Arya News - The development of plans tailored to specific regions is moving ahead, and, as of Sunday, 49 industrial cluster projects had been selected.
TOKYO – Efforts are underway to form industrial clusters that harness a region’s advanced technologies and local resources, in line with the “Strategy for the Future of Regions” approved by the government in July to help reinvigorate regional areas.
The development of plans tailored to specific regions is moving ahead and, as of Sunday, 49 industrial cluster projects had been selected. The government will support the development of human resources and the construction of necessary facilities by locking in multiyear budgets, while also calling for private investment in these regions.
Two huge factories operated by flash memory manufacturer Kioxia Iwate Corp. stand near the Kitakami River in Kitakami, central Iwate Prefecture. The area surrounding these eye-catching buildings is home to more than 100 semiconductor-related companies.
In July, the government decided to establish the Tohoku region’s artificial intelligence and semiconductor industrial cluster in the area, becoming the first Type A strategic industry cluster plan, which aim for the creation of an industry ecosystem.
This plan calls for about ¥1.27 trillion in public and private capital investment by 2040, and is expected to generate about ¥5.66 trillion in added value. “This is a chance to pull in investment on an unprecedented scale,” an Iwate prefectural government official said.
The prefectural government has attempted to attract semiconductor-related industries since the first Kioxia Iwate factory opened in 2020. However, the difficulty in drawing up medium- and long-term forecasts meant that companies would be taking a big risk by setting up in the region. Being selected under a government-led plan, however, locks in assistance for facilities and other support spanning multiple years.
“This has created the conditions in which companies can move ahead with long-term investments,” a senior prefectural government official said.
The prefectural government has been working on the expansion of the water treatment plant in Kitakami to ensure a stable supply of water for industrial use. The central government plans to directly support the construction of such infrastructure from next fiscal year. The nurturing of human resources will also receive assistance, with the prefectural government planning to set up a training facility in Kitakami for highly skilled personnel capable of handling physical AI – artificial intelligence systems that operate in and interact with the physical world, such as through robots.
Revitalizing shipbuilding industry
Under the strategic industry cluster plan, large-scale investments will be poured into the “17 strategic fields” designated by the administration of Prime Minister Sanae Takaichi. The building of next-generation ships in and around the Seto Inland Sea fits into one of those fields. These ships will be powered by liquified natural gas or hydrogen.
Japan previously was a shipbuilding powerhouse, but in recent years it has been overshadowed by Chinese and South Korean competitors. The government aims to revitalize the nation’s shipbuilding industry in the interest of economic security and has set a goal of doubling domestic annual shipbuilding output by 2035.
Ehime Prefecture accounted for 19.7% of domestic shipbuilding tonnage in fiscal 2023. A representative of the Imabari Chamber of Commerce and Industry in the prefecture welcomed the plan that would “lift the industry overall,” but warned that doubling output within 10 years “won’t be easy.” Many shipbuilders in Imabari are located along the coast and have large hills looming behind their facilities, so expanding operations will be very challenging.
“We’d like the central government to help secure land the industry can use and train the workers that will be needed,” an Imabari city government official said.
Preserving traditional methods
In addition to the Type A strategic industry cluster plans spearheaded by the central government, the strategy also features Type B prefecture-led regional industry cluster plans and Type C local industry growth plans drawn up mainly by city, town and village governments.
In July, the cutlery industry in Tsubame, Niigata Prefecture, was chosen under a Type C plan. Knives, forks and other cutlery made in the city using traditional metalworking techniques accumulated and honed since the Edo period (1603-1867) account for about 90% of domestically produced cutlery. However, maintaining the division of labor in this process has become more difficult due to the aging of the craftsmen involved and as some operators close down.
Under the plan, local operators will share the manufacturing process and promote cutlery brands. Constructing factories that will be jointly used is being considered, and the plan aims to enhance the city’s brand power to distinguish locally made cutlery from cheaper products made overseas.
“The industry’s financial strength has been struggling since the COVID-19 pandemic,” said an official of Tsubame Bussan Co., a company that has been making cutlery since 1911. “It will take time for our business to flourish, but I hope the government will provide continuous support.”