To revitalize regional economies, the government has decided to encourage municipalities to jointly formulate regional growth strategies, government sources said.

Key regional cities will be tasked with establishing what the government is temporarily calling industrial competitiveness councils. Working jointly with neighboring cities, towns and villages, as well as universities, financial institutions and other companies, these councils will be in charge of promoting tourism, expanding sales channels for agricultural and marine products, and developing and manufacturing new industrial products.

From among the 61 cities in Japan with a population of 200,000 or more, the government will first designate some as “regional core cities.” Some of these core cities will start model projects from fiscal 2014 and more core cities will implement their projects in a full-fledged manner from fiscal 2015. Municipalities that will participate in the regional growth strategy scheme will be given extra tax allocations from the central government.

Though the nation’s economy has been improving thanks to Prime Minister Shinzo Abe’s economic policy, the central government’s pressing task is to steadily spread the favorable effects of the policy to regional areas.

Tokyo and other prefectural governments currently play a central role in promoting regional economies, such as through tourism. However, a central government official said, “It is difficult to produce favorable effects because funds are allocated thinly and widely across a prefecture.” Therefore, the central government has decided to make cities, towns and villages play a major role in promoting their regional economies.

The regional core cities will conclude tentatively called cooperation agreements with neighboring cities, towns and villages, and establish industrial competitiveness councils that will comprise officials from local companies and universities to jointly draw up a regional growth strategy, according to the sources.

In many cases, there are universities and research institutions in core cities that will be able to supply a variety of human resources from home and abroad to provide a foundation suitable for carrying out many tasks with municipalities.

The growth strategy will incorporate measures to revitalize the regional economy for the next several years.

The government plans to conduct model projects in some areas in fiscal 2014 and provide research expenses for municipalities to participate. In fiscal 2015, the projects will be expanded to about 20 areas and the government will provide municipalities with hundreds of millions of yen a year in extra tax allocations.

Cooperation between municipalities to revitalize regional economies has already been seen in some areas.

For example, the Fukuoka municipal government invites exhibitions and trade shows to conference halls in the city and guides visitors to restaurants and hotels in neighboring areas.

The Hamamatsu municipal government is developing advanced medical devices jointly with small and midsize enterprises and universities in neighboring cities and towns.

The government aims to promote these kinds of movements to other parts of the country and plans to submit to the ordinary Diet session to be convened later this month a bill to revise the Local Government Law.