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COMPETITIVE CITIES FOR JOBS AND GROWTH CASE STUDY Public Disclosure Authorized YOKOHAMA REINVENTING THE FUTURE OF A CITY COMPETITIVE CITIES KNOWLEDGE BASE TOKYO DEVELOPMENT LEARNING CENTER October 2017 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized © 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. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Directors or Executive Directors of the respective institutions of the World Bank Group or the governments they represent. The World Bank Group does not guaran- tee the accuracy of the data included in this work. Rights and Permissions This work is a product of the staff of the World bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, 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, all of which are specifically reserved. 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 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 Tobjective 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 Develop ment 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 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 Ywas 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.

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