The Trends and Success of Local Satellite Offices in Japan
[May 05, 2021] BY Worker's Resort Editorial Team
The Japanese government’s support of local satellite offices
Satellite offices can be categorized as urban, suburban, or local, depending on the area in which they are located. Recently in Japan, more and more companies are considering setting up satellite offices not only in cities and suburbs but also in local or rural areas. From the angle of business continuity planning (BCP), this is appealing to some companies as they can decentralize and relocate to areas with less risk of COVID-19 infection, as well as employ those who wish to work in rural areas.
Aiming to revitalize the countryside, Japan’s Ministry of Internal Affairs and Communications (MIC) and Ministry of Land, Infrastructure, Transport and Tourism (MLIT) have been focusing, even before the outbreak of COVID-19, on encouraging companies with headquarters in cities to open satellite offices in rural areas. Since the worsening of the pandemic, the government has also increased subsidies to establish local satellite offices in order to accelerate decentralization and relocation.
In this article, we will discuss the trends of Japan’s local satellite offices and introduce several successful examples.
70% of Japan’s local satellite offices are permanent
According to a document put together by the MIC, titled “Results of a Survey on the Establishment of Satellite Offices Involved With Local Governments,” the number of satellite offices backed by local governments totaled 654 as of the end of fiscal year 2019, before the start of the pandemic. Of the 223 locations that responded to the survey, 73% were permanent offices with full-time staff, and 25% were cyclical offices used on a short-term basis without full-time staff. 80% of the offices were in the information services industry, such as software development and web production.
According to the document, Hokkaido Prefecture has the largest number of offices with 74. This is followed by Tokushima Prefecture with 67, Okinawa Prefecture with 52, Miyagi Prefecture with 50, and Shimane Prefecture with 45. Areas rich in nature seem to attract the most offices.
On the other hand, Osaka and Shiga prefectures in the Kansai region have no satellite offices, while Kagawa prefecture in the Shikoku region and Mie and Toyama prefectures in the Chubu region have just one, indicating that the levels of enthusiasm differ by prefecture. In some cases, local governments are not involved in the establishment of satellite offices, so the actual number is estimated to be larger than these figures.
Advantages of Local Satellite Offices in Japan and Examples of Clusters
There are several notable benefits of having local satellite offices. We will look at these as well as the case studies in Tokushima, Shimane, and Wakayama prefectures, which have attracted a large number of satellite offices despite having small populations and cities.
1. Traditional house turned satellite office: Kamiyama-cho, Tokushima Prefecture
Tokushima Prefecture has one of the best high-speed broadband connections in the country, and thanks to the prefectural government’s support, satellite offices are clustered in several areas, including Kamiyama-cho, located in the mountains. Sansan, a Japanese cloud business card management service, was the first to open a satellite office there in 2010 (official operation started in 2011). As of the end of 2019, 14 companies have established satellite offices in Kamiyama-cho.
Sansan set up its satellite office as part of its efforts to explore new ways of working. The idea to use a traditional house was received positively, and the company earned an award at the 12th Telework Promotion Awards sponsored by the Japan Telework Association.
The employees who work at the satellite office cite, “no crowded train commute,” “refreshed body and mind,” and “improved concentration” as advantages of working there. In addition to the permanent employees, the office is used for department training, temporary stays for intensive development, and new employee training. Sansan has grown rapidly with its online sales technique and even went public in 2019. Some reports suggest that teleworking from satellite offices has played a major role in establishing this sales style.
In addition to Sansan, other Japanese companies such as PLAT EASE, a video company, and Sonorite, an online fundraising system, have opened satellite offices in Kamiyama-cho, using other old traditional houses. In addition, as of October 2018, there were more than 15 companies using the co-working space Kamiyama Valley Satellite Office Complex.
New restaurants and lodging facilities, mainly serving satellite office employees, have opened as a result of the growing number of satellite offices. This has created a virtuous cycle of improving the quality of life of the workers and making it easier to attract more offices.
2. Hiring local satellite office personnel: Miyoshi-shi, Tokushima Prefecture
Companies like Japanese human resource evaluation company, Ashita-Team, have set up satellite offices in Miyoshi-shi, and actively work with the local community and hire locally. Ashita-Team currently has four satellite offices across Japan, the first of which was “Miyoshi Land,” which opened in Miyoshi-shi in 2013.
The company’s main purpose in establishing the satellite offices was to improve its operational efficiency. As for the results, Kyosuke Takahashi, the company’s chairman and representative director, said, “By centralizing operations at the satellite offices, we were able to streamline our sales activities at the head office and increase our productivity.”
Ashita-Team also recruits students from local high schools with the goal of reaching 100% local employment. In 2017, the company received the Tokushima Prefecture Regional Informatization Award (e-Tokushima Award) in recognition of its contribution to the creation of local jobs. In addition, in October 2020, the company partially changed its refreshment leave system (special leave given for mental and physical recuperation) to promote workcations at its satellite offices, and plans to gradually expand this system beyond Miyoshi Land.
In Tokushima Prefecture, in addition to Kamiyama-cho and Miyoshi-shi, Mima-shi and Minami-cho are also welcoming satellite offices. AWAE is one organization that has played a central role in bringing satellite offices to Minami-cho, where 20 have already been set up. The president, Motoharu Yoshida, says that the appeal of working in a rural area is that “you can fish in the morning and then go to work, plus you can go home for lunch and have dinner with your children.”
3. Programming languages are the heart of IT satellite offices: Matsue-shi, Shimane Prefecture
Matsue-shi has been calling itself “Ruby City MATSUE” and has attracted more than 30 IT companies with the programming language “Ruby” as its core. It aims to encourage companies to exchange information amongst themselves and with the local community, and has been effective in employee development.
The “Ruby City MATSUE” project was born from the fact that Yukihiro Matsumoto, the creator of Ruby, lives in Matsue-shi. IT engineers regularly network at the “Matsue Open Source Lab,” established by the city in 2006, and at satellite offices.
Matsue-shi started introducing Ruby classes to some of the city’s junior high schools in 2012, and by 2016, it expanded to all of the city’s junior high schools. Given the many programming language courses hosted by corporations, some engineers have noticed the city’s potential and moved to Matsue-shi.
The programming-centric IT satellite offices are certainly unique to the city. The RubyWorld Conference, an international conference for Ruby, is held there every year (it was online in 2020), and it seems that Matsue-shi will continue to grow.
4. The Pioneer of Satellite Offices: Shirahama-cho, Wakayama Prefecture
Shirahama-cho is a pioneer in the establishment of local satellite offices in Japan. As of September 2018, 14 companies, including Salesforce.com and NEC Solutions Innovators, a Japanese company that provides system solutions, have set up satellite offices in facilities operated by the town.
Related article: Workcations in Japan: Success Stories and Future Outlooks
Salesforce.com was the first to set up a satellite office in Shirahama-cho. It chose this town due to its easy access to the company headquarters in Tokyo as well as the local government’s initiatives, such as IT infrastructure development. When the satellite office was opened in October 2015, it was part of MIC’s “Hometown Telework Promotion Regional Demonstration Project.” The satellite office has continued to operate since the project’s conclusion in March 2016.
Aiming to bring in more satellite offices and increase its population, the government of Shirahama-cho is also putting a lot of effort into workcations. In 2019, Mitsubishi Estate opened a workcation office in Shirahama for its business tenants. In November 2020, a privately-owned satellite office building, ANCHOR, opened with the support of both the prefecture and the town. It has also been selected as a trial location for a workcation program for central government employees.
The establishment of permanent local satellite offices starts with cyclical use
The MIC’s survey data introduced earlier shows that local governments benefit from having companies expand locally in several ways, including an increased number of both temporary and long-term residents, the creation of employment opportunities for local people, and the utilization of vacant houses and stores.
For companies, the benefits include the implementation of work reforms, the ability for employees to focus and be creative without a stressful commute, the ability to secure excellent talent, and the assurance of business continuity. With regard to obtaining new talent, satellite offices have been effective in recruiting not just local but also U-turn (those who grow up in the countryside, move to the city for work, and eventually return to their hometown) and I-turn (those who move from the city to the countryside for work) candidates. In some cases, such as in Matsue-shi, companies with satellite offices have greatly benefited from the ability to exchange ideas, and it is expected that new businesses will be created through collaboration with local companies.
Even if there is high interest in local satellite offices, it is difficult for companies to choose the right permanent satellite location with full-time staff. The trial satellite and workcation offices, which Japan’s MIC has been heavily involved in, are necessary so companies can first build relationships with the local communities before eventually establishing permanent satellite offices.
Writer of this post
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