Regional Development with Local Firms Which Use Regional Resources

Author Name NAKANISHI Hodaka  (Senior Fellow, RIETI) /SAKATA Junichi  (Tokyo Institute of Technology) /SUZUKI Katsuhiro  (Waseda University) /HOSOYA Jun  (Waseda University)
Creation Date/NO. March 2013 13-J-017
Research Project Research of a Mechanism for Regional Revitalization
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The approach of regional development with local resources has become popular in recent years, but most of the business activities using local resources are small in scale and their effects on regional economies are not clear. In order to take measures for the development of regional economies with local resources, it is necessary to show the growing process of local firms with local resources. Local firms are categorized by geographic relation with customers and suppliers into four types: 1) local production for local consumption type, 2) local firms growth type, 3) consuming area location type, and 4) inter-regional type. Based on the category, we presented a model of economic development with regional resources, in which local production for local consumption type firms, which started their businesses with regional resources, have enlarged their scale and extended their markets to outside of their areas and have become local production for local consumption type firms or even inter-regional type firms.

Firm activities of each type are analyzed with company data from Tokyo Shoko Research and the patent data. In the Tohoku area, companies introduced from outside of the region rank highly in sales. On the contrary, the activities of local firms which use regional resources in the Setouchi area are active as well as their innovation activities. Creation of new local technologies by local firms growth type firms and inter-regional type firms funded by local capital are active as well. The difference of firm activities by firm type is conformable to the deference of the economic situation between the Tohoku area and the Setouchi area.

It is important to promote the innovation activities of local, small local production for local consumption type firms selectively, support them to expand their activities outside of the area, and develop them into local production for local consumption type firms or inter-regional type firms, as well as to support their use of regional resources.