• Kyodo

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In an effort to turn around its struggling local economy, Mie Prefecture has launched an ambitious project to turn the sightseeing spot of Shima into a hub for information technology companies.

With its local economy dependent on tourism revenues, Shima has been struggling since the bursting of the bubble economy in the early 1990s.

With the opening of the Shima Cyber Base Center in the town of Ago on March 3, Gov. Masayasu Kitagawa made clear his intention to “expand the project with this center as its core.”

Kitagawa, who visited New York and other U.S. cities from late April through last week in a campaign to attract IT-related enterprises to Shima, is also the president of Cyber Wave Japan Ltd., a public-private company that manages the cyber center. The center will house business offices and provide circuits for Internet access.

While Shima is located at the juncture where large-capacity undersea fiber-optic cables link Japan with the rest of the world, it remains uncertain how many enterprises will be attracted to the area.

Taking advantage of Shima’s position as a hub for fiber-optic cables, the prefecture plans to build an Internet exchange, which will act as a transit point for data transmitted overseas from Tokyo, Osaka and other places.

Under the “Shima Cyber Base Project,” six fiber-optic cables — five to connect Japan with the U.S., Australia and Southeast Asia, and one for domestic use — will be installed in the area by the end of this year. Each cable will have a capacity equal to about 1 million telephone lines.

“If enterprises locate their offices here, they can exchange information with foreign countries at high speed without providers,” a prefectural official said.

Since the bubble economy burst, Shima has been trying to attract new industries to the area. In fiscal 1994, about 20 million tourists visited the 10 cities and towns in the Ise-Shima area. This number dropped to about 11 million in fiscal 1999, however, leaving the area with plenty of unused buildings.

Tsutomu Nakajima, president of the Ago Town Chamber of Commerce and Industry, said vacant corporate retreats can be used as “resort offices,” where company staff can engage in remote work using high-speed circuits.

But will such offices lead to cost reductions and increased efficiency? “At this stage, we cannot show that concretely in figures,” another prefectural official said.

“What is important is to expand and improve the fiber-optic network in Mie Prefecture,” said an official of the Research Institute for Internet Strategies, a Tokyo-based think tank.

However, according to an official at an information infrastructure company, “The problem is whether it is advantageous for enterprises to locate their offices here in terms of office rental fees and securing personnel.”

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