COMPETITIVE CITIES FOR JOBS AND GROWTH CASE STUDY YOKOHAMA REINVENTING THE FUTURE OF A CITY COMPETITIVE CITIES KNOWLEDGE BASE TOKYO DEVELOPMENT LEARNING CENTER October 2017 © 2017 The World Bank Group 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved. This volume is a product of the staff of the World Bank Group. The World Bank Group refers to the member institutions of the World Bank Group: The World Bank (International Bank for Reconstruction and Development); International Finance Corporation (IFC); and Multilater- al Investment Guarantee Agency (MIGA), which are separate and distinct legal entities each organized under its respective Articles of Agreement. We encourage use for educational and non-commercial purposes. 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Contact: World Bank Group Social, Urban, Rural and Resilience Global Practice Tokyo Development Learning Center (TDLC) Program Fukoku Seimei Bldg. 10F, 2-2-2 Uchisaiwai-cho, Chiyoda-ku, Tokyo 100-0011 Japan Phone: +81(3)3597-1333 Fax: +81(3)3597-1311 Web: http://www.jointokyo.org About Tokyo Development Learning Center (TDLC) The Tokyo Development Learning Center (TDLC) program is a partnership of Japan and the World Bank. TDLC supports and facilitates strategic WBG and client country collaboration with select Japanese cities, agencies and partners for joint research, knowledge exchange, capacity building and other activities that develop opportunities to link Japanese and global expertise with specific project-level engagements in developing countries to maximize devel- opment impact. 2 BACKGROUND AND ACKNOWLEDGEMENTS T his research was prepared by the Tokyo Development Learning Center (TDLC) under the auspices of the Social, Urban, Rural, and Resilience Global of the World Bank Group. Its objective is to create a knowledge base on what makes cities competitive, understand job creation at the city level, and capture the unique development experience of Japan for broad dissemination to development practitioners, government officials, academia and the private sector.  The team would like to gratefully acknowledge the  Government of Japan and its continued support of the Tokyo Develop­ment Learning Center (TDLC) program. The research was led jointly by Dan Levine and Megha Mukim. The research team was com- posed of Luke Jordan, Haruka Imoto, Juni Zhu, and Nozomi Murakami. The team gratefully acknowledges the peer reviews and inputs from the following World Bank Group colleagues: Yuko Okazawa, Peter Ellis, Austin Kilroy, Stefano Negri and Jon Kher Kaow.  The team is especially grateful for feedback from Yokohama City Officials, Dr. Nobuharu Suzu- ki (City University of Yokohama), Mr. Kazumasa Doi (Yokohama City alumni) and Yokohama based private companies. 3 4 TABLE OF CONTENTS Introduction  7 Transforming the City: 1963-1978  9 Mayor Asukata and Mr Tamura  9 The Six Big Projects  10 Project Execution  12 Expanding the “Mayor’s Wedge”  13 Evaluation  16 New Cities: 1986-2010  17 Minato Mirai  17 Shin-Yokohama  20 A looming crisis: 2015-  23 Conclusion: A Remarkable, Realistic, Democratic Transformation  25 5 6 INTRODUCTION Y okohama is the second largest and one of the youngest the administration of Japan’s ports, placing Yokohama’s port of Japan’s big cities.1 One of Japan’s first open ports, it authority under the city’s control. During the late 1940s and was founded in the last years of the Shogunate (1859) 1950s, Yokohama rebuilt and its economy recovered, and as a concession to the European powers: close to the largest around 1960 it was the scene of exceptional political turbu- city and heart of power in Tokyo (then Edo), but not in that lence. In response to these years of disruption Prime Minister city itself. Since then its fate has been intertwined with Ikeda declared the then-unprecedented goal of “doubling Tokyo, even as it evolved its own identity. Japan’s railway net- national income in a decade”, and it is said that the people work began with the Tokyo-Yokohama line, financed by the were “looking for a new vision of politics”. Steadily, the port only foreign loan taken out by the Meiji government. From and industry regained their footing, not to say dominance, the late 19th century through the 1930s, Yokohama grew into the rampant growth of Tokyo spilled over into residential Japan’s largest port. Along with Kobe, it became a center of development in the north of Yokohama, and with those came shipbuilding and heavy industry, as well as one of the first pollution, sprawl and congestion. cities in Japan to invest in modern public goods, such as gas- lit street lights and suburban railways. Figure 1. The original Keihin reclamation area Much of this development was led by consortiums of early, developed in the early 1900s dominant industrialists and financiers. The Keihin indus- trial corridor, a strip of land to the north of the harbor and adjoining Kawasaki city, was built by a famous industrial- ist — “the cement king of the Meiji era” — Soichiro Asano (Figure 1). It was funded by the apex bank of a “zaibatsu”, the consortiums that dominated Japan pre-War. That bank, along with interpersonal networks, solved the coordination issues of having enough other investors ready to build factories on the land. By the 1920s, the Keihin strip was a cluster of what were then frontier technology companies, in automobile pro- duction, chemicals and machinery. Its role in Japan’s opening to foreign trade had furnished the city with a range of service industries, such as foreign exchange, trade credit and insur- ance brokers. The city witnessed frequent social and political turbulence, including riots after the Russo-Japanese War and during the post-World War I depression, as well as natural catastrophe with the great earthquake of 1923. During the Second World War, Yokohama and its naval Source: Exhibits from Yokohama Port Museum industries were the target of intense Allied bombing. During the post-War occupation, over half of the city was requisi- The city’s subsequent story might have been foreordained. tioned. A significant allied presence remained into the late Encumbered by vested interests, swamped by a nearby meg- 1950s, many years longer than other Japanese cities. As one acity, constrained by national policy and democratic politics, gain from this period, the Allied occupation decentralized it might have become, at best, a residential satellite of Tokyo, and, at worst, an industrial wasteland on the edge of the capital. Such stories are common, across the developed and 1 “Second largest” including Tokyo. In Japan’s administrative developing world. Sometimes those stories are punctuated by categories, Tokyo is technically a prefecture rather than a mayors with some vision of rejuvenation, who serves a term city, which would make Yokohama the largest “city”. 7 or two, runs into difficulty and opposition, and whose plans That trajectory has not always been smooth. In the 1980s, are overturned in the next administration. Such cases rein- the plan for replacing former shipyards downtown — the force a type of folk wisdom, that constraints are immutable, Minato Mirai 21 precinct — expanded massively in scale and politics are a barrier, and what is needed is a species of hard- scope. When at last ready for occupation in the 1990s, just as charging technocratic leadership liberated from reality and Japan’s bubble was bursting, this “new city”-type project was able to impose a top-down vision. In its absence, the best that unable to attract its forecasted number of tenants for some is possible is a compromised incrementalism. two decades, despite a prime location. Today, after subsidies have attracted some Japanese headquarters of multinational What occurred in Yokohama is quite different. From the corporations and R&D centers, it is home to almost a hun- 1960s onwards, at first through the effort of remarkable dred thousand jobs. Another part of the city, Shin-Yokohama, leaders and the public support and energy they marshalled, around the city’s shinkansen (bullet train) station, received then through the routines and practices they embedded in far less attention, but from the mid-1980s onwards boomed, the administration, the city transformed itself. The port and even as the national economy slumped into the lost decade. heavy industry were removed from the physical and econom- Today it is home to a semiconductor design and distribution ic center of the city and the flood of residential development cluster, although it has to some extent stagnated in the last was not halted but channeled. The city absorbed a massive five years. increase in its population, and repeated waves of technologi- cal change and economic restructuring. The city has changed In common with the rest of Japan, the city faces a demo- from a somewhat exotic port city to a place reputed to have a graphic crisis as its population ages rapidly. Almost 30% of higher quality of life than Tokyo itself. Though tightly inter- its residents will be over 65 by 2030. Along with the fiscal woven with the wider metropolitan economy, it has a distinct burdens this will impose, it poses a risk to the economy. economic structure, one that has increasingly shifted into The founders or owners of the thousands of SMEs that are frontier research and development. its backbone will retire, and many are said to be without succession plans. If it is to harness its considerable strengths to meet its looming crisis, the city will need to catalyze the sense of internal autonomy, self-determination, and ability to turn threats into the strengths of the future that marked its most remarkable decades. 8 TRANSFORMING THE CITY: 1963-1978 Mayor Asukata and Mr Tamura through the collective action of its citizens — a vision of politics as massive citizen engagement in a city that would Hyper-growth, deteriorating environment, techno- choose its own destiny. He promised to hold a “10 000 citizen logical threat. In 1963, Yokohama was a city of 1.5 million convention”, to establish municipal autonomy, and to build people. It was experiencing hyper-growth, its population a city focused on its citizens’ quality of life. Accounts of growing by 100,000 people every year. The concentration Asukata’s campaign indicate that he did not enter office with of heavy industry in the Keihin area generated worsening his plan already pre-determined, with a slate of projects or air pollution, and the rapid, unregulated growth created a policies that would be imposed on the city, but emphasized flood-prone built environment. Within the broader Tokyo the three pillars of deep participation, city autonomy, and metropolitan region, or Kanto region, the city was at risk of quality of life for ordinary people. becoming an amalgam of a marginalized commuter town, polluted center of heavy industry, and port in danger of An eclectic, unique urban planner. Once elected, Asukata obsolescence. That last danger resulted from the looming commissioned Takashi Asada, an eminent advisor of national technological shift of shipping away from bulk handling to and local governments in the post-War decades, to produce a containerization. That would in time benefit the city’s other plan for the city’s future. Asada in turn placed Mr. Akira Tamu- industries, by lowering shipping costs, but in the interim it ra in charge of the project. Tamura’s background was eclectic threatened one of the largest sources of employment in a city but combined a range of fields related to his task — he received with a mushrooming population. three separate Bachelor’s degrees from the University of Tokyo, in law, in politics and in architecture; he worked for several A thin “mayor’s wedge”. Then, and still now, Japanese national ministries (some while studying); and then he joined cities are said to operate under a “70/30” constraint — that a real estate and finance company.2 He was described as a man 70% of decisions are made, or funding allocated, by higher of wide-ranging curiosity, severity with his team members, and levels of government, and only 30% by the city itself. In a deep commitment to urban planning as community building. Yokohama, the constraints were particularly acute: Most of the national members of parliament were allied with the port “Only bad futures” leads to vision of reform. The and industry, as, more generally, was the dominant national exercise that Tamura’s team carried out was devoid of false op- party, the Liberal Democratic Party (LDP). The city assembly, timism. He is said to have remarked that he had considered all likewise, was dominated by members with strong ties to the the possible futures for the city on its then path, and “all were same industries. In this period of Japan’s development, the bad”. Over two years, from 1963 to 1965, he defined six critical largest real estate developers were private railway companies, projects by absorbing several ideas existing in the previous ur- which were busily developing the suburban sprawl, and un- ban plans to “generate the mighty energy to build the ‘skeleton surprisingly had significant sway. The one area where the city and organs’ of the city”.3 At the end, he presented a radical plan had unusual autonomy was the port. A decision by the Allied for how the city could transform itself, centered on the “six occupation authority in the post-War years had removed big projects” described below — believing that a conventional port regulation from the national sphere and decentralized long-term plan would not be sufficient for the city’s challenge. it to multiple, independent, city-level authorities, in theory Mayor Asukata, who had “won him over”,4 then asked him to amenable to municipal influence if not action. join the city and help him execute the plan in 1968. Tamura accepted, and the two would then work together for the next A new, radical mayor. In 1963, the city elected a new 12 years, holding a common vision that citizen participation mayor, Ichio Asukata. Mr Asukata was a prominent mem- should be at the core of public policy-making. ber of the Japan Socialist Party, opponents of the LDP, and had been a prominent opponent of the US-Japan Security 2 (Tamura, 1983) Alliance, a core priority of the national government. Asuka- 3 (Tamura, 1983) ta’s campaign centered on establishing the city’s autonomy 4 (Dimmer, 2012) 9 The Six Big Projects An integrated program made tangible in six projects. The resulting plan centered on the “Six Big Projects”, which Technological threat turned into an opportunity. remain famous in the city today. Those projects were (Figure Tamura saw that the city could only be sustained and trans- 3): formed if the port relocated, and hence became less central i. Downtown transformation: Relocating the port, ship- to the city, economically and physically. At the time, the port yards and small-scale industry, and creating a center for separated the old center of town — known as Kannai — from commercial and cultural activities as an economic driver the new center around the Yokohama railway station, which for the city. had developed post-War while Kannai was under occupation (Figure 2). If the port relocated, the city center could be ii. Kohoku New Town: Providing affordable housing to knitted together into a dense area of services and culture, and absorb rapid population growth, creating a well-serviced the residential suburbs integrated. The advent of containers, living environment for residents well connected to the which would involve larger ships and require new equipment city center. to handle, provided the opportunity to make this move. The iii. Kanazawa reclamation: Creating an industrial zone new equipment and infrastructure could simply be built away with a healthy environment for workers, residents and from the port’s old location. At the same time, if the city were visitors, supported by accessibility to city center through to bridge the bay, the industrial area could be linked to the public transport. new port location without trucks needing to cross the city iv. Subway system: Relocating inefficient tram lines and center, reducing a source of chronic congestion. Combined connecting the city centers and suburbs by a robust pub- with inducing some heavy industry to move southwards, the lic transport network, in particular between residential development of a dense transport network, and regulariza- and commercial/ business areas. tion of residential development, the port and industry could continue to grow dynamically, quarantined from but still v. Bay bridge: Helping segregate logistics traffic for goods connected to a northern area of suburban development and transport, and serving as a monumental icon for the an inner core of commerce and services. waterfront area. vi. Expressway: Forming a trunk road network as the backbone of the city, segregating intra-city traffic and inter-city traffic to ensure efficiency and safety. Figure 2. Kannai, Yokohama Railway Station, and Port Facility/Shipyards in 1961 New Downtown around Yokohama Station Keihin Industrial Area Railway Yard Old Port Facility Ship-Building Yard Old Port Facility Kannai Old Downtown Source: Edited by authors with an image from Geospatial Information Authority of Japan 10 Figure 3. Location Map of the Six Big Projects 1. “Creative government for citizens”: creating a strategic sustainable urban vision focused on citizens and with ii Kohoku New Town “strategic characteristics” 2. “Atypical liquidity”: Transcending vertically segmented ideas through the introduction of previously unusual, whole-city and comprehensive ideas vi Highway Network plan 3. “Big table principle”: Utilizing projects that required a com- prehensive coordination function, information sharing v Bay Bridge Plan and development of human resources Project financing was marshaled from multiple i City Center Enhancement Plan sources. When the projects were announced, it was known that they were beyond the financial reach of the city. Asukata iv Subway Network Plan iii Kanazawa Reclaimed Area Plan and Tamura were, however, confident that the funds could be found with sufficient coalition building, resourcefulness in finding other sources of financing, and citizen backing. This meant that not all the projects could be started at once, but in time each was fully funded. For example, the port and industry were persuaded to use their influence with the national government, through the members of the Diet Source: Produced by author based on the map of Creating City of Yokohama, January 1983 (Parliament) allied to them, to obtain national appropria- tions for the highway system, via the Japan Highway Public Selection that drew on prior effort and existing Corporation.5 Kohoku New Town was developed by a public plans. The projects were not newly conceived by Asukata and corporation, the predecessor of today’s Urban Renaissance Tamura, but had been discussed in the city, by officials and Agency. The Bay Bridge was built by the national government by various constituencies, alongside many other projects. For as part of the national road system. The rest of the projects example, the port had long sought the development of a new were developed through a mix of domestic and foreign bonds highway system, while the port and industry had wanted the issued by the city, national subsidies, and the urban develop- bay bridge built. Instead of inventing from new cloth, the two ment public corporation. leaders used the substantive vision of a transformed city to select, integrate and motivate the six projects. Citizens remained at the center of activity, even for this vision of massive infrastructure. With the projects Selection biased towards building coalitions and selected, Asukata undertook an aggressive and sustained changing culture. In addition to fit with the overall vision, campaign of direct contact with citizens so that the vision be- at least two other criteria were used. One was that at least came common. After being blocked repeatedly by the city as- one significant member of the constituency for a project had sembly, and persisting through several attempts nonetheless, to be powerful and lie outside the city administration itself, he was able to hold the “10 000 citizen convention” in 1967. so that if the administration changed, the projects’ constitu- Even the title of the plan was centered on the citizen, calling ents would have good odds of maintaining priority. As noted for “the citizen to design future Yokohama” (shimin ga tsuku- above, both the highway and bridge projects could draw in ru Yokohama no mirai).6 In time, the city would introduce a the port and industry, while the real estate developers and whole layer of deliberative citizen councils, the “Machizukuri citizens’ groups were strongly attached to the residential Council Districts” (MCD). In those, citizens, local firms and developments and the subway. A second criteria was that city officials would devise detailed local plans, which were the projects had to require multi-bureau cooperation within then translated into district guidelines for the use of zoning the city government, at least until they were mature, both incentives and other policy instruments. The devil is in the to justify their being coordinated from a central point (see detail in citizen participation, and at this distance in time it below) and to create multiple advocates among officials. This is not clear precisely how some of the common problems of latter, for example, was used to exclude a large expansion participation — such as capture or domination by those who in wastewater systems from the final list of six, since it was shout the loudest — were mitigated or overcome. It may be considered wholly within the competence of its bureau. that the place of participation at the heart of the adminis- tration, in the Mayor’s vision and in the culture and practice Changing organizational behavior. Overall, the plan of Tamura’s departments and others (as below), meant such and selection tried encapsulated three principles of changing problems were serially tackled and addressed in their context, organizational behavior through planning, as conceived and as is perhaps the only viable route to overcoming them. articulated by Tamura: 5 A public body established by the national government in 1956 and privatized in 2005. 6 (Dimmer, 2012) 11 The citizens’ convention was a beginning, not an that fifty years after their formulation they remain common end. Even after the convention, Asukata continued to invest knowledge. heavily in securing and maintaining citizen participation in and support for the projects. He employed a diverse arsenal of communication techniques, such as colorful cartoons and Project Execution posters demonstrating the six projects and distributed in schools (“infographics” are not as new as some would believe). The Bureau of Planning and Coordination. A few years He hired an eclectic mix of former student activists, many of after joining the city administration, in 1968, Tamura creat- whom had led protests in the turbulent early 1960s, to run ed a new bureau. It reported directly to the mayor, and was citizens’ welfare programs and citizen outreach. This range “considered slightly above the other bureaus”. The bureau was of activity was spearheaded by Mr Narumi, who was head- given the authority to resolve coordination failures during hunted to the city by Asukata and experienced in commu- implementation, as well as to oversee and approve revisions nity building and in coalition management. He utilized the in the specific project plans (the same word in Japanese can political capital this created in negotiations with the munic- mean “coordination” and “adjustment”). The bureau initially ipal assembly, and relied on ordinary people to maintain the had a staff of approximately fifteen officials, recruited by projects directly (via his reelection) and indirectly (by raising Tamura personally, who sought out rising young officials the political cost of abandoning them for any successor). from across the line departments that would be involved in the projects while similar bureaus in other cities have only The projects came onstream in phases over the fol- administrative staffs.7 lowing decade(s). A timeline of the projects’ key milestones is as follows: Routines of clearing blockages and gathering in- formation. Tamura himself chaired a monthly meeting i. Strengthening of the city center: Opening of the city center where blockages in the projects or large-scale revisions were promenade and the Bashamichi shopping street, 1976; opening of the Yokohama Station east and west free discussed and resolved. He also made a practice of seek- passages and Isezaki Mall, 1980; start of construction of ing out and gathering information from Deputy Directors Minato Mirai 21 project, 1983; opening of Nippon Maru (junior-level staff) in the other bureaus, particularly those Memorial Park and Yokohama Shintoshi Building, 1985. involved in front-line implementation. As the bureau was in charge of negotiations with the private sector about land ii. Kohoku New Town: Approval of final plans in 1974, first sales and alterations in land-use rights, it became a form residents moved into apartments in 1983, and prior to of clearing-house of information — from junior staff, from both, enactment of New City Planning Act and Guide- seniors in the monthly meeting, and from outside the admin- lines for Developing Residential Land in 1968 istration. iii. Kanazawa Land Reclamation: Land reclamation completed in 1977, factory relocation, introduction of new traffic Within the framework of the six big projects, ad- system and Bayshore route, development of Marine Park, justing the plans was routine. As but one example, the all followed within a few years routing of the subway line(s) was changed dramatically from the original plans. The Kanazawa area, though it did come iv. Construction of the subway: First lines opened in 1972, to house significant industry and port activity, also became expanded over subsequent years, later connected to a an area of research and academic activity with the founding major railway line in Tokyo, and green space reclamation there of Yokohama City University in 1949 (today one of the conducted above lines, along with reopening watercours- world’s leading small universities). When asked how much es (streams/river) in prior industrial areas of the plans were altered during execution and how much v. Construction of highway network: Major bypass opened in stayed the same, a now-retired official, young during that era, 1980, construction of arterial roads ongoing since estimated that 80% of the plans’ contents were revised and only 20% remained the same. Continuous adjustment was so vi. Construction of Bay Bridge: Fully opened in 1989 much a part of the culture of the bureau that, when the same official was told of the “70/30” rule followed by Malaysia’s The mayor changed, the projects didn’t. In contrast to PEMANDU today (70% adjustment/30% original plan),8 he an often-repeated, sometimes considered natural pattern, stated that he believed that their higher percentage of revised the six big projects did not lose momentum, or their place plans was superior, since no plan can be perfect at its outset. at the core of the city administration’s activity, after Mayor Asukata left office in 1978. They have become institutional The “Yokohama Formula”, “pursuing publicness” and memories, so that many senior city officials today recall and the “council districts”. The bureau’s activities were not make immediate reference to when asked about the city. The confined to the six major projects. It was also concerned with story and its techniques spread to other cities in Japan — in municipal design, with a mission statement to “pursue pub- part due to the activities of Tamura himself, who advised licness” in all major projects, and “create places, where people many cities after retiring from Yokohama. Today even some can come in contact with each other and communicate”. They ordinary people outside Yokohama when asked about the city still make reference to the six big projects. In all, the projects 7 (Tamura, 1983) were woven into the identity of the city to such an extent 8 (Sabel & Jordan, 2014) 12 did so through a system of incentive zoning,9 as well as height tion in the council districts, ideas often in danger of degener- controls, floor area ratios and public space requirements. ating into mere virtue signaling were employed in a difficult The system was linked to a schema of exceptions clearly tied and sustained transformation. to the creation of public space or preservation of historical landmarks. In developing and implementing this system, the Similarities and regularities with some present bureau was actively involved with both the private sector and ideas. The passage of time has made it difficult to retrieve citizens themselves, through a layer of “Machizukuri Council full details of the processes of this department, such as the Districts” — public deliberations between the city, local res- details of its routine and precisely how it brought blockages to idents and the business community that specified how these the surface and resolved them. Nevertheless, what is known principles and regulations would be put into practice. bares striking similarities to ideas of “recursive implemen- tation”, “problem-driven iterative adaption”, and similar Shaping the broader culture: fixing meetings, engag- models.10 The similarities include a routine of bringing prob- ing young officials. Beyond the bureau itself, Tamura also lems to the surface (“bump up”); clearing blockages through consciously shaped the culture of officials within the city a seldom used but credible recourse to authority (“penalty administration. From the moment he joined, he consciously default”); a rhythm of iteration and an acceptance, even a wel- worked on retooling the often-ignored production line of pub- coming, of revision; an emphasis on beginning from strongly lic administration — meetings. He changed their practice, for felt problems, whether within the administration or among example by installing an extra-large (3.3 m2) drawing desk at the people; and a carefully thought through set of institution- the center of the office. Having round-table discussions at the al structures and processes to give practical meaning to these desk, both the senior and young staffs delineated their ideas principles. While it is difficult to tell how much of this was on tracing paper and lay over them on maps and drawings (a shared with other Japanese cities in the period, planning at precursor of today’s design thinking). Also, the bureau regu- the time has been characterized as strongly linear and “top- larly had all staffs meeting where subsection chiefs and staffs down”. Both contemporaries and those with a living memory report their progress. As mentioned above, he met regularly of the period still describe it as remarkable and singular. with younger, front-line officials to gather information and provide them with advice. He created “study groups”, which he would personally attend and whose subjects he would Expanding the “Mayor’s Wedge” often select. These were intended to broaden the field of refer- ence of young officials while also knitting them closer togeth- Constraints as severe as those facing many cities er. Even after his retirement from the city administration, in- today. A striking feature of this period is how the mayor and deed until only shortly before he passed away, Tamura would Mr Tamura approached the constraints of urban governance. still return to attend or chair these study sessions — once Those constraints were severe: limited formal authority for doing so after a visit (in his 70s) to Machu Pichu. One official municipal administration; an opposing party controlling spoke of “thousands being directly or indirectly shaped by the levers of power in national government; entrenched and Tamura and his ideas”, and another of a “Tamura School” still likely hostile local interests; rapid demographic change in the existing in policy circles. This deep cultural change provided country as a whole, including uncontrollable in-migration. further ballast for the six projects and the transformation Its neighbor, Tokyo, was already a megacity, swiftly becom- plan long after Asukata and then Tamura left office. ing the largest city in the world, the capital in a centralized country. Tokyo drove Yokohama’s structural context — the Call it “community building”, not “urban planning”. population growth and regional economy in the Kanto plain. Across all these activities, Tamura emphasized the centrali- Nor was there a recent history of autonomy, but the opposite: ty of citizens. As noted above, he called the integrated plan 44% of Yokohama was burnt down by air raids during the itself that of “the citizen designing future Yokohama”. He war, and 90% of the port facilities and almost a third of the emphasized ideas of publicness and connectedness both in urban area had been requisitioned by the Allied occupation11. the selection of the projects and their execution, as well as broader urban planning. In fact, he exhorted his team not Rather than resignation, a set of overlapping strat- to call their work “urban planning”, but instead “community egies to expand autonomy. In the face of so limited a building”. In recent years, it has become fashionable again to “mayor’s wedge”, the mayor and Mr Tamura not only expand- talk of citizen participation. In practice, this can and often ed the city’s autonomy, but put that expansion at the heart does devolve into what a participant once described as, “you of their project. To do this in practice, they pursued multiple walk in the door, sit at the front, talk a lot, and take a few strategies, often in tandem. While these strategies, which safe questions at the end — or disengage when attacked”. By are described below, were undertaken by them and by other contrast, the Yokohama city administration put citizens at senior officials, they were made possible by the intense focus the center in rigorous and sustained practice. From a massive on citizens described above. Through developing a common citizens’ convention, to embedded routines of public delibera- vision and organizing the enthusiasm for it, they generated 9 Providing exemptions to height and some other rules to de- 10 (Sabel & Jordan, 2014) (Andrews, Pritchett, & Woolcock, velopers who agreed to provide certain local public goods, 2017) such as restoring a historical monument or building a park 11 (Masaki, 1965) 13 political capital that could be used in assembling coalitions Patience and persistence in negotiations. The city and initiating and conducting negotiations. administration repeatedly mixed persuasion, confronta- tion and persistence in negotiation when handling vested The assembly and management of developmental coa- interests. For example, they convinced one of the country’s litions. The city administration sought to avoid making any largest shipbuilding company to relocate its shipyard. The city interest a categorical opponent. Rather, it actively sought con- needed to acquire this parcel in the heart of the city to create texts in which even those opposed to some parts of its agenda a new urban center. However, as port-related industry in might find it in their self-interest to cooperate on other parts. 1960’s played a central role in Japan’s high economic growth, That already influenced the selection of the six big projects, shipbuilding companies at the time held significant power as described above — by ensuring each had a coalition in sup- over the country with various supports from the central gov- port, the odds of any given actor being able to support at least ernment. In addition, the city was far less autonomous with one project were high. As an example, whatever the resistance limited budget compared with today. Thus, the city had to of the port and its surrounding industries might be to reloca- guide spontaneous relocation of the shipyard without paying tion, the highway network and bay bridge would be a critical compensation fee and to anchor the company and port-re- enabler for them, cutting drastically the costs of transport- lated economies to other districts inside the city. Before ing goods inland. The administration was therefore able to undertaking delicate negotiations with the company, the city convince those interests to exert pressure on members of the secured a relocation site by deciding to reclaim large industri- national Diet to obtain funding for the highways. Conversely, al land in a suburban area. They also persistently responded while property developers might be opposed to the regula- to the company’s requests regarding size and condition of the tions on suburban development and its concentration in the relocation site although these requests were altered many Kohoku New Town, they would be in favor of the relocation times through economic changes of shipbuilding boom, oil of the downtown area, with the consequent increase in value crisis, and recession. The city bureaus also consolidated for of central property and the opening of more land there to de- the relocation. Although the port bureau had hardly rejected velopment. Throughout implementation, the administration the company’s request due to its overwhelming power, the would actively seek new allies, without categorizing fixed sets city at the time did not allow the company to even slightly of opponents and supporters. extend the area of the existing shipyard. Witnessing the city’s tenacious attitude, the heavy industry giant started to Turning single-issue negotiations into multi-part seriously consider that the relocation is inevitable. After city’s deliberations, as with labor and air pollution. Mayor persistent negotiations over ten years, the company in the Asukata’s base was in the labor movement, and he would end agreed to purchase a parcel of the newly reclaimed land regularly use those ties to create channels for discussion or and transfer its shipyard from the urban center. In exchange, forums of negotiation. For example, if a major employer, such the company was able to retain a piece of prime land in the as the railways or industry, were engaged in difficult labor urban center to partially offset the costs. negotiations, the Mayor would suggest folding these into a forum that discussed workers’ concerns and the company’s Opening channels to national government through impact more broadly. That would naturally lead into discus- careful recruiting. Soon after he joined, Tamura head- sions about the economic and physical restructuring then hunted one of the most promising young officials in the taking place in the city. The settlements that were reached Ministry of Construction (the equivalent of the Ministry of then had the weight of the overall deal to support compli- Public Works). The young official was a Yokohama native, and ance. For example, Japan did not have legislation governing had graduated near the top of his class at the University of air quality until 1968. However, soon after taking office Asu- Tokyo Law School, the traditional training school for elite kata used this technique to reach a deal with heavy industry national officials. The contacts he brought with him, and the that included those industries investing early in air pollution respect he held, allowed Tamura to open informal channels of reduction. Though the absence of regulation meant that the communication to senior officials at a crucial moment. Such deal would be difficult to enforce legally, industry knew that recruiting may be easier said than done. What seems to have violating it would jeopardize the broader deal, which might made it possible was the sense among many young officials reignite labor strife, and hence be extremely costly for them. that new and exciting things were happening in Yokohama, and that sense of possibility combined with the activation of Willingness to find and use ambiguity in national civic pride proved potent recruiting tools. legislation or regulations. The city administration sought out areas of ambiguity and then tried to match them with Creating symbolic moments to alter a sense of the creative new policy instruments. Some examples were already possible. Tamura’s first major act on joining the city admin- described above — the “Yokohama Formula”, including a istration was to change a planned overpass highway through form of incentive zoning, called the “Urban Environmental the old center of the city into a tunneled underpass instead. Design System” (UEDS), as well as “Machizukuri Council The overpass was not funded by the city, but by the national Districts” for participative planning (see above). Perhaps the government and the prefecture (provincial-equivalent). As most striking cases, however, were the quasi-regulations such, most city officials would have considered it a fait accom- issued as “Administrative Guidance”. These are described in pli, with little ability to affect it. Tamura, however, decided detail in Box 1. that the overpass would destroy the fabric of the area, and it 14 had to be diverted. He conducted a wide-ranging campaign, ga-projects). Most importantly, two observers independently using all of the techniques described above — this was the recalled this as an act remembered for its symbolism, and the point when he poached the young official from the Ministry message it conveyed to officials — that even the largest plans of Construction — and eventually succeeded in having the could be revised, and that even on such a project, they could plan revised. It might be noted this was in the mid-1960s, take the city’s future into the hands of its own citizens and years before the dangers of overpasses for community fabric administration. had become common wisdom, and the project remained relatively small in the scope (unlike some tunneling me- Box: Administrative Guidance air pollution, Asukata went through the railway union to trigger the negotiation and create additional incentives for abiding by The term “administrative guidance” referred to documents it. still used today to describe internal regulations within gov- ernment. The Asukata administration, however, decided that The city then generalized the content of this pact to issue the it could be used as a form of regulations for the city. That is, “administrative guidance” for large-scale real estate develop- by issuing documents under the form of such guidance, but ment in general. For example, the method was used to issue with content applying outside the city administration, they maximum floor area ratio guidance for the area around Shin-Yo- could in effect create a new instrument, legally ambiguous kohama (see below), to avoid it becoming a bedroom communi- but rooted in formal structures and available only to the ty for Tokyo. Beyond the bilateral pacts, compliance by business administration. in general would be patchy, and many guidance documents were challenged and defeated in courts. If the city had just proclaimed such “guidance” and then used coercion to enforce it, it would likely have been at best ineffec- Yet with the largest actors already agreed to the terms, with tive and at worst harmful. The issuing of such guidance was some number of companies complying out of a sense of civic therefore done after the administration had concluded a nego- ownership resulting from the city’s convincing articulation of tiation over its contents with the most significant private (or its vision, and some other number complying out of fear, the quasi-private) private sector actor in the relevant sector. More amount of non-compliance could be tolerated, and remained specifically, the city would come to a bilateral agreement, and an improvement on the status quo ante. Eventually, in the late then generalize the terms of that agreement into the adminis- 1990s, national legislation clarified the internal-only applica- trative guidance. tion of administrative guidance, ending its use in this fashion. By that time, many of the principles, ideas, and even specific For example, at the time the largest housing developers in Ja- regulations that had been embodied in Yokohama’s administra- pan were the railways, who built housing units along their lines. tive guidance documents had become part of national law. In When the Tokyu Railway Company built a new railway line (the its evolution, however, from the multifaceted engagement with Tama Denentoshi line), and a large amount of housing along the the private sector and civil society, its concentration on citizen line, the city negotiated with it that the company would bear welfare, in the joint elaboration of standards and problem a significant part of the expense for building primary schools solving through deliberation, and in its creativity, the “adminis- in those areas. In a similar vein, the city negotiated with other trative guidance” became a quintessential tool of the Yokohama railways about the floor area and other spatial regulations of formula. developments along their lines. As with the negotiations over 15 Evaluation in later decades. But, overall, through the implementation capabilities that delivered all six of the projects, the city man- The vision realized. The six big projects took time, as any aged to build new comparative advantages, without sacrific- of that magnitude would, but all were completed: the port ing or ignoring the old. moved and the city center was reknit; the northern suburbs and southern industrial areas were built; the bridge, high- Huge population influx incomes steadily rising. In the ways, and subways were completed. More generally, Tamura’s decades after the mid-1960s, Yokohama’s population more vision was realized. The city not merely survived but grew than doubled, to 3.3 million by 1995. Even as the city’s tra- from strength to strength in the 1970s and 1980s even as ditional strengths, in industry and the port, became steadily the port and heavy industry dwindled in their significance. less important, and the tailwinds of rapid catch-up growth It is perhaps instructive to think of how many other large and demographic expansion abated, the city continued to ports that were not global financial centers have managed to grow rapidly. While in the period 1975-1995 average wages in restructure away from that dependence. Even Singapore, for the city increased more than two-fold (in nominal terms) and example, vaunted in many ways, remains dependent on what real gross city product per capita increased by 50%+ (Figure 4). is essentially a commodity business, container transshipment in its port. Many of the cases of urban decline in the US and The (always) difficult question of attribution. It is dif- Europe fit precisely the old Yokohama profile: with port-based ficult, if not impossible, to fully disentangle the results of the concentrations of heavy industry near to or part of large ur- Asukata era from the external influences shaping Yokohama. ban agglomerations, when these ports and industries became Undoubtedly, the rapid transformation of Japan’s national obsolete, the cities that dependent on them also became economy and the rapid growth and development of Tokyo in ghost towns. the period provided strong tailwinds. Still, one might observe that there are many other cities in the region around Tokyo. Industrial growth reoriented. The completion of the Kawasaki, for example, is in fact closer to the capital, and projects altered the growth dynamics of the city. The port today firms express an almost equivalent locational prefer- successfully navigated containerization, and today handles ence between it and Yokohama, indicating a limited inherent almost 3 million containers a year, with some of the world’s advantage of one versus the other. Another contrast might highest productivity levels.12 Heavy industry has also con- be Kobe. Though it is not near Tokyo, and hence could not tinued. For example, the shipyards are still active and have reasonably be expected to grow as rapidly in size, it is similar moved into higher-value activities — Mitsubishi Heavy this in many respects to Yokohama — also one of Japan’s first year decided to consolidate all its ship design work there in a open ports, also a leader in its early 20th century industrial- new “vessel and marine technology center”. But the city is not ization. Yet until the earthquake in 1995, Kobe attempted no and for a long time has not been dependent on them. transformation of any comparable magnitude to that done by Yokohama in the 1960s, and it arrived in the 1990s far more New engines of growth. The center of the city became an dependent on heavy industry, low-value manufacturing and engine of growth in services and cultural activity. The spill its port. over from Tokyo became an asset, rather than a liability, contained in Kohoku New Town at first and then attracting high-income residents in search of a different quality of life Figure 4: GROWTH IN THREE DECADES AFTER ERA to the capital. The northern areas of the city, spared from OF SIX BIG PROJECTS residential sprawl, became in the 1980s a center of Japan’s electronics manufacturing, and then a new economic node 12,000 focused around the Shinkansen station, linked to the city 1975 1985 1995 10,000 center by subway. The southern Kanazawa area, along with a new university (Yokohama City), became a second dense con- 8,000 centration of industrial activity, complementing the Keihin area in the north. Each of these area-based transformations 6,000 was crucially dependent on the linear transport projects 4,000 — without the bay bridge, the city center would have been choked with traffic, even if the shipyards and port moved; 2,000 without the subway system, Kohoku New Town would have 0 risked being unattractive, and the later semi-conductor clus- Jobs Avg wage GDP per GDP ter perhaps unlikely to develop; without the expressway sys- (k) (JPY k) capita (JPY k) (JPY bn) tem, the industrial relocation could have resulted in stranded or uncompetitive plants. There were nuances to each of these Source: Report on Prefectural Account, Cabinet Office of Japan developments, especially that of the downtown development, 12 https://www.joc.com/port-news/port-productivity/chinese- ports-lead-world-berth-productivity-joc-group-inc-data- shows_20140624.html 16 NEW CITIES: 1986-2010 Minato Mirai 21 A significant expansion of scale, in a period of excess scale. Minato Mirai 21 (“port of the future 21[st century]”) Rationale: connecting the old city centers into an covers 186 hectares (1.86 million sqm) of area. The central integrated urban core. The idea of creating a major business district with 141 hectares occupies 76% of the total downtown area (later called Minato Mirai 21) through land land, and it is the core of MM21. Importantly, the original reclamation was part of the “six priority projects” that began conception for MM21 was much smaller: only 110 Hectares, in 1965. Mayor Asukata and Mr. Tamura wanted the vast or almost 40% smaller. The decision to expand it so signifi- shipyards that occupied MM21 that separated the two prior cantly was taken in the early 1980s. A large national subsidy downtown areas (Kannai and Yokohama train station, Figure was granted for the land reclamation, and the period was 5), to be relocated. Land adjustment could then connect and near the peak of Japan’s economic expansion, when it appears integrate the two old areas, with a “new city” called MM21. that many cities were expanding the scale of large reclama- These areas together would form a new urban core. By tion projects (for example, in the same years Kobe undertook creating this urban core with substantial economic activities an even larger reclamation, the second phase of its ‘New Port planned, it was expected that the city could become an “in- Island’). Reclamation and land adjustment began in 1983, ternational cultural management city”, Asukata and Tamura’s and stretched out over the subsequent eight years, so that term for an outward-oriented city with a concentration of the project opened into the teeth of Japan’s post-bubble “lost high-value added activities and a high quality of life. decade”. Figure 5: Minato Mirai Reclaimed Land and Prior Use Source: City of Yokohama (Left), Edited by authors with data from MINATO MIRAI 21 Information vol.88 p. 14 Infrastructure Development, City of Yokoha- ma (Right) 17 Thirty years later, some success, but lagging demand. should not be taken as necessarily problematic, since — as is MM21 has avoided becoming a “ghost city”, a common fate discussed below — the effects of headquarters versus R&D or among “new city” developments. As of today, almost three design functions may be overstated. It has been argued that quarters of its area (73.1%) has been developed, with a low much MM21’s activity prior to 2010 was cannibalized, with vacancy rate (under 10%) in those buildings. On the other most of the jobs “created” being simply companies moving hand, the area possessed significant strengths — a central into the area from older offices in the Kannai area.13 While position in a large city, in one of the world’s largest metropol- there may be some truth to this argument the relative small itan areas. For comparison, then, it is instructive to consider size of offices in the Kannai area, raises doubt of the strength it alongside Canary Wharf of east London, and Jersey City in of this assertion. metropolitan New York. All three projects shared an objec- tive to rejuvenate a run-down waterfront urban area, with a A slow start meets large scale and a depressed econo- similar development size and timeline. All three focused on a my in the critical first phase. The first phase of a devel- mix of office space, retail, residential, and public open spaces opment project is critical, as the type of tenants and investors (parks, etc.). Each now sustains around 100,000 jobs, with attracted defines the market position and value of the project, MM21’s jobs concentrated in head offices, some R&D, and which in turn determines financing and further transport in- retail and tourism; Canary Wharf in financial services; and frastructure upgrades in subsequent phases. 14 The early years Jersey City in high-value back office functions (Table 1). of MM21 coincided with the aftermath of Japan’s asset price bubble, with falling demand and prices for real estate. The Where is the demand? Where MM21 has significantly area had a handful of major “anchor tenants”, including an underperformed is the growth (or lack thereof) of demand. international conference center and the Yokohama Landmark Most of the land in Canary Wharf was built up by the 1990s. Tower, which opened in 1993. But, scattered across such a In the same period, few to no major office buildings had been vast area of land, with over a kilometer of — at the time — established in MM21. While Canary Wharf achieved “Grade mostly empty land separating them, these could not form A” office status with a critical mass within 10-20 years, and agglomeration economies or crowd-in others. In contrast, one has become the de facto second financial center of London, might note that the central business area of Canary Wharf MM21 seemed to be lagging. In MM21, “true” activity only is roughly 40 Ha. in size, or less than one quarter the land started to come when Nissan moved its headquarter to this footprint of MM21, so that the first buildings could create a area in 2009, and Fuji Xerox opened an R&D facility in 2010. much greater sense of density and connectedness. Overall, it The tenant type of MM21 remained primarily complemen- is instructive to consider a counterfactual: Had MM21 been tary to, rather than competing with, Tokyo, with a focus on executed at its original scale, and been ready in the late 1980s R&D and heavy industrial firms. On the other hand, this instead of the early 1990s, with a greater sense of density and connectedness from the start, would MM21 have been more successful than what it is today? 13 (Blakeney, 2010) 14 For example, if vacancy rate in phase 1 was too high, the population doesn’t justify putting in extra money to upgrade or extend transport infrastructure, for example, a metro line, which in turn will create a vicious circle to next phases of development should major “promised” infrastruc- ture was not in place on time. 18 Table 1: A comparison of MM21, Canary Wharf, and Jersey City. Minato Mirai 21, Canary Wharf, Jersey City Downtown, Yokohama City East London Metro New York Site area 1.86 million sqm 1.95 million sqm 5.8 million sqm Completed built space 0.75 million sqm 1.4 million sqm completed 1.5 million sqm completed Planned built space Extra 0.12 million sqm planned Extra 0.49 million sqm planned Extra 0.68 million sqm planned Land use/functions Office (front and back office), Office (front office), retail, Office (back office), retail, residen- retail, residential residential tial, parks Major developers Urban Renaissance Agency London Docklands; Olympia The LeFrak Organization; Kushner (land readjustment), City & York; Local council and city Companies; Government (reclamation), government (affordable housing Port Authority and national and co-financing of subway line) government Employment/population 102,000 105,000 84,072 Development rate 73.1% ~100% (no substantial vacant ~100% (no substantial vacant land land left) left) Key tenants Mainly R&D, Industrial firms Mainly financial and business Back offices (and some headquar- (mostly branch offices, head- services headquarters (e.g., ters) of corporations in financial quarters emerging): Nissan, Barclays, Citigroup, Moody’s, and business services, and trans- Mitsubishi Heavy Industry, Morgan Stanley, S&P Global) port and airline companies (e.g., Chiyoda, JGC, Shincron UBS, JPMorgan Chase) Incentives provided by Local tax exemption (halving Local tax exemption; capital Business tax incentives, various government property tax and urban plan- allowance to investors loans and grants to priority areas ning tax for the first five years); such as manufacturing retention, capital allowance to investors SMEs, technology and innovation Source: Literature search.15 Although muted by special purpose vehicles, the proj- should be plans on what other optional social and public ect may have exerted long-term fiscal drag. Like many spending can be cut back versus taking a toll on essential urban redevelopment projects, MM21’s fortunes fluctuated in services. If the debt servicing would put on too much burden the past three decades as macroeconomic cycle hit both the on a city, and essential public services had to be discontinued business and real estate communities (and they tend to be should the project turn sour, then perhaps the city was not highly correlated). When demand fell short of expectations, ready to take on the project. In the case of Yokohama and the local fiscal impact was significant for MM21, but less MM21, the debt service costs were not exorbitant (Table so for Canary Wharf and Jersey City, in which the private 2) — at JPY 84 billion, or less than USD 1 billion, over two sector shared a considerable amount of development risk. In decades, or less than JPY 5 billion per year. However, that fact, the main developer of Canary Wharf, Olympia & York resulted only from part of the land reclamation, and so rep- went bankrupt in the early 1990s and had to be restructured. resents a small share of the total project costs. The remainder When structuring an urban redevelopment project, it is was funded through national subsidies, channeled via the essential for the public authority to evaluate and plan “for the Port Authority or Urban Renaissance. It is not clear whether worst” which often means if the economy hits bottom, there this crowded out other possible national subsidies — indeed the overall financial structure, and total cost and debt bur- den, remains somewhat opaque and difficult to piece together even today. It has been claimed the project did mean the city had to underinvest in facilities like libraries and schools, and 15 Clippings from Summary of Minato Mirai 21 project by City on some of these metrics it does rank among the lowest in of Yokohama; “Financial News London”; “Canary Wharf: Japan per capita (Figure 6). It is, however, difficult to sub- An Establishment of a Major Business District” (2005), stantiate any causal relationship between MM21 and such master’s thesis by Carolina Herling and Caroline Liljedahl, underinvestment, and the project did significantly increase Royal Institute of Technology Stockholm; “Waterfront tax revenue of the city. At the least, though, the excess scale Access and Downtown Circulation Study” (2007), by Jersey of MM21 is unlikely to have supported fiscal freedom in the City Government; http://www.city.yokohama.lg.jp/keizai/ city in the short-run. yuchi/support/ 19 Table 2: Project cost of Minato Mirai 21 land reclamation (JPY billion) Expenditure Project cost Income Project income Construction cost 97.0 by selling land 156.0 by selling land rent rights 30.7 Compensation cost 40.2 by renting land 8.3 Management cost 13.6 Others 30.4 Debt service cost 84.3 Allotment from profit of other projects in the same account 9.7 Total expenditure 235.1 Total income 235.1 Source: Third mid-term plan - the account for land reclamation, Port Bureau in City of Yokohama, 2010 FIGURE 6: SCHOOLS PER 10,000 POPULATION, Cabbages, and a few factories. From 1964 to 1986 the area with 80 hectares of readjusted land in front of the JAPANESE CITIES Shin-Yokohama station saw very little growth (a pattern 0 0.5 1 1.5 2 2.5 3 3.5 4 reported to be not unusual around Shinkansen stations in Ja- pan). In 1981 there were only 4,000 employees in companies Hamamatsu Toyama near the station, and by 1986, there were just over 7,000. The Kitakyushu only activity was that some of Japan’s electronics companies, Okayama at the time near the peak of their growth, had set up factories Shizuoka in the area. Yet as one of the officials responsible for its urban Hiroshima planning at the time now recalls, in the early 1980s the area Sendai was still “mostly cabbages”. Kumamoto Niigata Avoiding a bedroom community. Although development Kyoto around a shinkansen station would not have been inevitable, Chiba the slow development of Shin-Yokohama is something of a Kobe Nagoya puzzle. It is a mere twenty minutes by the bullet train to the Osaka heart of Tokyo, faster than subway commutes from much of Fukuoka Tokyo itself. Although the Tokyo real estate bubble only truly Sapporo soared after 1986, the first two decades after Shin-Yokohama Sakai opened were still a period of rapid population and economic Sagamihara growth in the capital. It would seem, then, that developing Saitama apartments or other forms of residential real estate around Yokohama Shin-Yokohama would have offered high returns. It is not Kawasaki clear why this did not happen. When asked, officials from the time pointed to the regulation of floor-area ratios in the Source: e-Stat (Government Portal Site of Official Statistics of Japan) area, through use of the “administrative guidance” described above. Another possible explanation may be that the Kohoku Shin-Yokohama New Town served as a kind of “shield” for Shin-Yokohama, absorbing residential spill-over from Tokyo that otherwise A station somewhat on the outskirts. In the early would have concentrated there. The “New Town” offered, and 1960s, the Japanese government was rushing to complete still offers, a dense agglomeration of retail, commercial and the world’s first bullet train (shinkansen). The line would run cultural activities, and is geographically even closer to Tokyo. from Tokyo to Osaka, with a stop planned for Yokohama. Such advantages, along with the incentive zoning schemes The city had hoped the line would pass through the existing available in the “New Town”, may have outweighed the Yokohama train station. But the overwhelming imperative attractions of the bullet train station. Both these reasons are to open the line before the 1964 Olympics meant that the ultimately speculative, though it is perhaps notable that both line had to be built on the straightest route possible, and in have their roots in the “six big projects”. the shortest time. That resulted in the station being placed in an area that was then largely agricultural, roughly equidis- A subway station, then a stadium. The area truly started tant between the city center (where Yokohama station was) to change in the mid-1980s. A subway station was opened and what became the Kohoku New Town, that is the area of at Shin-Yokohama in 1985, providing it a rapid connection mostly residential suburbs for the spillover from Tokyo. The to Yokohama station, and to the residential concentration station was called “Shin-Yokohama” (new Yokohama). in Kohoku. In 1989, the Yokohama Arena, a huge hall where many music concert and conventions were held, was opened 20 in the Shin-Yokohama area. In 1998, International Stadium Figure 8: shin-yokohama employment growth Yokohama was then opened in an adjacent park, hosting the World Cup Final of 2002 (Figure 7). The late 1980s were also 60,000 the time of bubble-era land prices in Tokyo, which caused Jobs many firms to look for new locations outside the capital. In 50,000 all, between 1986 and 1991 both the number of firms and the number of employees tripled, with the latter reaching 40,000 almost 25,000. 30,000 Figure 7 Map of Shin-Yokohama District 20,000 10,000 Tsurumi River Express way 0 1978 1981 1986 1991 1996 2001 2006 2009 2014 Yokohama Areana Source: Offices in City of Yokohama Medical and International heatl facilities JR Yokohama Line Stadium Yokohama A developing cluster. Semiconductor firms remain a Shin-Yokohama visible part of this landscape. One firm, Macnica, has become Station Shin-Yokohama Station South (Area designated by the city's one of the world’s leading semiconductor distributors. It list- urban plan) ed publicly in 2000, has been growing revenues at the average rate of 25% per year in the past three years,16 and has doubled its office footprint in the area through acquiring a second building. It is also home to a wide range of semiconductor Blue LIne (subway) design firms, ranging in size from SMEs to some of the Tokaido Shinkansen world’s largest (including ARM). It is also home to the Japan offices of leading Electronic Design Automation (EDA) tool Source: Produced by the author based on Basic Plan for New Yokohama providers, who make the software that semiconductor firms Urban Center, 1999 use to design new chips. It was home to an institutionalized consortium of semiconductor design firms and research A growing number of semiconductor firms. Notably, a houses, known as STARC. That consortium closed its doors cluster of firms in the semiconductor-related industries took in 2016, and transferred its EDA-related intellectual prop- root, both in design and in distribution. A few such firms erty to the public domain. On the other hand, it is not clear had already been started in Yokohama in the early 1970s, how much of the commonplace and repeated interaction that but it remains unclear what may have precipitated this, and characterizes a strongly connected cluster take place in the they seem to have remained quite small or scattered in the area. There did not, for example, seem much interaction be- following decades. It is also not clear what precipitated their tween the distribution and design firms. It is also noticeable growing concentration in the Shin-Yokohama area. How- that the directory of the IT firms in the area has a very wide ever, this is an industry that involves high skills and high variation of quality and size, with many included that appear value add, yet is also cyclical and requires constant access to to be little more than small web development firms. That demanding clients and new research. As such, it would derive should not be taken as representative, but does indicate the significant value, and have a high propensity to pay for, rapid absence of a local association or set of institutions that could access into central Tokyo. The shinkansen may then have intermediate information gathering on firm quality. For the been more attractive to it than other sectors, as would the same reason, it is hard to establish robust statistics about proximity of the electronics plants established in the area in the nature and size of the semiconductor-related firms in the the preceding decades. area. In all, it seems most reasonable to assume that there is a concentration of firms in the area; that a number of them col- Growth throughout the “lost decade”. While Minato laborate, and sometimes institutionalize that collaboration; Mirai struggled to attract tenants in the 1990s, the national but that the type of very dense, highly organized networks economy suffered through the post-bubble “lost decade”, and that characterize clusters at the frontier of technology, still the Tokyo land bubble ended, Shin-Yokohama continued to has opportunity to fully materialize. grow. Once it had reached critical mass, its exceptionally strong location and strategic combination of infrastructure made it one of the few urban areas in Yokohama (if not the country) to post strong growth. From 1991 to 2001 the number of firms almost doubled, and the number of employ- 16 From JPY 1.9 billion in 2012 to JPY 3.4 billion in 2015. ees expanded by two thirds, to almost 40,000. Nor did this growth stop in the 2000s, though it did slow down. By 2009 21 the area had some 55,000 jobs (Figure 8). An example of catalytic intervention in an area with of localized “advantage of backwardness” — low land prices a strong endowment. Regardless of whether or to what and the presence of key industrial customers in the years extent the semiconductor industry is a “true cluster”, the when the subway and stadium provided the missing ingre- Shin-Yokohama area must qualify as a success. Compared to dients to start a growth take-off. That growth then persisted some of the investments that cities make in trying to create throughout an intensely difficult macro-environment, when new clusters, those made here were modest. One might argue other areas in the same city, with more public investment and they were, in effect, costless — the subway station was on fanfare, were struggling. The area is now the home of a set of a line already planned for other reasons, and had its own companies in one of the single most demanding, frontier-lev- motivation in connecting downtown Yokohama to the shink- el subsectors possible, and one that is a graveyard of indus- ansen. Without entering the debate about the economic value trial promotion elsewhere. Though perhaps modest in scale, of giant stadiums, its rationale seems to have had little to do the area is a striking demonstration — and contrast — of the with the development of Shin-Yokohama, and would likely potential of a few, highly strategic interventions, and their have been built regardless of plans for the area. The most ability to truly create the new, where overly scaled and more purposeful action seems to have been to restrict residential promoted efforts may fall short. growth in the area in its first two decades, providing a form 22 A LOOMING CRISIS: 2015- A n ageing city. After decades of population growth, Plan focused on attracting R&D and company HQs. Yokohama’s population will soon start to decline. The The city’s overall plan for dealing with the crisis emphasiz- share of population 65 and over will grow to almost es attracting outside companies to the city. An emphasis is 30%, and hundreds of thousands of people will retire between placed on attracting big-company headquarters, which has now and 2030. This challenge will be particularly acute in various benefits for the city. Such investor attraction can also the industrial and SME sectors, where founder/owners are be heavily dependent on using subsidies, , which might raise nearing retirement, as are skilled older production workers, but some questions of whether such taxes will be significant. younger people do not wish to succeed their parents. Some de- Some companies indicated that the taxes their employees population is already occurring, with 10% of the city’s housing paid, and the property taxes they generated from occupancy, stock estimated to now stand empty, particularly in the south were at least an order of magnitude larger than the net corpo- of the city. With regards to demographics, some city-based rate income tax they paid to cities. institutions have been devising programs related to life- long-learning — Yokohama City University, for example, has An emphasis on obtaining and executing national a series of courses for seniors. The city overall, however, has projects. The city has also devised a “FutureCity” plan, embodied in its plan that it will attempt to constrain spending which responds to the national “FutureCity Initiative”. That on the elderly (e.g., transport subsidies). It was also not clear deepens several demonstration projects underway, incorpo- what programs might exist for extending the work-life of those rating support from national programs. Within that are also elderly who wish to continue, e.g., with appropriate retraining several projects related to “smart grid”, “smart city”, and affil- or job placement programs. It was also not clear if the city was iated programs, with a “smart business association”. The lat- pursuing programs to mitigate the retirement of SME owners, ter, however, was launched on the basis of a consortium that or attempting to improve the environment to lift their profit large companies established for biding on national demon- margins, which could have significant fiscal benefits given stration projects. It is of course often valuable to leverage the corporate taxation. availability of national funds to pursue local priorities, and national programs can often spur local governments to see Changing industries. At the same time, the advent of new opportunities they otherwise would not. Where projects are vehicle technologies — autonomous driving and electric and previously identified, local governments are often required to hydrogen cars — will place significant demands on the ability devise ways to fit funds and policy support to local projects of many sub-sectors in Yokohama and the surrounding area to they want to implement. In the best case, problem solving adapt. Those sectors remain highly significant in Yokohama’s proceeds by matching local problems and opportunities economy, in which manufacturing overall makes up 14% of with the possibilities of obtaining funding support. There employment, with an unknown number in other industries is, though, sometimes a risk that the emphasis becomes too dependent on them17. At the same time, those industries are great on what funds are available, with local problems still a undergoing and will continue to undergo fundamental shifts concern but somewhat secondary. In an environment with in production processes, with increasing automation and the many national funding opportunities, that risk does need to possibilities of additive manufacturing. On the one hand, be guarded against. these may help to overcome some of the challenges associated with retiring owners and an ageing labor force, but they may A deep base of capabilities that augurs well. Yet despite also lead to a decline in jobs and a reduction in local income its looming crisis, the city still possesses an extraordinary set taxes. The balance of positive and negative is therefore likely to of strengths. Some of those strengths are illustrated by the depend crucially on the quality of training programs for dis- decisions of some of the world’s leading firms, in multiple in- placed workers, both those far from retirement age and those dustries. Apple has recently opened one of its principle global nearing it but with a desire to continue working. R&D facilities in Yokohama, a facility that is said to focus on highly advanced artificial intelligence research. Nissan moved its HQ to Yokohama, but likely of more importance for the 17 Employment Status Survey, 2012 23 city’s broader economy was its decision to produce the Leaf, standard incentive programs. On the other hand, for a city its mass market electric vehicle, in the city. Not many cities with so deep a base of capabilities in auto-related industries, in the world are home to sizeable electric vehicle production, in robotics, with existing electrical vehicle production and given the high demands it places on the capabilities of both AI-related R&D facilities, there does not seem to be much the workforce and suppliers. Both Apple and Nissan’s deci- emphasis on, for example, becoming one of the world’s two sions were made without city involvement (to our knowledge), or three leading autonomous electric car production hubs. As and it is not clear if either required subsidies. Yokohama has one example, it does not seem as if the highways have been a deep production base (Nissan has 50 tier I suppliers in the fitted with sensors, or if Nissan or others have been engaged city area alone) in industry. Many of the old factories along on the topic — the Nissan HQ showroom has a “self-driving” the Keihin industrial belt are converting or have been con- car for test, but with extreme limitations (only a small stretch verted into R&D facilities. They were first built over 100 years of highway, in good weather). While at such a frontier of ago and even at the time were near the frontier of technolo- technology it would be risky for the city to attempt to direct gy (at the time, mass production in a Ford factory). Minato or control where the private sector should invest or in what, Mirai also has several large R&D facilities, some of which did the private sector has already signaled its intention to pursue receive subsidies, with a maximum amount available of JPY 5 these technologies. Beyond just Nissan, many of the “tier billion for construction costs, or around USD 50 million. This one” SMEs are already retooling for the changes in technol- list of capabilities could be extended even further, though ogy that are approaching. Moreover, autonomous electric one last to note is the reservoir of engineering talent. In JGC vehicles are a single example. The broader point is that the fu- and the Chiyoda Group the city has present at least two large ture of the city may lie less in hunting for national programs and well established engineering companies, which regularly or trying to sell subsidies to large headquarters, and more in manage and execute some of the world’s largest-scale engi- facilitating the extraordinary strengths and spirit of the city neering projects. to become world-leading in several of the technologies that will shape the global future. Some plans to capitalize, though not always well connected to capabilities and challenges. Some have suggested building on these strengths to transform the harbor area again, into an area emphasizing R&D and that facilitates the transition to new technologies aggressively and at scale. The city’s overall strategy also has provision for inter- net-of-things and AI-related facilities, though it is not clear if there are substantive programs to facilitate this, beyond 24 CONCLUSION: A REMARKABLE, REALISTIC, DEMOCRATIC TRANSFORMATION I n a sense, to deal with its looming crisis Yokohama might What we can conclude, if not without qualification, is that a be best served by considering its own history. In recent remarkable transformation happened in Yokohama; that it years there is a sense of a city with remarkable strengths, began when the city was led by remarkable men; and that the deep capabilities, and strong civic pride — but one that might ideas, strategies and tactics they used were not only remark- be looking to too many small projects, or looking outside a able, but replicable, and can be linked through a coherent and bit too often, or looking away from its hardest challenges. credible logic to the city’s transformation. It might stand in Of course, in this it would be far from unique — the politi- a striking contrast to the story of a famous urban planner, cal economy of many cities, in Japan, and in the rest of the Robert Moses, who remade New York in the first half of the world, often leads to the same type of responses, or worse. twentieth century.18 Moses used federal funding and the And most other cities do not have the capabilities Yokohama power that it brought to run overpasses through the city, dis- does. As one private sector executive put it, “other cities say locating communities, seeking to serve the city but as he felt they will do a project, but Yokohama gets it done”. Even when, was best and in constant accommodation to power; Tamura arguably, the city may have built Minato Mirai too large, it used national funds too, and dislocated as well, but he fought still bears a respectable comparison with financial services national plans to avoid dislocating people, pushing overpass- developments in London and New York — two of the most es underground, and he fought to relocate not communities, global of cities and dominant financial hubs, not prior port but large companies and vested interests. One sought to leave and industrial cities in the shadow of a capital. Even where his mark on the city, confident that would make the city a the city might have allocated more resources to a burgeoning better place; the other sought to remake the city for its citi- area, in Shin-Yokohama, that area still grew from cabbages to zens, confident that would leave a positive legacy.19 semiconductors in a few decades. What, finally, may make this a story not just of interest but A range of factors lie behind Yokohama’s success. There is its of hope is the context in which it was achieved. By now some proximity to Tokyo, though it is far from the only city close to might be used to hearing such stories about national leaders the capital. There is its history as an open port, though other or officials, in some fortunate moment when normal con- cities opened as ports in the same period, and few suffered ditions were suspended. But such cases in cities have been the devastation that Yokohama did in World War II, or had rare, except perhaps in capital cities or non-democratic states the length and depth of its occupation. What Yokohama had, or with exceptional endowments. By contrast, Yokohama’s in the period from the mid-1960s to the late 1970s, does, transformation occurred in a difficult, far from unique, dem- however, seem to be unique. There were other charismatic ocratic city, in an uneasy and often oppositional relationship mayors in Japan in the period — in Kobe, in Tokyo, else- to a national capital, in a centralized country. It was done where — but what influence there was seems to have run not by running from democracy, but embracing it; not hiding from Yokohama outward. Today, people can still sometimes from a technological threat, but using it; not complaining talk of a “Yokohama model”. One interviewee noted, “in Ja- about a limited scope of action, but expanding it. pan, this story is known”. The senior officials that “get things done”, and the habits that allow them to do it, still speak with deep familiarity about this period of the city’s history. 18 (Caro, 1974) 19 We are indebted to Professor Suzuki, Dean of Yokohama City University’s School of Engineering and Planning, for helping us elucidate this comparison. 25 BIBLIOGRAPHY Andrews, M., Pritchett, L., & Woolcock, M. (2017). 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Schulz, Urban Spaces in Japan: Cultural and Social Perspec- tives (pp. 74-106). Oxford: The Nissan Institute/Routledge Japanese Studies Series. 27 This work is product of the staff of the World Bank Group with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, or the governments they represent. Nothing herein shall constitute or be considered to be a limitation upon or waive of the privileges and immunities of the World Bank Group, all of which are specifically reserved. The Tokyo Development Learning Center (TDLC) program is a partnership of Japan and the World Bank Group. TDLC supports and facilitates strategic World Bank Group and client country collaboration with select Japanese cities, agencies and partners for joint research, knowledge exchange, capacity building and other activities that develop opportunities to link Japanese and global expertise with specific project-level engagements in developing countries to maximize development impact. Find the main report and the companion papers at www.worldbank.org/competitivecities World Bank Group Social, Urban, Rural and Resilience Global Practice Tokyo Development Learning Center (TDLC) Program