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The best connectivity in the world

Article - May 31, 2017

Japan has built an ultra-efficient transport system, where the train reigns supreme. By further enhancing both internal and regional connectivity, the country hopes to entice more visitors beyond the hotspots of Tokyo and Mount Fuji, as well as to boost commercial links with its fast growing neighbors in Asia

Japan was the first country in the world to operate high-speed trains, and the name with which they are known locally (Shinkansen) is a synonym for convenience, safety and reliability, and a metaphor for Japanese technological audacity. It is also a physical uniting force that gave the finishing touch to the country’s impressive post-war reconstruction–the first bullet train, operated by Japan Railways Group, saw the light as early as 1964.  

The Shinkansen has expanded apace and now runs on a network of 2,764.6 kilometers of lines with maximum speeds ranging between 240 and 320 kilometers per hour. The system has an almost untarnished safety record. No passenger fatalities or serious injuries have ever been reported as a result of accidents–an eyebrow-raising achievement if we consider that the railway carries around 420,000 passengers or more on a typical weekday.

The impressive numbers do not end there. Since its inauguration in 1964, approximately 5.6 billion people have used the Tokaido Shinkansen, which links Japan’s three largest metropolitan areas: Tokyo, Nagoya, and Osaka. These huge masses of passengers are very likely to arrive on time, as the average delay from schedule per train is just 0.9 minutes.

In a relatively small but densely populated country like Japan, high-speed trains are presenting fierce competition to airlines. In fact, it is possible to go from Tokyo to Osaka by train in just two hours and 22 minutes, which is virtually the same time that this route takes by air if one includes the time necessary to travel between airports and city centers as well as check-in and other inevitably time-consuming actions.

The Japanese authorities take pride in the Shinkansen system, but they know that this is a still-in-progress masterpiece. Last December, construction work began on the nation’s first magnetic levitation (Maglev) train line. The works, which are being carried out by Central Japan Railway Co (JR Central), involve major engineering challenges such as a digging a 25-kilometer tunnel between the Yamanashi and Shizuoka prefectures. Once in operation, the Maglev will reach a top speed of 500 kilometers per hour.

JR Central expects the Tokyo-Nagoya segment of the route to cost 9 trillion yen ($89 billion), with the extension to Osaka (to be completed by 2037, eight years earlier than planned) costing a further ¥5.5 trillion.

In the eyes of many foreigners, those volumes of money may look exorbitant, if not wasteful. In a country that is hard pressed by a shrinking and ageing population that may put unbearable pressure on public spending, isn’t it frivolous to invest such staggering amounts on a train network?

Sceptics may have a point. Their concerns are legitimate and backed by obvious if short-sighted fiscal reasons. But they are failing to understand what Shinkansen really means and ignoring that this train is a crucial feature of the nation’s identity, its iron backbone and a testament to the national engineering and technological glory.

Japan needs a psychological boost. The country may be losing people and international clout, and perhaps the ‘Made in Japan’ seal is a shadow of what it used to be back in the 90s; but its high-speed train system, which has been arousing the admiration of the world for half a century, will not be compromised.

Japan wants to keep its leadership intact and cannot afford its Shinkansen system to be dwarfed by high-speed train developments in other countries. It is no secret that being in the lead requires a volume of investments that is commensurate with the country’s determination to keep its crown.

Furthermore, the Shinkansen is the true symbol of a fully connected archipelago. It does not only serve the busiest metropolitan routes, but is increasingly reaching the country’s far-flung corners. Last March Japan opened its first bullet-train service to the northern island of Hokkaido, where stops include the ski resorts and the port city of Hakodate. The line, operated by the Hokkaido Railway Company (JR Hokkaido), is scheduled to be extended to the prefecture’s capital Sapporo by March 2031.

This new service will not only bring Hokkaido effectively closer to Japan’s most populated areas, but will also bring more local and international tourists to the island. The profitable ski industry stands a lot to benefit, and competition with airlines in that niche market is poised to intensify.

“We want Americans to get a better and deeper understanding of Japan as a country. Japan has more than Kyoto and Tokyo, there are other areas and smaller cities that have their own unique charm. By learning about the country through Japanese TV programs, they might come visit those areas and even enjoy the food and experience the local culture first-hand”

Shinji Takada
President, SKY Perfect JSAT

When speaking about the wonders of Japan’s bullet-train system, we often ignore the economic advantages directly or indirectly linked to it. However, the gains have been stunning: time savings alone from switching from a conventional to a high-speed network have been estimated at 400 million hours, which has an economic impact of 500 billion yen ($4.9 billion) per year. Furthermore, as the case of the Hokkaido Shinkansen suggests, high-speed trains are a boon to tourism, especially in remote areas where it used to be either too difficult or too expensive to go.  

The synergies between bullet train expansion and tourism are perfectly embodied by Tobu Railway, which is not only the second largest private railway company in the country, but also a major tourism operator which, among other sites, manages the iconic Skytree tower, a broadcasting and observation tower in Tokyo.   

“While the number of tourists is increasing, visitors tend to concentrate in the same areas, and so does their spending. They come to Tokyo, see Mount Fuji, go to Kyoto or to Hokkaido in the winter, and then they go home. The real question is how to effectively distribute and diffuse tourism in Japan on a broader basis”, says Yoshizumi Nezu, President of Tobu Railway Co.

Diversifying tourist destinations is a means of boosting the country’s least known areas and providing foreign visitors with a more unique experience. Mr. Nezu focuses on U.S.-Japan tourist relations and is confident that his company can help bring about balance: “There are 3.8 million tourists from Japan that visit the U.S. every year. However, there are only one million U.S. tourists that come to Japan. The number of tourists is unbalanced and this is a big mismatch, which we as a company would like to fix, so these numbers can come to parity.”

In his view, Japan will only unlock its full tourism potential if it gets visitors to go there multiple times. Japan, he says, wants tourists “to fall in love [with the country] and come back frequently”. Due to its geographical location, Japan is certainly a once-in-a-lifetime destination for most Western tourists, who mostly confine themselves to Kyoto’s blossoming cherry trees, Tokyo’s relentless urban charm or Mount Fuji’s postcard-perfect composure. But away from Japan’s best-known sites there is a wonderful country waiting to be discovered, and different areas of the nation can be explored during different trips to Japan.

Bullet trains are becoming an indispensable ally for visitors wishing to see all of Japan in a time-efficient way. However, the Shinkansen goes far beyond the national borders. The Japanese authorities have already exported the country’s railway technology and know-how to places like Taiwan, mainland China and the United Kingdom. In addition, Tokyo has pledged $2 million to help fund studies on the feasibility of a maglev train that could shuttle passengers from Baltimore to Washington within 15 minutes, and signed an agreement for the construction of India’s first high-speed rail link.

The country’s sole satellite communications operator, SKY Perfect JSAT, is the largest operator in Asia and Japan’s only provider of both multi-channel pay TV broadcasting and satellite communications services. President Shinji Takada believes his company can also support efforts to entice more U.S. tourists to Japan.

By exporting Japanese TV content, SKY Perfect JSAT could help disseminate a more in-depth knowledge of the country and its culture among foreigners, particularly in the U.S.  

“The Japanese government wants to be able to boost Japanese content and services penetration abroad to raise our competitiveness, either by re-broadcasting contents or by creating specific contents such as animations or game characters,” Mr. Takada says.

“We want Americans to get a better and deeper understanding of Japan as a country. Japan has more than Kyoto and Tokyo, there are other areas and smaller cities that have their own unique charm. By learning about the country through Japanese TV programs, they might come visit those areas and even enjoy the food and experience the local culture first-hand. We want to be able to entice them to do it.”

Extending connectivity beyond its borders
Another industry that illustrates Japan’s superb connectivity is logistics, which has the potential to spur growth and development outside the main service-centered cities and make the most of the nation’s coastal locations. At the same time, a re-energized logistics industry could foster the country’s trade with its fast-growing Asian neighbors, which could in turn revive the Japanese economy and mitigate the adverse effects of its shrinking domestic market.

In other words, Japan needs to use its formidable connectivity to secure a closer interaction with the Asian economies that are becoming the new engine of global growth. Hiromi Yamashiro, Chairman of RKK, a cooperate group of 14 logistics companies based in the southernmost part of the country, makes it very clear: “Japan needs to get more involved with other growing Asian nations and recover its vitality”.

RKK could help Japan do just that and, by the same token, develop a region that is far removed from the country’s economic hubs. Mr. Yamashiro explains it in a way that mixes past, present and future: “Learning the virtue of wisdom and courage from our ancestors, RKK would like to become glocal [that is, deep-rooted in its territory but capable of reaching overseas markets] and grow as a bridge between Japan, Asia and the rest of the world”.

Another  company mainly engaged in the logistics business, Seino Holdings, is also doing its bit to enhance trade links between Japan and its immediate Asian neighborhood. But its president, Yoshitaka Taguchi, believes that the country needs to think bigger: as a Pacific nation, the whole ocean must be Japan’s market.

The Trans-Pacific Partnership (TPP), a major trade agreement between Japan, the U.S. and other 10 Pacific countries that is yet to be ratified, looks like the way ahead for the nation’s economic renaissance and global rebranding. “As a result of the TPP, I believe that there will be a new brand established. There will be ‘Managed by Japan’ as opposed to ‘Made in Japan’,”Mr. Taguchi says.

The country is certainly undergoing a major transformation. Traditionally known for its sophisticated manufacturing and electronic sectors, it now must shift the focus to its unmatchable connectivity and unleash itself into a promising future.