Can a sleepy Japanese town become Asia's Silicon Valley?

By Mariko Oi
BBC News, Tokushima

  • Published
The entrepreneurship school under construction
Image caption,
The school for tech entrepreneurs is due to open in April 2023

Always seen as Japan's backwater, Tokushima is not where you would expect to see the opening of a special new school for tech-savvy young entrepreneurs.

Located on the southern island of Shikoku, the sleepy, rural region doesn't have a reputation for being a thriving place.

But the area, which has been suffering from both an ageing and shrinking population for decades, will soon welcome a bunch of vibrant, young new residents.

In April next year a school of tech entrepreneurship - the first of its kind in Japan - will open in the Tokushima town of Kamiyama.

The students, aged from 15 to 20, will be taught engineering, programming and designing, as well as business skills such as marketing. They will also learn how to pitch their business plans to investors in order to raise money.

The man behind it is Chikahiro Terada, the boss of Tokyo-based start-up Sansan, which specialises in the digitalisation of business cards. These still play a huge role in Japan's corporate world.

Image caption,
The school is the brainchild of businessman Chikahiro Terada

Mr Terada is not from Tokushima, so why did he pick the area? The story starts back in 2010.

"Twelve years ago, I set up a remote office here because I heard that Kamiyama is an interesting town with high-speed internet in [empty] old houses," he says.

Mr Terada had paid a visit and met a local businessman called Shinya Ominami, who had been responsible for the installation of the town's excellent internet.

"I thought I might get told off if I said I wanted to open an office here without helping out the town," Mr Terada recalls. So he offered to teach computing to the local, elderly population.

But Mr Ominami just wanted Mr Terada to prove that a Tokyo-based IT company could have an office here. After Sansan's success, others followed in setting up remote offices in Kamiyama, which has a population of less than 5,000.

Image caption,
The school will open initially to 40 students

"It was exciting to see the town being rejuvenated," says Mr Terada. "I then started wondering what else I could do to contribute back to society and that's when I thought: education.

"I became an entrepreneur after graduating from university, but I don't recall learning any crucial skills that I needed to start a business at school."

To build the school Mr Terada has secured 2bn yen ($15m; £12m) in donations via a government system called furusato nozei or "hometown tax". Under this scheme, mid to high-earning big city dwellers can donate money to a rural region of their choosing in return for a reduction in their income and residency taxes.

More than 30 companies are also now financial supporters of the forthcoming school. These are mostly Japanese but there are also some international ones, such as accountancy giant Deloitte.

Image caption,
Tokushima is a quiet region, with forestry and agriculture being the main employers

Traditionally, young people in Japan choose to join a big established firm as a safe career path.

But Mr Terada says many are now far more entrepreneurial, and his plans have seen some big interest from prospective students, with more than 500 students from all over Japan attending briefings to find out about the first 40 slots.

The school is also committed to a 50:50 ratio of girls and boys, a step in the right direction in a country where men still dominate the start-up scene and the wider workforce.

"For many years, start-ups have had some disadvantages in Japan, but from now it will be changed," the country's former digital minister Karen Makishima told me.

"We will remove the regulations or the rules of analogue systems, and the emphasis will be given to these [digital] start-up companies. We are encouraging them to start not only from the cityside, but also the rural areas."

New Tech Economy is a series exploring how technological innovation is set to shape the new emerging economic landscape.

But while the government expects these new start-ups to be super high-tech, the country is also home to the world's oldest population.

Image caption,
Once a week, Mrs Sasaki waits with her friends for a truck to bring her groceries

As many things in Japan have been digitalised over the past two decades, the elderly - almost a third of the country - have been left behind.

"Oh no, no, I have no idea how to use a smartphone," 83-year-old Mrs Sasaki tells me.

I met her and her three friends a stone's throw away from the new entrepreneur school as they waited for a supermarket-on-wheels called Tokushimaru.

As the name suggests, this start-up, which offers a lifeline to thousands of the country's elderly, was also born in this area.

Image caption,
Tokushimaru trucks deliver food all over Japan

When it started 10 years ago, it only had two trucks locally. But today, with more than 1,000 vans on the road across Japan, it has annual sales of 20bn yen ($150m; £123m).

More than 90% of its customers are aged over 80.

Once a week, Tokushimaru delivery driver Junichi Kishimoto travels to Kamiyama with everyone's orders in his head.

"He remembers what I want to buy every week," says Mrs Sasaki. "He comes every Saturday, so if my grandchildren are coming on Sunday, I request something special."

For many of the customers, some of whom live alone after their partners passed away, it is a chance to hang out with their friends as they all gather outside in a group waiting for the van to arrive.

For the 38-year-old Mr Kishimoto, joining the company was more about helping the elderly rather than picking up a wage.

"I used to work at a nursing home and I realised some residents came to live there because they were worried about everyday food," he says. "I believe it is better for them to live at their own home, so I wondered what I could do to help and that's when I found out about Tokushimaru."

Image caption,
Junichi Kishimoto became a delivery driver because he wanted to help the elderly

The business idea came to the company's founder, Tatsuya Sumitomo, because of his own parents in their 80s, who were struggling with their daily groceries.

"When I started Tokushimaru, I knew that the market would grow for the next 20 to 30 years because there was definite demand, and the society wasn't providing any solutions," he says.

But the company is also moving with the times. It is testing an app that it hopes will become available within the next two years. Its rivals are catching up, and Mr Sumitomo is also aware that the next generation of customers are more tech savvy.

"The baby boomers in their 70s will soon become our main customers and they have better internet literacy, so we're combining our supermarket trucks with online shopping," he says.

Mr Sumitomo is a serial entrepreneur who has started many other businesses over the past 30 years.

He has high hopes for the new boarding school in Kamiyama as he sings the praises of local businessman Shinya Ominami. "For a rural town, one person can make such a big difference," he says.

Mr Ominami wasn't available to be interviewed when we were in Tokushima, but he and Chikahiro Terada of Sansan have a vision of turning Kamiyama into Asia's Silicon Valley.

That might be a little far-fetched, but one man's vision to reinvent his hometown by bringing in high-speed internet may have brought a much brighter future than it could have ever hoped for.

Watch New Tech Economy Japan on BBC World TV at 10:30 BST and 22:30 BST on Saturday, 27 August, and at 03:30 BST and 16:30 BST on Sunday, 28 August.