SHIRAHAMA, Wakayama -- A leading resort town in western Japan is attracting more attention as an alternative to working urban areas as the pandemic has triggered the nationwide spread of telecommuting.
In recent years, information technology companies have been moving to Shirahama, Wakayama Prefecture, one after another, and the locals expect that the town will become an IT-centric city like Silicon Valley in the United States.
--Major firms and start-ups
The logos of the tenant companies Salesforce.com Co. and NEC Solution Innovators appear on an office building overlooking the blue sea. Most of these tenant companies are based in Tokyo.
At present, the municipal government operates two such office buildings for the companies it has invited. Ten companies, mainly those related to IT and ranging from major corporations to start-ups, have facilities such as satellite offices in those buildings.
Because both buildings are already at maximum capacity, the town is scheduled to open a new seven-room office building this autumn, through the aid of private capital.
Shirahama is located in the southern part of the Kii Peninsula and is a major resort town that sees about 3.5 million visitors a year. It is a tourism resource-rich area with attractions such as the 620-meter-long Shirarahama beach, the 1,400-year-old open-air hot spring Saki no Yu, and Adventure World, a theme park currently raising a family of pandas. It is a highly regarded tourist destination, both domestically and abroad.
While the location of the resort area is a key selling point for companies, there are other appealing factors as well such as a network environment that allows connectivity even in the event of disasters and rent for office space being about a fifth of those found in the Tokyo metropolitan area. A further selling point is the convenience of traveling between Nanki-Shirahama Airport and Haneda Airport in Tokyo, which are only an hour apart.
The novel coronavirus outbreak has led to a growing interest in living away from densely populated urban areas and instead moving to rural areas surrounded by nature, and the town government said it has been receiving an increasing number of inquiries regarding the opening of offices.
--History of vacancies
In fact, there is a long history of attempts to attract IT companies to the town, including a long period with poor results that may be reasoned as the town government being too far ahead of the times.
Wakayama prefectural government began to attract IT companies to the prefecture in fiscal 2001, recognizing the industry's potential and aiming to create jobs and keep young people from leaving the prefecture. The prefectural government offered generous support, including subsidies for office rent and flights to Tokyo.
Shirahama town government bought a recreational center from an insurance company in 2004 for 110 million yen and renovated it into a six-room office building to lure companies.
However, these companies did not stay for long, and vacancies within the office buildings continued. However, the Great East Japan Earthquake in 2011 caused this situation to change. Concerns over disaster risks drove an increasing number of companies to consider decentralizing their offices.
A company began renting office space in the sole building in 2014, and in 2015, the Japanese subsidiary of major U.S. IT company Salesforce.com, which had participated in the planning of the Internal Affairs and Communications Ministry's verifying experiments for telework diffusion, also established an office there as well. This became a hot topic in Japan and the following year, the building's office space was filled.
The second office building with room for four offices was established in 2018 and was filled within four months.
--Effects and expectations
According to a survey conducted by Salesforce.com conducted 1-1/2 years following the opening of its Shirahama office, the number of business negotiations conducted per person was 20% higher on average per month than in Tokyo.
Takao Yoshino, 46, head of the Shirahama office, said, "The rich natural environment created a sense of relaxation and increased productivity."
Exchanges between companies in the town are also progressing, which locals expect will lead to new business opportunities. The local community is also moving forward with the adoption of ICT in endeavors such as experiments with a face recognition system being conducted at the airport and hotels.
The goal is to create a Japanese version of Silicon Valley, and the Wakayama prefectural government also hopes this will come to fruition.
Yushi Sakano, a prefectural official, said, "The time is now, when more and more companies are questioning the way they work in urban areas amid the pandemic."
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