Comprehension 5

Read the following passage very carefully, and answer the five questions given at its end.

Sandwiched between the mountains and the sea in Japan’s far-west corner, Fukuoka is a city trying to reinvent itself. In a land long dominated by mega-conglomerates and the inexorable pull of Tokyo, the country’s fastest growing urban centre wants to become Japan’s answer to Silicon Valley.

Despite the country’s reputation for hi-tech wizardry, Japan’s start-up scene remains surprisingly stunted. The world’s third largest economy has only one “unicorn” – a private company valued at over $1bn – compared to the United States’ 127 and China’s 78.

Fukuoka’s charismatic young mayor is determined to change that, and he’s convinced the city has the ingredients to replicate the success of the US’s west coast innovation hubs. In 2011 he declared Fukuoka would become Japan’s start-up city, and since then it’s risen to the top of the country’s business creation league tables.

Whether it can truly rival the capital remains to be seen as funding and talent continues to concentrate in Tokyo, but the city’s leaders have a convincing pitch. A tight-knit start-up community, a young workforce and an affordable city that promises that elusive goal of a work-life balance – something they hope will appeal to a new generation of entrepreneurs keen to avoid the Tokyo rat race.

 

Shortly after being elected as the city’s youngest ever mayor in 2010, former TV presenter Sōichirō Takashima, 44, visited Seattle and was struck by the similarities to his hometown. Both are compact coastal cities surrounded by nature, with well-developed transport infrastructure and plentiful human resources, he says. In Seattle those ingredients support titans like Amazon and Microsoft, as well as a thriving start-up ecosystem. Takashima believes Fukuoka can replicate that success and help drag the Japanese economy out of a rut it’s been in since the early 1990s.

“The presence of start-ups which create new innovation and value is necessary to break economic stagnation,” he says. “With that in mind, I positioned start-up support as our city’s growth strategy.”

Since then he’s been busy. In 2014 the central government granted his request to designate the city as a “national strategic special zone” for start-ups, which has allowed them to cut corporate taxes for new businesses and create a special visa for foreign entrepreneurs. It’s also allowed them to relax planning rules so they can redevelop the city centre and wireless regulations to create a faster and simpler licensing process for experiments and technology demonstrations aimed at the Internet of Things (IoT), which embeds sensors, communication and computing hardware into everyday objects.

Takashima has also been aggressively promoting the city at home and abroad, leading business delegations and signing cooperation deals with start-up hubs like San Francisco, Taipei and Helsinki which provide support and introductions for Fukuoka start-ups looking to expand abroad or foreign start-ups looking to enter Japan.

Back in Fukuoka, the government has renovated an old school in the central Tenjin business district to create Fukuoka Growth Next (FGN), a one-stop shop for budding entrepreneurs which opened in 2017. “Simply put, our mission is to raise future unicorns,” says Yasunari Tanaka, director-general of the FGN secretariat.

Facilities include discounted office space, a prototyping lab, a start-up cafe where consultants provide free business, legal and accounting advice, and the Global Startup Centre to help foreign founders set up in Fukuoka or local entrepreneurs expand abroad. There’s also a bar to lubricate the networking process and a regular schedule of talks, seminars and matching events to link start-ups with customers and investors.

While the city’s first unicorn is probably still some way off, there’s been encouraging progress. The initial goal for FGN was for tenants to raise 500m yen (£3.37m) by September 2018, but they smashed that target, raising 7.1bn yen (around £50m). Fukuoka also has the highest new business creation rate (the percentage of companies newly registered in a year) in the country at 7%, well above Tokyo’s 4%.

The city has some strong fundamentals in its favour. Japan’s ageing population and shrinking workforce are causing politicians and economists sleepless nights, but Fukuoka is the fastest growing city in the country, and has the highest proportion of young people. Rent is about 60% of that in Tokyo and the city is closer to Seoul and Shanghai than the capital, leading it to be seen as Japan’s “gateway to Asia”.

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Comprehension questions ..

  1. How does the new mayor of the Japanese city Fukuoka plan to transform it ?
  2. What difficulties the young mayor faces in transforming his city to a thriving tech city, and how does he plan to solve them?
  3. What lessons did he learn from his visit to Seattle?
  4. What specific steps has the mayor taken to transform the central business district, Tenjin, to a bustling start-up hub?
  5. What inherent advantages Fukuoka has over Tokyo with regard to being a business-friendly place?

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ANSWERS …

Q1. The new mayor of Fukuoka intends to transform his city to a novel start-up hub where tech workers can enjoy the beauty of the mountains and sea close by. It will thus provide ideal recreation after long and hectic work in the office.

Q2. The city is still not in the radar of tech investors. Besides this, it lacks even a rudimentary technology base on which new companies can be built. Every one seems to head to Tokyo that has everything going for it. Weaning the investors and tech man power away from Tokyo is a challenge for the new mayor.

Q3.  Seattle is home to scores of technology behemoths like Amazon, Microsoft etc. It is also located beside the sea offering it the luxury of a long sea beach. Both Fukukoa and Seattle have good transport systems, and human resources. So, the new mayor feels that with some dedicated effort, Fukukoa can be developed along the lines of Seattle.

Q4.  The mayor has got the government to open a facility named Fukukoa Growth Next (FGN). It is an one-stop window for expediting investment ideas by cutting through procedural delays. The prospective companies are offered office space in discounted rates, a prototype lab, and a cafe where consultants provide free access to legal, and accounting advice. There is a bar that becomes a meeting place. Seminars are held regularly to apprise the incoming companies about procedures for starting shop.

Q5. The city’s young population standing at 60% is way above that of Tokyo, where there are too many old retired people, and too less young working young men. This leads to acute man power shortage. Besides this, Fukukoa is much closer to Seoul compared to Tokyo. This proximity to the bustling South Korean capital gives Fukukoa a great advantage.

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