A Farsighted Approach to Local Revitalization (1)

Japan faces an aging society and low birth rate with a population which peaked at 128 million in 2008 before persistently declining. The population outflow from regional to metropolitan areas, coupled with young people and women increasingly abandoning their hometowns, leaves local areas with a critical labor shortage. The Japanese government responded with a 2025 update on its Regional Revitalization 2.0 initiative, viewing regional areas as growth drivers and highlighting metropolitan/regional exchange while developing an infrastructure for incorporating AI and digital technology.

The Yokogawa Future Co-creation Initiative engages in dialogue with diverse stakeholders to envision the ultra-long-term future through scenario planning. Future Scenario 2040, the company’s white paper released in 2025, notably and proactively includes regional as well as metropolitan perspectives.

This interview features Future Co-creation Partner Hitoshi Nakaya, Secretary General of the Matsuyama Chamber of Commerce and Industry. The core city of Matsuyama in Ehime Prefecture—the largest city on the island of Shikoku—is grappling with a shrinking population. Nakaya, who is engaged in economic-centered local revitalization, shares his views on the future of core cities.

*Insights shared in this dialogue are personal and do not represent those of any organization.
*Affiliations and positions are current at the time of this writing (September 2025).
*The interview was conducted at MIRAI LAB PALETTE (MLP).

A bridge between local businesses

Chambers of Commerce and Industry are member-based economic organizations comprised of local commercial and industrial entities. Their history traces back to guilds created by merchants in Western cities which continued from the Middle Ages to recent times. Eiichi Shibusawa, dubbed modern Japan’s “Father of Capitalism,” founded the nation’s first chamber in 1878 in Tokyo. Today, chambers exist in Matsuyama and other cities across Japan.

Currently, Matsuyama’s Chamber of Commerce and Industry has about 6,000 corporate members and is led by Nakaya, who has been its Secretary General for six years since the age of forty-four. He has broadened his efforts to spur local businesses and the local economy by promoting management support for small and medium-sized enterprises (SMEs), events, digital transformation, and government lobbying.

Nakaya was born and raised in Matsuyama, a city with a long history and deeply rooted traditions. He shared his thoughts on safeguarding the city’s charms and tackling the issues Matsuyama faces.

Japan’s “most livable rural city” faces a population decline

Matsuyama and its towering Edo-period castle keep, a legacy of Japan’s feudal past, overlook the beautiful Inland Sea. The city is home to innumerable tourist attractions, including the roughly 3,000-year-old Dogo Onsen, known as one of Japan’s three great ancient hot springs. Matsuyama is especially popular with inbound visitors from South Korea and Taiwan. We asked Nakaya why he thought Matsuyama was chosen as Japan’s most livable rural city in 2024.

Matsuyama Castle

Dogo Onsen hot spring

“Matsuyama is near both the sea and mountains and is blessed with the gifts of nature, a rich local cuisine, and a wealth of history and culture. The city offers a low cost of living, a mild climate, and relative freedom from natural disasters. Everything one needs—from academic institutions and medical facilities to shopping—is compactly situated. For example, most Chamber of Commerce employees have a commute of 15 minutes or less.”

Yet Nakaya feels a sense of crisis: Even a city this popular is losing its population—particularly younger residents—and he identifies the absence of core industries with promising growth prospects as one cause.

“Matsuyama has a plentiful tertiary sector and an abundance of SMEs but lacks core industries capable of supporting a population of 500,000 in the long term. The economy is stable thanks to inbound tourism, but an outflow of younger residents to Tokyo and other metropolitan areas has left us with a serious labor shortage. Recently, the wage gap between metropolitan and regional areas has widened, further spurring the population outflow.”

However, because change is gradual, citizens feel little sense of crisis.

“The elementary school population is half of what it was 20 to 30 years ago. Yet the population decline is happening so slowly that it goes unnoticed. A major issue is that locals assume their jobs and lifestyle will remain unchanged indefinitely.”

Amassing and analyzing “setback data”

As part of their Chamber of Commerce and Industry activities, the members and Nakaya have traveled around Japan searching for ways to revitalize local communities, meeting and speaking with some 2,000 people each year. However, as the manufacturing employment model is transitioning nationwide, they have yet to find sustainable examples for use in regional core cities.

“Major domestic manufacturers have increasingly withdrawn from regional areas, pursuing factory consolidation and downsizing. Nationwide, the conventional model of boosting income through manufacturing is changing.”

What is Nakaya doing to help resolve this issue?

“At present, it’s important to collect as much information as possible on setbacks—that is, on approaches that did not succeed. I’m collecting and analyzing this information from the local areas we visit. Our Chamber affiliations have fortunately generated a warm welcome from open-hearted people who willingly share this negative information—something that is not normally made available.”

Future-oriented views are also invaluable.

“From a global viewpoint, it is important to recognize what the very far future holds. In 2022, the Chamber forged a 30-year vision for Ehime. Now, using the scenario planning we learned from Future Co-creation Initiative colleagues, we hope to create a future scenario which is neither optimistic nor pessimistic, but rather moderate and sustainable. And I’d like to share that with the people of Matsuyama. Since major change often triggers a negative response, I think accruing results through smaller initiatives would effectively yield sustainable development for core cities.”

*Continued in Part 2