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In Japan the concentration of population and businesses in the Tokyo area has become intense, and the share of economic activities in the Chubu area as well as its neighboring regions has been on the rise. On the contrary, outflows of people and companies’headquarters from the Kansai area have been a continuing phenomenon, resulting in the area’s strikingly lowered economic status. The first objective of this article is to organize and present an overview of factors of the stagnant economic situation of the Kansai area, taking into account some concepts from the field of regional economics. Specifically, reasons behind the outflows of population and manufacturing facilities from the Kansai area are examined by focusing on the migration of residents and relocation of manufacturers between the Kansai area and other regions and by surveying the regional economic system of the area.
The second objective is to propose a policy direction aiming to improve economic conditions of the Kansai area, with the aforementioned factors of the area’s stagnant economy in mind. As the population ages while the number of children declines, improving per-capita labor productivity is a key to a greater productive capability of the area. As policies to be taken for the Kansai area, this article discusses investment in research and development, the improvement of the quality of human capital, and the creation of a suitable environment for strengthening competitiveness.
Despite the fact that the causal analysis in this article is qualitative and falls short of comprehensively covering the potential solutions to the numerous issues accumulated in the Kansai area, the author hopes that this article offers meaningful suggestions that would lead to the resurgence of the economy as well as enhanced international competitiveness of the area.