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Latest UpdatesWakayama Prefecture: Investment Promotion Seminar for Attracting IT Companies -Global IT companies setting up in Japanese resort town Shirahama-

May 09, 2018

In February 2018, Wakayama Prefecture held the "Wakayama Prefecture: Investment Promotion Seminar for attracting IT Companies" at the IBSC Hall of JETRO Tokyo. In addition to spotlighting the business environment, incentives and the living environment blessed with beautiful nature of the Tanabe-Shirahama area (Kinan region) of the prefecture, the seminar also promoted the IT business environment of the prefecture by introducing cases of foreign and domestic companies that have set up offices in the region.

Investment environment in Wakayama

Wakayama Prefecture has made earnest efforts at attracting companies in order to revitalize local industry. In addition to one of Japan’s top incentive systems, they have introduced one-stop services to speed up procedures required for starting business in the prefecture. Excellent transport access between Kansai International Airport and Nanki Shirahama Airport, as well as the one-hour flight time between Nanki Shirahama and Haneda Airport in Tokyo, is also part of the attractiveness of the prefecture.
JETRO Wakayama was established in October 2017 and has been working together with the prefectural government to attract companies stimulate growth in the region.

Shirahama beach

IT business environment in Wakayama

Currently, as part of the "Furusato Telework Business in Wakayama Prefecture1” initiative, Wakayama has particularly focused on inviting the satellite office of IT companies located in the greater Tokyo area. Shirahama Town acquired a building that was originally a recreational facility of a private company and renovated it as an IT business office, where a second building was developed on an adjacent lot in FY2017. In addition to the individual offices, this new facility also provides co-working spaces2 in order to encourage interaction among the tenant companies as well as to improve the business environment. In addition to Salesforce. Com, Ltd., a foreign-affiliated company with headquarters in San Francisco, the US, there are 11 other IT companies that have expanded into Wakayama, such as V-cube, Inc. and NEC Solution Innovators, Ltd. This number is expected to increase in the near future. The prefecture is also focusing on the development of the telecommunications environment. It has established a network resistant to interruptions in the event of disasters through the National Institute of Information and Communications Technology, installed over 1,500 Wi-Fi spots throughout the prefecture, increasing the total from 21 spots within a year, and has succeeded in providing an ultra-high speed broadband including optical fiber coverage rate of 99.4%.
Furthermore, they are striving to improve IT literacy throughout the prefecture, such as by fostering corporate IT human resources and introducing programming classes into school education.

*1 A program to realize an environment in which work in rural areas can be done as easily as in big cities and to promote the flow of people and jobs to the local area. "Telework" is a word coined from "tele" which means "at a distance", and "work".
The Ministry of Internal Affairs and Communications is promoting the reform of work through teleworking.
*2 A co-working space is an environment in which companies work independently while sharing office space and meeting rooms.
Business is conducted in an open space rather than in private rooms. Unlike a share office or rental office, it tends to emphasize the development of a community among tenants.

Attractiveness of Wakayama: Improvement of productivity through ideal working environment

Speeches were given by Takeharu Yamanishi, Director General of the Commerce, Industry, Tourism and Labor Department within the Wakayama Prefectural Government; Takashi Ito, Vice President of salesforce.com Co., Ltd., located in Wakayama Prefecture; Naoaki Mashita, Representative Director President and CEO of V-Cube Inc.; and Kazuhiro Sakamoto, Project General Manager of the Shirahama Town General Affairs Division.
In addition to the excellent communications and office environment in Shirahama and the surrounding Nanki region, Mr. Yamanishi talked about lucrative benefit packages offered by the prefecture consisting of a maximum of 300 million yen in subsidies for employment and location. He also presented on the living environment blessed with abundant nature, which has attracted attention from the world as a tourist destination. He referred to "workation3", a concept that balances work and vacation that is growing in popularity in the Western countries but is not yet well known in Japan, and which Wakayama is currently promoting. He mentioned that the companies that have set up satellite offices in the region have improved their productivity by working in harmony with the local community and nature. He wants to see Wakayama Prefecture become a model of "workation" by attracting companies in Shirahama with a resort environment and increasing the number of people who work there.

*3 A word coined from "work" and "vacation," expressing the concept of working while on vacation, such as in a resort area. It is spreading in Western countries as workstyle considered highly productive.

Incentives for information service industry (IT companies)
Types of incentives Method of calculation
Employment subsidies Number of newly hired local employees + new employees who have moved in from other municipalities) x 300,000 yen (applicable for 3 years
Location subsidies

Amount of fixed assets x 30%

* The amount of fixed assets invested in the new location is more than 10 million yen.

Communications subsidies Communications line usage fee x 50%3 years
Office rental subsidies Rent x 50%3 years
Airfare subsidies

Haneda-Nanki Shirahama Airfare x 50%(applicable for 3 years

* 3,000 yen in assistance per trip for the airfare between Haneda and Kansai International Airport.

* Subject to change depending on scale of project and number of employees

Based on handout from "Wakayama Prefecture's Business Environment - Attracting Attention from the World"

Salesforce.com Co., Ltd. is currently encouraging customers to engage in telework, making use of the company's own IT infrastructure. Mr. Ito said, "We are proud to have operated business in Shirahama, with its comfortable living environment, and to have improved productivity by 20% compared to Tokyo.
"Work ends at the regular time, the commuting time is short, and there are a lot of employees who devote that extra time to social contribution and community activities and enjoy work and life freely."
V-cube developed its business based on the concept of "changing Japan through telework." They have collaborated with Wakayama Prefecture and Shirahama Town to help realize the future vision "Beautiful and Passionate Wakayama Connected with the World".
Mr. Mashita suggested the potential of future business development by opening a satellite office in Shirahama.
At the end, Mr. Sakamoto said, "We continue to assist the companies and their staff already settled in the area and help them to feel more at home. For example, we not only provide information on properties but introduce sightseeing spots and popular local establishments to them".

Approximately 50 participants joined the seminar. At the following networking event, participants said they came away with a good understanding of the business environment in Shirahama and that the seminar was helpful for learning the reasons for the development of telework in the prefecture as well as its effectiveness.


Nanki Shirahama


Shirahama office of salesforce.com

Inquiries

JETRO Wakayama
Tel: +81-73-425-7300, E-mail:WAK@jetro.go.jp
Wakayama Prefectural Government Corporate Promotions Division
Tel:+81-73-441-2748, E-mail:e0622001@pref.wakayama.lg.jp

(Written by Invest Japan Promotion Division, Invest Japan Department)