Fukuoka GrowthGrowth Potential of Fukuoka City

17 Going Forward（Version1.0）

Fukuoka Asian Urban Research Center
Information & Strategy Office
Taichi GOTO
Naohisa HATAKEYAMA
Misato YAMADALast words from the editor
Fukuoka is determined to grow in a sustainable way in the rapidly changing world.
•There have been many positives news in Japan and Kyushu, such that: Mt. Fuji named World Heritage site; Tokyo waschosen to host the 2020 Olympic and Paralympics Games, and; “Seven Stars in Kyushu” cruise train started operation.
•On the other hand, there have been increasing uncertainty such as; political instability in East Asia, Middle East or Central
Asia; frequent natural disasters, and; uncertain prospect in national and global economy.
•Fukuoka City, whose population exceeded 1.5 million, has steadily moved ahead toward sustainable growth by; adopting
the new Master Plan; being designated as a “Global MICE Strategic City” by the National Tourism Agency, and; applying
for the “National Strategic Economic Growth Areas.”
More important becomes communication based upon regular monitoring of the city.
•As changes in society have been increasingly faster and larger, growth strategy of a city should be frequently revised
based upon regular assessment of its progress.
•Monitoring of a city has therefore become more important, as a base for policy communication among a variety of
stakeholders of Fukuoka.
“Fukuoka Facts” is a good tool for such communication.
•“Fukuoka Facts - Data about the Best of Fukuoka –” http://facts.city.fukuoka.lg.jp/en/•“Fukuoka Growth” has provided integral contents for the “Fukuoka Facts”, while creative communication designers haveprovided excellent user interface.
•“Fukuoka Facts” was honorably received the Microsoft Japan Award by the “Open Data Distribution PromotionConsortium” as an excellent initiative of city sales through utilizing public statistic data.
This 17th edition of “Fukuoka Growth” is the final number.
•“Fukuoka Growth” has been published since June 2013 at approximately every two weeks, aiming to help the region
clearly position itself on the global map.
•We are very grateful for our readers and contributors.
•We would appreciate your continuing interest in Fukuoka and support for the Fukuoka Asian Urban Research Center.
•
From April, we are going to publish and provide the information in an improved format regularly.
“’Fukuoka Growth’ book” is going to be published.
•
We are going to publish a book containing reedited and rearranged contents of “Fukuoka Growth” we have published. Itpoints out growth potential of Fukuoka City with data, and will be written in both Japanese and English.
•We hope the book will help introducing charms and growth potential of Fukuoka City as a tool of city sales to other cities
in Japan and in the world.
•The detail about the publishing book will be announced on our website shortly.
March 17, 2014
Taichi GOTO
Head of Information and Strategy Office
Fukuoka Asian Urban Research Center

Growth Strategy of the Fukuoka Directive Council (Fukuoka D.C.).
FG17-002

Source: Fukuoka D.C. http://www.fukuoka-dc.jpn.com/?lang=en.

Fukuoka City proposal for “Global Startup National Strategic Economic Growth Areas”.
FG17-003

Concept: to re-build Japan with a society to support challenges of startups generating employment.

1. What is a startup generating employment?
1) Consequences

2) The present condition(1) Expand employment.
(2) Establishing business,
Business expansion.
(3) Generation of- Entry rate is lower than exit rate.
- Economic Growth- Improved LifeCountryJapanUSAUKBusiness Entry Rate
approx. 4%
approx. 10%
approx. 12%

Business Exit Rate
approx. 4.5%
approx. 9.7%
approx. 9.5%

diversified work style.

Low Business Entry Rate

Young companies create
employment

Company Age

Regular Employment Growth (million ppl.)

Change in number of regular
employees (2001-2006)

Business Entry Rate
(USA, UK, Japan)

3) The problem
Phase 1: Considering establishment(1) Low Motivation and Skills- Rate of people consider themselves to have skillsof establishing business is 15.2% (The 2nd lowest
among 42 countries)

Phase 2: Establishing(2) Weak Environment (Procedure, Cost, Employment)- Establishing procedure under regulations
Country

Number of steps

JapanUSA
Korea

865Duration ofprocedures
23 days
6 days7 daysPhase 3: Growing(3) Weak Investment Environment
Amount of Venture capital Investment- Smaller than one thirtieth of EU, smaller
than one tenth of USA

Source: Kyoji FUKAO, Hyeog Ug KWON, “日本経済再生の原動力を求めて(Looking for motive force of Japan’s economic reform)”(4) Slow Globalization- Overseas network is necessary

Source: Fukuoka City and Fukuoka Directive Council(Fukuoka D.C.). “Summary of proposal for ‘Global Startup National Strategic Economic Growth Areas’” (2013). URC translates and edits the originalformat of proposal presentation.

Fukuoka City proposal for “Global Startup National Strategic Economic Growth Areas”.
2. Why is the business entry rate in Fukuoka City the highest in Japan?
Phase 1

Reason 1: Rich in human resources suitable for startups Rich in human resources- Population growth rate: No.1
- Youth population rate: No.1
- Young female rate: No.1
- Student ratio: No.2
 Rich in science students andforeign students

FG17-004

Phase 3

Reason 3: Business environment linked to the world

1.6 million

120 million
1.3 million

20002030

110 million

Phase 2

Reason 2: Business cost easy to start business Office rent(YEN)

Fukuoka Fukuoka Airport: international air route service with 18 cities
 Hakata Port: No.1 international passengers for 20 consecutive years

TokyoSingapore
Hong Kong No.1 easy city to live in, 95% of Citizen satisfaction
 Rich in natural environment and short commute time Accumulation of urban function and wide-area transportation
function](below figure)
Hakata International Port

Convention Zone

Hakata Japan Rail Station

 Number of international meetings: No.2 in Japan Education: International schools, seminars forforeigners at municipal schools
 Medical: Approx. 260 medical institutions in the city
support foreign languages
 UN-Habitat: recommends Fukuoka City as a modelof livable million city

Fukuoka Airport

Tenjin CBDWithin a 2.5‐kilometerradiusSource: Fukuoka City and Fukuoka Directive Council(Fukuoka D.C.). “Summary of proposal for ‘Global Startup National Strategic Economic Growth Areas’” (2013). URC translates and edits the originalformat of proposal presentation.

Fukuoka City proposal for “Global Startup National Strategic Economic Growth Areas”.
FG17-005

3. Recent initiatives in Fukuoka City.
Fukuoka Directive Council (Fukuoka D.C.)

Private businesses

Fukuoka City

Fukuoka D.C. has already been
looking into growth strategy byindustry-academic-government
collaboration for 3 years.

Increasing opportunities of private
investments in Fukuoka City.

Fukuoka City has been promoting
the city as a startup city.

 The largest venture capital in history

 Declared as “Startup City Fukuoka”

 Opportunities of investment in Established a section called “Startup

 Think-and-do tank: invested byindustry, academic, andgovernment Target: GRP increase of 2.8 trillion
YEN, Employment increase of 60

MICE cluster from overseas
 Locating a base to keep eye on Asia

Supporters”
 Co-established “Startup CityCouncil” with other cities andprefectures

thousand people Project: MICE, Human resources,
Urban redevelopment

Source: Fukuoka City and Fukuoka Directive Council(Fukuoka D.C.). “Summary of proposal for ‘Global Startup National Strategic Economic Growth Areas’” (2013). URC translates and edits the originalformat of proposal presentation.

Fukuoka City proposal for “Global Startup National Strategic Economic Growth Areas”.
FG17-006

4. Projects aiming for realization.
Aiming for Japan to be a country supports challenges of startups generating employment to expand to the world.

How?
 By encouraging people to startbusiness and train companies togrow.

 By linking trained companies to theworld with utilizing the MICEindustry.

Let business grow in the business-friendly
city, Fukuoka

Utilize MICE (Meetings, incentive tours,conventions/conferences,exhibitions/events) held a number oftimes in Fukuoka City.

Project 1
 To improve
entrepreneurshipand skills
 To increase thenumber ofgrowingbusinesses

Aiming for…

(Key Performance Indicators)

Project 2
 To focus on
strategic sectors

Project 3
 To improve MICE
environment withprivate fundLevel of10%(currently 4.5%)

Possible to achieve because Fukuoka Cityacts as the center of Startup City Council.

Project 4
 To createbusiness
matching onMICE

Japan Revitalization Strategy

Entry rate:
Exit rate: By expanding this initiative all overJapan.

Fukuoka CityEntry rate:

Project 5
 To collaborate
with other cities
and economic
organizations

No.1 in Japan!

20%(twice the target of nation)(currently 6.4%)

Source: Fukuoka City and Fukuoka Directive Council(Fukuoka D.C.). “Summary of proposal for ‘Global Startup National Strategic Economic Growth Areas’” (2013). URC translates and edits the originalformat of proposal presentation.

Fukuoka City proposal for “Global Startup National Strategic Economic Growth Areas”.
Scheme for each phase and Projects

FG17-007

Entry rate: 14% increase

1. Scheme for each phase

Generating Employment Creative sector
30,000 pers.
in strategic sectors
Healthcare sector
70,000 pers.
(during the coming 10 years) Food related sector 150,000 pers.

Business Entry Phase

Phase1: Considering establishment

Phase2: Establishing

Phase3: Growing

Contribution to the target

Entry rate Growth by 7%

Entry rate Growth by 7%

Employmnet Increase 500 thousand people(during the coming 10 years)

Previous Initiatives

National Strategic Special Zones(number corresponding toprojects on following pages)

・MICE
・Global environment

JapanFukuoka City
●Business educational●"Increase Startups"Smalland Medium Enterpriseprogram for junior highschoo, high-school,
Charter approved
university students●Declaration of "Startup
City FUKUOKA"①Fermentation of①Reconsideration ofentrepreneurship on
entrepreneur individual
potential entrepreneurs
bond systemsuch as university students
and females①⑤Entrepreneurial
training program forelementary, junior highschool, and high school
students⑤Remodeling of Japan byCities AllianceJapan●Financing●Exception for StockOption system●Angel tax system●Maintaining the stock
market①Reduction of corporate
tax during the limited
period of starting①Reduction of corporate
tax for venture investment①Exception of municipal
order system①Global education④Opportunities ofexchange and encounterswith foreign humanresources, culture andtechnology by MICE

③Exception of MICE
facilities development
support③Easing of Aviation Law
by area③④Preferential measureon utilizing outdoor space③④Preferential measureon issuance of visas③Preferential measure ofemigration andimmigration, and customs③Easing casino businesson cruise ships②Easing regulation for
medical activity by foreign
doctors (clinical trial)

Utilize rich humanresources including
young people!

Japan
Fukuoka City
Fukuoka City
●Incubation program●Step-up subsidy●Removal of minimum●Management consulting capitalization requirements programservice●Trial order authorization●Startup subsidy●Loan system●Loaningprogram●Establishing preparation●Establishing "Startup
seminars
Supporters"①Enhancement of①Prompt process of①Financial support
consultation service on
business establishment①Collaboration withbusiness establishment
procedures
private investment fundprocedures①Easing of requirements ①Utilize startup business①Expanding collaborative for resident status
on municipal projects①Easing of dismissal
incubation with private
regulation
sectors①Improvement of loansystem①Development of safety
net for retry①Business matching bycollaboration between
cities①Easing of school①Development of livable ①Easing visa requirements ③Development of MICE
authorization withcity even for non-Japanese for human resources ofcluster utilizing private
International Baccalaureate speakers
overseas companies andinvestment
requirements under School ④Absorption of know-how their family④Matching or Innovationand network by matching ①Easing regulation forby development of MICE
Education Law
domestic companies and medical activity by foreign innovation generating
systemhuman resources in MICE doctors under a certain
businessrule④Provide place for pilot
experiment as one-stop
service

Fully utilize livable andbusiness-friendly city!

Utilize upward
investment opportunities
and MICE business linked
to the world!

Source: Fukuoka City and Fukuoka Directive Council(Fukuoka D.C.). “Summary of proposal for ‘Global Startup National Strategic Economic Growth Areas’” (2013). URC translates and edits the originalformat of proposal presentation.

Fukuoka City proposal for “Global Startup National Strategic Economic Growth Areas”.
Projects making the full use of Fukuoka’s advantage

FG17-008①Generation of startup business or new projects succeeding overseas
In order to generate startup businesses that succeedoverseas and tow Japan or new projects that bring innovation
to the economic society, Fukuoka provide a combination ofsupport such as collaboration with private investment fund,tax benefits, exception of order system from municipality.
Declaration of "Startup City FUKUOKA"②Promotion of strategic sectors(Creative, Healthcare, Food)
In order to promote startup business in growing
sectors, Fukuoka not only promotes community
formation for each sector and industry-academicgovernment collaboration but also plans to form a
training base for entrepreneurs and effectively utilize
highly-skilled overseas professionals.

③Preferential measure for development and opening to thepublic of a prominent MICE cluster in Asia
Fukuoka develops a complex of facilities such as convention
center, hotel, cruise ship (with casino), museum, andincubation facility by utilizing private fund. Fukuoka opens
road space to MICE business and also supports ITtechnologies utilizing open data.

Creative, Healthcare, Food

Convention centers, Hotels, Cruise ships, Museums, Nightclubs

Source: Fukuoka City and Fukuoka Directive Council(Fukuoka D.C.). “Summary of proposal for ‘Global Startup National Strategic Economic Growth Areas’” (2013). URC translates and edits the originalformat of proposal presentation.

Fukuoka City proposal for “Global Startup National Strategic Economic Growth Areas”.
Projects making the full use of Fukuoka’s advantage

FG17-009④The first in Japan! Development of MICE innovation generating system,and preparation of environment to attract and implement pilot experiments• Fukuoka strategically attracts MICE business, develops aplatform to secure and accumulate highly-skilled domestic
and overseas professionals, and prepares ancommunication hub to enhance business matching andinnovation.
• In order to develop a product, Fukuoka prepares anenvironment to attract pilot experiments or support pilot
implementation.

Pilot experiment(Smart Mobility Asia)⑤Remodel of Japan by Cities Alliance, aiming for Japan wherestartups are highly evaluatedFukuoka plans to remodel Japan where cities actively
involved in developing a “Startup City” are collaborating withthe economic circles, training human resources, making
business matching, which leads new companies to begenerated one after another.
“Startup City Council”
From Fukuoka to the whole country

Source: Fukuoka City and Fukuoka Directive Council(Fukuoka D.C.). “Summary of proposal for ‘Global Startup National Strategic Economic Growth Areas’” (2013). URC translates and edits the originalformat of proposal presentation.