The need to decentralize the nation’s capital has become more important than ever, with government agencies, businesses and the population being concentrated in Tokyo beyond a healthy level.

As living with the coronavirus becomes more normal and with the risks of other pandemics growing, Japan needs to physically disperse important agencies and facilities around the country.

And with remote work becoming part of the norm since the declaration of the state of emergency earlier this year, the country has a better understanding of how technology can help change many business practices we thought would not be possible before the COVID-19 outbreak.

In the age of the pandemic, some people have begun advocating for the idea of moving away from the reliance on major cities where congestion is an issue, and many companies are rethinking the need to maintain offices in Tokyo. Some businesses have even taken the drastic step of moving their headquarters to rural areas such as recruiting and staffing giant Pasona, which decided to relocate its headquarters to Awajishima, Hyogo Prefecture.

Certainly, this kind of opportunity for drastic change does not come along often, and if Japan does not seize this moment, Tokyo will remain one of the most concentrated capitals in the world.

And yet, unfortunately there are signs that Tokyo may continue to remain so. The first big sign the status quo was not going to change anytime soon was when Tokyo was initially excluded from the Go to Travel campaign, which inadvertently reminded people how much the country depends on the city. Another involved the actions taken in order to ensure that the delayed Olympic and Paralympic Games would be held next year, as some people want to see as few disruptions as possible so things go as planned. It appears that officials and the business community involved in the Olympics wanted to make sure that Tokyo was in good shape to welcome people from all over the world rather than push for major changes.

With tourism being one of the hardest-hit sectors — which is fragmented with many small- and medium-sized businesses — the government policy to resuscitate the industry with subsidies is sensible. The number of business closures, bankruptcies and job losses has been enormous, and the Go to Travel campaign, which began on July 22, has helped increase demand for domestic travel.

Despite the high hopes of the travel industry, however, Tokyo was excluded from this campaign until Oct. 1 out of fear of triggering a second wave of COVID-19 in the country. In addition, some locals in rural areas were not too happy with having visitors from Tokyo due to fear that the virus would spread to their communities.

The disappointment among people in the industry, both in Tokyo and elsewhere, was considerable, with some painting a bleak outlook for the future of their sector.

It is too early to tell how much of an impact the inclusion of Tokyo from the Go to Travel campaign has made, but the expectation is considerable as close to 25% of travel service providers are located in Tokyo. If the impact is as large as is estimated — to the tune of ¥770 billion, according to the Daiwa Research Institute — it is likely that the importance of Tokyo will be reconfirmed.

Another reason to move operations out of Tokyo is innovation, with many local areas coming up with new ideas and initiatives. There are three examples that stand out in particular.

Hoshino Resort Company, which has traditionally catered to inbound tourists and domestic customers with high incomes, has proposed the promotion of micro tourism, in which an attempt is made to build an ecosystem around areas defined as “local zones.” The concept is a departure from the country’s excessive dependence on inbound travel and calls for a renewed focus on domestic tourists and those from nearby areas.

The company hopes to help rejuvenate smaller, local economies by promoting the micro tours and creating a self-sustaining ecosystem involving accommodations, transportation, travel agencies, small retail shops, makers of local products and more.

By seeking coordination and cooperation from a variety of players in an area, they want to create tailored services specifically to local populations while developing regional industries, arts and crafts.

The second example is Kanazawa’s initiative. The capital city of Ishikawa Prefecture has become known for its many unique local charms, especially becoming popular after the Hokuriku bullet train came into service, bringing in both domestic and inbound tourists to the area. It has become an example of “overtourism,” with travel service providers having grown busy accommodating the rapid surge of tourists, local food prices skyrocketing, while at the same time many craftsmanship have started retiring of old age, making their skills all the more valued.

Amid the COVID-19 pandemic, local businesses have reflected upon what made Kanazawa unique in the first place — the combination of fresh seafood from the Sea of Japan and a culture of hospitality that dates back to the Edo Period.

With the slow down in business, local sushi chefs have had time to experiment and develop new menus. The shortage of skilled workers and experienced service staff has also become less of an issue as many businesses now have time to train replacements. And local customers who couldn’t enjoy what was available in their own areas due to the influx of tourists are now able to appreciate the values and offerings of their own community.

The third example is the use of technology. NewMe, a small robot developed by Avatarin, a spinoff from All Nippon Airways, offers the opportunity to connect small retailers in remote locations to customers anywhere. The use of this robot at retail shops specialized in noodle and sake in Nagasaki Prefecture is an example of how customers can experience shopping by interacting with store staff, as if they actually visited the shops. Many small shops in local areas have little means to communicate their offerings widely to the people in distant locations, including those in big cities. Now with the help of robots like NewMe and an internet connection, small businesses are able to connect directly with customers from all around.

Rather than depending upon the population and the sheer economic size of Tokyo, local areas could capture great opportunities by experimenting with new approaches to prosper with like-minded businesses and community members.

Such examples show that necessity and implementation of creative and innovative solutions could be developed in local areas for local areas. It certainly can add new perspectives in thinking about the overcrowded metropolis that is Tokyo.

Yoko Ishikura is a professor emeritus of Hitotsubashi University and serves as an independent consultant in the area of global strategy, competitiveness and global talent. She is a member of the World Economic Forum’s Expert Network.

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