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Japan’s public policy is killing rural entrepreneurship

by Amy Chavez

A sweet 86-year-old lady trundled past my shop pushing her squeaky cart full of vegetables. From deep inside her bonnet, she looked out at me, narrowed her eyes and said “Anata dake mōkaru,” then turned and continued on her way. I used to like this woman. Surely she was just having a bad day.

A few days ago, I heard another business owner (who operates the only year-round restaurant in our community and has been in business for over 60 years) complain about other Shiraishi islanders who had sneered “Anata dake mōkaru,” which means, “Only you are profiting,” and implies that you are doing something solely for personal gain.

For years I have struggled to understand why the local people on the island are not interested in making their activities more profitable. Individuals seem to consider their side-business a hobby rather than a tool to supplement their regular income or pension. Even government programs ostensibly aimed at rural revitalization are designed only to sustain themselves and seldom run at a profit.

The idea that running a business for profit is ill-mannered and greedy came into vogue during Japan’s Edo Period. In their book “Ethical Capitalism,” Patrick Fridenson and Takeo Kikkawa write, “Edo-period Japan regarded profit and commerce as vulgar.” Instead, you should be running a “service” for people.

Despite the Edo Period having ended in 1868, I have never heard a Japanese person admit that “Business is great!” Even in the historically merchant city of Osaka, the standard answer to “How’s business?” is “Bochi-bochi” (“So-so”) even when it’s steaming ahead. On our small tourist island, at the end of the busiest days of the summer, when seasonal businesses along the beach pull in most of their profits, the proprietors never celebrate “a great day.” Yes, the beer flows, but it’s all about how tired everyone is and how hard they worked.

With Japan’s current inbound tourist boom (from 4 million foreign tourists in 2000 to 28 million in 2017, and a projected 40 million will visit in 2020), not a day goes by when the media doesn’t highlight some issue or other associated with this influx, such as overcrowding or lack of infrastructure. Businesses are popping up everywhere to meet the demand for restaurants, cafes and guide services, and new minpaku laws enable the average person to turn unused living quarters into Airbnb-style accommodation.

In the meantime, however, idyllic tourist spots in the Japanese countryside languish. Despite our island’s admirable track record for attracting overseas tourists, our prescient implementation of foreign-friendly infrastructure, and having over time fostered a community experienced in dealing with and accepting foreign visitors, we’ve been overlooked or ignored by tourism authorities keen to pull non-Japanese tourists into the big cities. Municipal governments decide where they will invest their tourism dollars, and they don’t always invest in the communities most open to tourism.

Efforts by the public sector to encourage revitalization in the countryside include providing communities with business ideas and encouraging them to adopt these predetermined schemes. Indeed, the internationalization of our island 25 years ago was due to such a framework, which aimed to provide high-quality, reasonably priced accommodation to foreign travelers so they could see and experience traditional Japanese life in the countryside. This goal culminated in the building of the Shiraishi International Villa (one of five international villas placed around Okayama Prefecture at the time), making Shiraishi the first island in the Seto Inland Sea accessible to foreign tourists through official information provided in English.

With less reliance on guidebooks nowadays, and amid the burgeoning capabilities of the internet, our foreign tourist streams have been lured away to bigger, more modern entertainment destinations. Our infrastructure is now barely used, and the island has been effectively de-revitalized as tourism dollars are redirected to more fruitful island havens such as the Benesse “art islands,” or the bicycling paradise of the Shimanami Kaido.

While revitalization programs are commendable, no one seems interested in tapping the potential that already exists in the private sector. With island populations at crisis numbers (ours is 490) and an imminent “sink or swim” state of affairs, it’s time policymakers recognized the symbiotic relationship between entrepreneurship and regional revitalization. Small enterprises are the hands behind the communities that thrive. Tourist-friendly businesses and micro-businesses spearheaded by those who have access to human resources, expertise in business and the drive to succeed can only buoy revitalization efforts.

While the local governments could better support small enterprises and entrepreneurs, public policy often prevents this from happening since governments don’t feel they should promote private businesses. At the same time, the island population here is so accustomed to subsidies, there now exists a false perception that if you are not part of a government scheme, your business must not be worthwhile. It is very difficult, and often impossible, for budding enterprises to get the local populace behind them.

Small actions such as creating annual small-business awards to recognize entities for what they do best — providing a particular service, preserving traditional craftsmanship, or for their commitment to the community — would go a long way to creating interest in and encouraging support of local businesses.

“Increasing public interest in starting up enterprises is important,” a 2017 Japanese government white paper on small and medium enterprises says. “A key motivator for people to start up enterprises seems to be recommendations from close friends.” It also notes that “smaller enterprises utilize more various human resources, including women and seniors,” two sectors in which Prime Minister Shinzo Abe is pushing for job growth.

By encouraging the rural private sector, we can break down the current barriers to starting new enterprises (community approval, decision by consensus and stifling public policy). This would help inhabitants see new businesses not as a threat but as necessary to nurturing a “growth mindset” and a community in which people can create.

“Anata dake mōkaru” is hardly a Hobbesian concept on a small island with just a handful of businesses still operating despite a tourism downturn. From now on, I’ll consider this statement a rite of passage into true entrepreneurship.

Japan Lite appears in print on the last Monday Community page of the month.