Media Mix, March 22, 2015

Route of current Hokuriku Shinkansen in red

Route of current Hokuriku Shinkansen in red

Here’s this week’s Media Mix, which is about the hype over the new Hokuriku Shinkansen. Most of the column discusses the way the project prioritizes travelers going to and from Tokyo at the expense of everyone else who lives along the line, or who may want to use it for purposes other than going to and from Tokyo. Some of the articles I read centered on businesses that were using the new train as an excuse for moving their operations out of the greater Tokyo metropolitan area to the Hokuriku region. Almost everyone covered the relocation of two companies, YKK and Yusukin Pharmaceutical. YKK has always had a presence in Toyama, where most of its factories are located, and the company has decided to move more of its administrative functions closer to its production base, saying that Hokuriku is less prone to natural disasters than is Tokyo, where YKK’s headquarters will remain though reduced by some 230 employees. The new shinkansen is presented as making the move possible, since staff can travel quickly between Toyama and Tokyo, but in essence the reason is safety and stability, conditions that more large companies should consider if all their operations are concentrated in Tokyo. If a major earthquake hits the capital, their businesses could be completely wiped out. Yusukin, which mostly makes medicinal ointments, says it is moving to Toyama because the area is “traditionally” Japan’s pharmaceutical capital, so it will be in closer proximity to like-minded companies and suppliers, but a company representative told Tokyo Shimbun, “We thought it wouldn’t hurt to move some of our functions to Toyama…to disperse the risk of disaster.” Nikkiso, which makes dialysis machines, is also going to move its factories from Shizuoka Prefecture to Kanazawa due to concerns about a possible Tokai earthquake. The company’s main office is in Tokyo.

According to one business consultant interviewed by the newspaper, there are two types of companies that are using the shinkansen as a reason for moving at least some of their operations out of the capital: those worried about catastrophe, and companies that originated in the Hokuriku region, moved to the Tokyo area after the war during the great economic growth period, and now think it’s time to move back. In terms of the kind of decentralization that the government wants to facilitate, these are halfway measures: the companies who are moving are only moving part of their functions, and are doing so because the new shinkansen makes it possible. As a strategy for reviving regional capitals, it is probably more sustainable than focusing on tourism, though, as one expert pointed out, there are also disadvantages for local businesses. Now that the shinkansen makes it possible to get to and from the capital in a little over two hours, business trips from Tokyo can be undertaken as day excursions, meaning business travelers can go and return within the day, obviating the need for overnight accommodations and attendant expenses. That happened a long time ago in Nagoya when the Nozomi super express opened, and also happened in Morioka after the Tohoku Shinkansen arrived. Hotels and inns in the center of both cities lost customers and many went out of business. And Gucci, the economist referenced in the column, mentioned another effect of express train service on local businesses. Higer income people in these regional cities can now get to Tokyo quickly, and will do a lot more shopping in the capital than they do in their home towns since Tokyo is so easy to access.

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