and abilities of the people to maintain order.

Takenaka hopes the Innovative City Forum, which will be held from Oct. 16 to 18 in Tokyo, will be a stimulating platform to declare “the era of globalization and innovation” and in which speakers and audience from all over the world will present various examples and share their awareness of urban challenges.

Alongside his other positions, Takenaka is a Program Committee member of the Innovative City Forum and the director of Academyhills, the space for intellectual exchange at Roppongi Hills in Minato Ward, Tokyo, where the forum will be held.

The forum is set to have three keynote speeches and about 10 sessions on urban issues over the three days. Speakers and panelists include Takenaka, Hiroo Ichikawa, a professor of urban policy at Meiji University, MIT Media Lab Director Joichi Ito, Fumio Nanjo, director of the Mori Art Museum, and other experts from Japan and overseas, mainly from Asia.

Asian cities such as Singapore have some elements from which Tokyo can learn, Takenaka said.

For example, Singapore is located west of Jakarta but Singapore’s time zone is an hour ahead. That way, financial markets in Singapore can be open an hour earlier, the same time as China, so it can be a competitive financial hub, Takenaka said, adding that he does not know exactly why Singapore’s standard time is earlier than Jakarta’s.

Also, he pointed out that Singapore’s Changi Airport makes it possible for transiting passengers to exit the airport and visit the city.

“When I talked to Lee Hsien Loong, who is Singapore’s prime minister, I said to him, ‘Singapore is making lots of efforts.’ He said to me, ‘We have to. Japan is big, but we are small. Unless we keep running, we cannot stand,’ ” Takenaka said.

In the 2012 version of the annual Global Power City Index, Tokyo is No. 4 and Singapore is No. 5. Takenaka, the chairman of the GPCI committee, called Tokyo “lucky” because, as Lee pointed out, Tokyo has a larger domestic market.

The GPCI uses a method developed by the Institute for Urban Strategies at The Mori Memorial Foundation to rank the “comprehensive power” of major cities around the world. Each city is ranked in six areas — economy, research and development, cultural interaction, livability, environment and accessibility — with the additional factors of how these aspects are seen from the viewpoint of five “actors”: manager, researcher, artist, visitor and resident.

For 2012, the top three in order are London, New York and Paris. Seoul, No. 6, and Hong Kong, No. 9, are the other Asian cities in the top 10.

The GCPI and urban innovation is discussed at the World Economic Forum, of which Takenaka is a member of the WEF’s Foundation Board. The mission of the WEF is to improve the state of the world, Takenaka said.

Japan’s government is aware of the importance of making Tokyo competitive and the Prime Minister’s Office has set up a working group to discuss the National Strategic Special Zones, which will be designated as model areas with special benefits by way of extralegal measures.

Takenaka praises the move, saying the working group is discussing many ideas on the special zones.

In order to make Tokyo a more competitive city, deregulation in many fields will be necessary. Cities continuously need to offer new lifestyles and regulation needs to change accordingly, he said.

For example, supermarkets that are open 24 hours were nonexistent in Tokyo in the 1990s, but more and more people moved to Tokyo and new lifestyles emerged. As such, supermarkets open 24 hours appeared after laws regulating large-scale retailers were loosened.

Deregulation is necessary in choosing flight routes, he said. The so-called Open Skies policy, which allows airports to choose flight routes instead of governments, is only partially in practice in Japan. If the restrictions are lifted, airports can increase routes that are in high demand, improving their earnings and thus services to customers, Takenaka said.

Also, deregulation will be necessary in trying to attract foreign direct investment. For example, deregulation in education and medicine can eliminate problems that discourage foreign executives from coming to Tokyo as CEOs of foreign-capital companies.

“They don’t want to come to Tokyo even if they get a promotion because it is difficult to find schools for their children and they are worried about language barriers in communicating with doctors,” he said.

Deregulation in education will encourage schools to establish English-language courses. Also, there will be more English-speaking doctors if regulations are loosened to enable those with medical licenses from outside Japan to practice medicine in Japan, he said.

“These kinds of things, I am hoping, will be possible in the National Strategic Special Zones,” Takenaka said.

Japan lags behind many countries in deregulation. Takenaka cited the World Bank’s ranking on what countries or regions are the most business friendly thanks to deregulation. Singapore and Hong Kong always compete for the top spot, while Japan was 24th in 2012, according to Ease of Doing Business Index compiled by the World Bank. A high ranking means the regulatory environment is conducive to business operation, the World Bank says.

Takenaka warns that Japan may lose its competitive edge to other Asian countries if it is “too comfortable to change.”

He also insists on the importance of economic growth.

He cited a comparison of the gross domestic product of Argentina and France in 1950 and today. France’s GDP was lower than Argentina’s in 1950 but is now 2.3 times as much as the South American country. Also, France’s annual GDP growth is 1.5 percentage points higher than Argentina’s.

“That to the power of 60 makes a huge difference,” Takenaka said. “My point is that tiny growth makes a huge difference to our grandchildren’s generation.”

Creating National Strategic Special Zones

Download the PDF of this Innovative City Forum