The Future of Kansai’s Regional Economy

Public Relations Office        February 9, 2018

Takuji Okuno Professor, School of Sociology, Director of Institute for Advanced Social Research (Cool Japan, Japanese culture, media, birds, and animation)

Takuji Okuno Professor

The strength of the Kansai region is its diverse regional culture, which originated from a mix of influences from Kyoto, Osaka, Kobe and the Hanshin area. It is distinctly different from the Kanto region, where the influence of Tokyo has spread beyond the prefectural boundaries.
In the Kansai region, the Kinai culture was first born in Kyoto, and then the Kamigata culture thrived in and around Settsu, Osaka, in early modern times. Contemporary culture was born in the Hanshin area, and affected by Western culture. However, in each era, these different types of cultures were not totally independent from each other. They were somewhat segregated, yet interrelated at the same time.
Ito Jakuchu, a painter active in Kyoto in the Edo period, was highly appreciated for his detailed paintings of roosters and hens. However, the roosters and hens he painted were not native to Japan. They were figments of his imagination, inspired by a mosaic of domestic and foreign species. How, then, could he observe foreign breeds when the country was isolated from the rest of the world?
He could not do it without Kimura Kenkado, an Osaka merchant who was famous as a collector. At the time, there was a network of naturalists (botanists) and painters in the Kamigata, centered on Kenkado. Jakuchu also joined the network. It was said that some of the roosters and hens he painted were provided by Kenkado. What was marvelous about Jakuchu was that he mixed them to create his own roosters and hens, which look even more real than real life birds.
How did Kenkado get the foreign breeds? This was largely attributed to the trade flows through the Seto Inland Sea and Kansai’s rivers. The products of foreign cultures imported through Ryukyu and Satsuma were transported by kitamae-bune cargo ships and other vessels to the ports of Hyogonotsu, Amagasaki and Osaka via the Inland Sea. Some of them fell into the hands of Kenkado, who used various channels to collect rare goods.
Thus, the Kansai region’s culture was created not by bureaucrats or samurai elites, but by townspeople and commoners. More importantly, the Kansai region was directly connected with foreign cultures (without using Edo and Tokyo as an intermediary).
The same went for the Hanshin area in the modern times. Ichizo Kobayashi, the founder of Hankyu Railway, promoted community development centered on railway stations by fusing aspects of traditional local culture, such as Kamigata Kabuki and Omi’s business practices, with aspects of Western and Christian culture. Keizo Saji, the former President of Suntory, also combined the sake brewery culture of Nada and Fushimi with the bar culture of Western countries. The cultural industries of the Kansai region were therefore created by entrepreneurs who were well-versed in these sorts of pastimes.
We should carry on the endeavors and ideas of our forerunners by combining the diverse tourism and entertainment resources of Kyoto, Osaka, Kobe, and the Hanshin area with innovative technologies such as artificial intelligence (AI), autonomous driving technology and life sciences to create new industries, unique to Kansai, and promote them globally for the future of the region.

Nobuo Kobayashi Professor, School of Economics (Industrial clusters, small and medium enterprises, analysis of critical factors for start-ups and growing businesses)

Nobuo Kobayashi Professor

Elderly people and railway lovers may know the Business Express Kodama, which ran between Tokyo and Osaka in the late 1950s. It connected the two cities in six hours and 50 minutes, an amazing speed for the time. The train left Tokyo at 7 AM and arrived in Osaka at 1:50 PM. After a brief business meeting, you could catch a train leaving Osaka at 4 PM and come back to Tokyo at 10:50 PM. You could have a two-hour meeting in Osaka and get back to Tokyo in a day, if you didn’t mind making a 14-hour round trip journey. It was an overwhelmingly long trip, but it was groundbreaking for the time.
As represented by this example, it then took a long time to travel between Japan’s two largest cities, which served as the centers of Eastern and Western Japan. Therefore, many of the large Japanese companies maintained two main offices, one in Tokyo and one in Osaka, to manage their businesses in the eastern and western regions, respectively. Nevertheless, Kansai’s regional economy has undergone a relative decline in recent years. This dynamic was mainly caused by advances in transportation systems; since we can travel much further in one day, the importance of keeping two head offices in the east and west has decreased, and this spatial dynamic is quite difficult to resist.
At the same time, however, this does not mean that all the provincial areas have lost the ability to invigorate their local economies. For example, the Chukyo area, centered on Aichi Prefecture, has developed a relatively powerful economic presence. This is because its industrial clusters, with the automobile industry at the top, have brought international competitiveness to the region. A really competitive industry can form a virtuous cycle by developing the local area as a global hub, attracting competent human resources, and, in turn, further promoting advanced research and development.
However, we should not have an overly optimistic outlook for what the future holds if we win the bid to host the World Expo, which is like counting your chickens before they’ve hatched. Even if it happens, it will only be a temporary stimulus to the Kansai economy. What is most needed to revive the regional economy is to strive for constant innovation, and create next-generation key industries by fostering an innovation-friendly environment. The development of transportation networks has been forming a “spiky” multi-polar structure, where a few creative regional economies will lead the world. The
Kansai region is now being put to the test as to whether or not it can become a forerunner within that structure.