1Narrowing the “digital divide” between urban areas and peripheral areas through information and communications technology (ICT), represented by the Internet, is one of the most important research subjects regarding the geography of information. Using the expression “connecting traditional space and digital space”, Paradiso (2003) points out, for example, that it is important to introduce various existing resources from peripheral areas to consuming regions (consumers) via the Internet, Similarly, Lorentzon (2003) argues that the development of ICT infrastructure plays an important role in enhancing production function and service provisions in peripheral areas.
2In particular, in advanced countries, where the development of domestic broadband networks has been underway since the 2000s, regional differences in accessibility and in the ability to use to such networks are recognized as a new “digital divide” (Labrianidis, and Kalogeressis, 2006, Arai and Naganuma, 2010). Therefore, developing a broadband network in peripheral areas in advanced countries is becoming an important political task, and these countries are impelled to develop such a network in relation to the national minimum infrastructure. Since the middle of the 2000s, with the aim of the improvement of accessibility to broadband networks, there has been an increasing number of studies focusing on the multifaceted analyses of examples in which ICT was effectively used in peripheral areas, and such work includes “Quantitative Understanding of ICT Utilization” (Ramirez and Richardson, 2005), “SMEs in Rural Communities and Launch of Telework” (Grimes, 2003, Moriset, 2011), and “Expansion of Emergency Medical Service Support Systems” (Jones, Carr and Dalal, 2011).
3It is also pointed out by some researchers that the societal exclusion of such communities regarding the offering of such new technology, as well as digital exclusion in terms of hardware (Malecki, 2003, Warren, 2007) strongly affect the problems of the “digital divide” which are apt to arise in rural and remote communities. In response to such problems, Stratigea (2011) states that in the process of evaluating policy for introducing ICT in rural communities it is important to shift to a policy paradigm for breaking barriers to adaptation to ICT, barriers that have been deeply rooted in these communities.
4The idea of expecting the spread of ICT - the “informatization” of the social economy - to be a trigger to stimulate peripheral areas became common in Japan in the late 1980s. It is the trend of so-called “local informatization.” In this period, the central government of Japan introduced various policies regarding “local informatization” in relation to land development policies, such as the Fourth Comprehensive National Development Plan. Generally, these policies had the objective of “facilitating the distribution of information in local communities by introducing (and utilizing) new media and information/communications systems in many aspects of local society so that the ability of the local communities to transmit information is enhanced, and so that the regional information imbalance is corrected, with an overall aim of evenly developing national territories” (Arai, Hashimoto, Nakamura, and Sato, 1998). Thus, the policies included a wide variety of goals: not only industrial development, but also the establishment of local communities; the even development of regional medical and welfare systems; the enhancement of administrative services; the introduction of personal computers into educational institutions; and the improvement of disaster protection. However, many of such policies suffered from the drawbacks of their focus on construction, such as excessive investment in material and system development, as well as ambiguity in their intentions. The effects of these policies were therefore limited.
5Since the latter half of the 1990s, while new ICT services such as the Internet and mobile phones were rapidly spreading in Japan, regional imbalance regarding the access points that the Internet provides, as well as mobile phone connection, has been gaining attention as the “digital divide.” However, since the 2000s such regional imbalances are gradually being corrected as broadband Internet spreads to peripheral areas and more people are arguing that the Internet can be used to stimulate areas with a declining population. For example, the Committee for Depopulated Areas raises the “development and effective use of information and communication bases” as one of their seven goals for depopulated peripheral areas, declaring its expectation of results from the introduction of broadband Internet on the development of depopulated areas (Miyaguchi, 2008). In fact, while many regional governments opened their official websites starting from around 2000, it is worth noting that the governments of the peripheral areas were particularly active in releasing their information on tourism and local products at an early stage (Arai, 2007). On the other hand, because the “digital divide” has been corrected on a material-related level, by access to broadband Internet, the regional imbalances on the organizational level (such as the ability to make the most of informatization, strategies to transmit information, and communication methods) have become more evident. This problem cannot be explained by a simple dichotomy between central and peripheral areas, but involves a wider and more comprehensive framework, including the effective use of local resources and the development of human resources.
6Being aware of such problems, this report examines the leaf business of Kamikatsu-cho in Tokushima Prefecture, which succeeded in establishing an agri-business by connecting elderly people and local resources through the Internet in a peripheral area in Japan that had been suffering from an aging problem. The subject of this study has novelty-value not only as a business model of an SME that aims to distribute the autumn leaves abundant in rural communities for displays in urban restaurants, but also because the elderly people use PCs for shipment management and market forecasts. In particularly the latter respect, the business can be positioned as an example in which rural communities with many elderly people have overcome social barriers when their elderly people accept ICT, something which is pointed out by both Malecki (2003) and Stratigea (2011).
7Kamikatsu-cho in Tokushima Prefecture is located in a mountainous area 40 kilometers southwest of Tokushima City, the prefectural capital. Tokushima Prefecture is located in the southeastern part of Shikoku, an island consisting of four prefectures, and is connected to the mainland of Japan by several bridges. It is about two hours by car from Osaka, the main city of western Japan (Figure.1).
Figure 1 - The location of Tokushima Prefecture and Kamikatsu-cho
8Kamikatsu-cho is spread out on an inclined plane at 100–700 meters above sea level, and it is a typical mountain village with 55 households scattered over a total land area of 109.7 square kilometers. A total of 85.6% of the town is forested, the majority of which was grown from the artificial planting of Japanese cedars (Figure.2.). However, the price of timber dropped, due to imports of lumber, and therefore, it is almost non-functional as an industry for creating employment. Furthermore, the population of Kamikatsu-cho has been declining every year since 1955 - when the town had the largest population of 6,265 people - and as of April 2010 there were only 2,000 inhabitants.
Figure 2 - The landscape of Kamikatsu-cho. March 2010
9The declining ratio of its population over the past 45 years is 68%. Moreover, the population ratio of those who are 65 years-old and over was 52.3% in 2010. Therefore, we can say that Kamikatsu-cho is a small mountain village with a rapidly declining and aging population (Figure.3).
Figure 3 - Demographic change in Kamikatsu-cho
Source : Basic Resident Register of Kamikatsu-cho
- 1 The Japanese word "Irodori" has two meanings: colorful and fulfill. A film can be referenced here, (...)
10Kamikatsu-cho has made a success of its leaf business, in which mainly elderly women collect colored leaves in autumn and ship them to restaurants in urban areas as materials for seasonal decoration (tsumamono). The main leaves are maple, persimmon, ginkgo, and pine needles; these are very famous trees which produce autumnal leaves in Japan. Traditional Japanese cuisine is often presented in tandem with seasonally colored leaves, in order to balance the colors of the dish, as well as to add a seasonal touch to the cuisine itself. In Kamikatsu-cho, which sits at a high altitude, leaves change their colors earlier than nearby larger markets such as Osaka and Kyoto, thus it can provide colored leaves ahead of season. Furthermore, fallen leaves are light, and it is easy for elderly people to handle this as a side business - a fact that also contributed to the success of the business1.
11The leaf business in Kamikatsu-cho was introduced when satsuma oranges, the town’s main agricultural product, were seriously damaged by an extraordinarily cold winter during 1981/1982. After this, the town started considering the diversification of the risks involved with their agricultural products, and as a result, the cultivation of shiitake mushrooms was introduced in 1984. In 1985, Yokoishi Tomoji, a staff member of the agricultural cooperative association of Kamikatsu-cho, visited Osaka for the sales promotion of the town’s agricultural products, including shiitake mushrooms, and when he saw tsumamono decorating a dish at a local restaurant in Osaka returned inspired to start a leaf business led by elderly people. He established it as a business in 1987 under the name of “Irodori” (a Japanese word for “coloring”). Sales of the Irodori business were only $14,500 in the first year, but this business model was evaluated positively due to the fact that elderly women could receive a cash income by collecting fallen leaves. In 1990, Irodori received the Asahi Agricultural Award, which is given to organizations that have contributed to the development of either a new agricultural model or a local community. Irodori originally started as a business venture of the agricultural cooperative association, but it became independent in 1999 as Irodori Co. Ltd., a semi-public corporation funded by both the town and the agricultural cooperative association. In 2009, its sales reached about $3.75 million (Figure.4).
Figure 4 - Total sales of ‘Tsumamono’ by Irodori Co. Ltd
Source: Irodori Co. Ltd.
12The leaf business is based on the structure by which Irodori Co. Ltd. enters into an agreement with local farmers in the town such that each farmer collects fallen leaves to the furthest extent possible in accordance with the orders made by Irodori. Each farmer then delivers the leaves to Irodori by the specified time. In this framework, there are four important factors: 1) fairness in sending orders to the farmers; 2) strict quality control; 3) independent management of products and shippers; and 4) monitoring the trend in market prices.
13Leading the business, Irodori decides the shipping amount for the day by 10 am, based on the order amount by major consumers as well as on the sales trend from the consumer market of the previous day (Figure.5). Next, Irodori sends the order information by fax and e-mail to all the registered farmers at 10:30am. Having received this information, farmers contact Irodori by phone or by e-mail to report which product they can collect by noon. At the time of this report, Irodori and the farmers then enter into an agreement. Having received the order information, farmers collect leaves according to the kind, size, and amount specified in the order and finish packing them by noon to deliver them to a pick-up facility.
14At the pick-up facility, the quality of the product is checked, and all the leaves with faded colors or worm-eaten leaves are all removed. The quality of the product is strictly controlled in order to maintain Irodori’s good brand image. The products that have passed the quality check are labeled with two barcodes to specify the producer and the product name. The system used to manage products by name and producer using barcodes was introduced in 1997, following the same system used by the major Japanese convenience store chain Seven-Eleven Japan. The products are then shipped to 42 wholesale markets all over Japan, from Hokkaido to Kyushu. The products are shipped by air to distant areas, such as Hokkaido, Tohoku, Kanto, and Kyushu, and are delivered by truck to relatively close areas, such as Kansai, Chugoku, and Shikoku, so that they arrive in time for the early morning auction held at the wholesale market of each region the next day.
Figure 5 - Business cycle of the leaf business
15In Kamikatsu-cho, 194 farmers supply leaves to Irodori as of March 2010, and the majority of the producers are elderly women (Figure.6). The Irodori business focuses on the skills of women - the potential of which had not been utilized sufficiently in Japanese agricultural villages.
Figure 6 - Elderly women have an important part in the leaf business
Source: Irodori Co. Ltd http://www.irodori.co.jp/asp/nwsitem.asp?nw_id=2&design_mode=0
16The company anticipated that their diligence and strong will to achieve goals, as well as their highly competitive nature, would all contribute to the leaf business. In the early years of the leaf business in the 1980s and 1990s, farmers used to receive orders from Irodori by fax and collected the leaves daily following these orders. However, despite having seen a trend in the market such that orders tended to concentrate in the season of colored leaves from autumn to winter, the collection plan to make use of the town’s altitude difference of nearly 600 meters and the move from the highland areas (where leaves change their colors early on) to the lowland areas (where leaves change their colors later) was insufficient. Irodori therefore made capital investment into a system similar to greenhouse horticulture, in which the coloring of the leaves is artificially brought forward or delayed using greenhouses. As a result, Irodori established a system to supply popular products for about two consecutive months.
17In Irodori’s business, the sales volume and the sales ranking of each farmer in the town are sent to the farmers by e-mail and fax, in order to enhance farmer motivation. As of 2010, the highest annual sales achievement of an individual farmer was $125,000, with several farmers enjoying sales of $50,000–60,000. Even so, the average annual income of the 194 farmers is $16,752. Thus, in tandem with primary income obtained through agriculture and the pension system, this enterprise functions sufficiently as a side business that can allow elderly people to live a comfortable life in rural areas.
18The Irodori Kamikatsu-cho leaf business is known for its catchphrase, performed by elderly women: “Magic that converts fallen leaves into cash income.” However, in reality, what supports the business model of Irodori is its highly developed information system (Figure.7).
Figure 7 - The Business Information System of Irodori Co. Ltd
19The information system of Irodori is categorized into four main functions:
collecting and delivering real-time information from the wholesale markets;
forecasting the amount of demand by analyzing past market trends;
sending information regarding orders, market trends, and demand forecasts to all the farmers at the same time; and
releasing information to the market. All these functions are connected and cooperate online through the Internet. Furthermore, Irodori engaged in the development of its interface by introducing trackball computers that are easier for elderly people to use, as well as a barcode system to allow for the easy verification of the producers and product names.
20Irodori has a system for receiving information regarding daily sales and market prices from all the 42 wholesale markets to which it ships products. Each wholesale market always has an officer who has a contract with Irodori; this officer monitors the trends of the auctions for Irodori products every morning. The monitored information is then categorized into different sections, such as by product name, the number of shipped packs, the unit price of each pack, and the total sales volume. This information is then sent in real-time to Irodori by e-mail.
21The market trend of the day, collected from all the wholesale markets in Japan, is an important piece of information for Irodori and is used to forecast future demand. The market share of Irodori is high, as it is an innovator of the tsumamono business. Through wholesale markets in particular, it accounts for about 90% of the total market in the country. It is thus practically possible for Irodori to control the national market price by adjusting the shipping amount of its products. For example, when the market price falls due to an excessive supply, Irodori can raise the market price by restricting its shipping amount. Conversely, on weekends and on “lucky” days on the Buddhist calendar, when an increase in demand is expected, it can also seize market opportunities by increasing its shipping amount. Such forecast of demand is reflected on the daily order amount to be sent to farmers, which is decided at 10 am each day.
22Besides the daily order information sent from Irodori to contract farmers by fax and e-mail at 10:30 am, farmers can also access the Irodori website to check the real-time information on the market, along with the demand forecast, the accumulated monthly sales amount of each farmer, and their sales ranking (only one’s own ranking). Since access to such information leads directly to income for the farmers and enhances their motivation, the number of the farmers who use a personal computer has been increasing. In 2010, 136 farmers out of 196 used a personal computer with Internet access.
23On the other hand, it is a heavy burden for Kamikatsu-cho to bear the cost of developing an IT infrastructure, as it has a large land area with a low population density and is located in a mountainous area. However, receiving information in real-time is an essential element for ensuring the fairness of trading between Irodori and contract farmers. In order to solve this problem, Irodori started sending information by fax in 1992, using the disaster prevention radio communications system that all households are equipped with. Although the regulations at the time prohibited the use of the disaster prevention radio communications system for other purposes than emergency evacuation advice in case of natural disaster, the town office of Kamikatsu-cho made an exception to the rule for Irodori. Also, in 2007, personal computers were connected to the Internet through a fiber-optic network that was developed in the town in 2005, in preparation for the digitalization of terrestrial television (scheduled for July 2011). Irodori is also engaged in cutting costs for servers and databases by using the computer server in the Kamikatsu-cho town office. Thus, Kamikatsu-cho and Irodori have contributed to efforts to solve the so-called “one last mile problem” by making use of existing information devices and communication circuit networks developed for other purposes.
24As the leaf business commercializes natural resources, there is no guarantee of securing the supply amount expected by the market and major consumers. Thus, Irodori has developed a system in which it can gauge the expected shipping amount based on the acceptance of orders by contract farmers, and it can immediately report to the market and its customers in case the expected shipping amount is below the ordered amount. This system for sending shipping information has enhanced the trust of both market and customers, and has contributed to the enhancement of the brand image of Irodori’s leaf business. This is in addition to the high quality ensured through strict quality control as well as the slogan of “giving more purpose to the lives of elderly women.”
25It is a challenge for elderly people to input data with a keyboard when using a personal computer. Irodori has thus developed a personal computer that can be operated using a trackball, along with software that enables input by clicking on Japanese letters without using the Western alphabet. It is also important regarding sales control and complaint-handling to have a system that can clearly identify “who” shipped the leaves. Therefore, Irodori distributes barcode labels with an identification number to each farmer in advance, and it is obligatory for them to place the label on their products before shipment. This identification procedure utilizing barcodes is highly valued, not only by the customers but also by farmers, as it does not add a heavy burden to their work.
26The superiority of the Irodori leaf business as a way to stimulate peripheral areas can be characterized by the following four points. Firstly, it succeeded in commercializing an “ordinary object” abundant in agricultural villages, namely “colored leaves,” by connecting them to urban demand for tsumamono. It was originally a task for cooks to collect tsumamono before the opening of their restaurants. However, in urban areas with little available nature, it is not easy to collect leaves that can give a sense of the season matching the menu of the day. It can therefore be said that the success of Irodori lies in the fact that Yokoishi, the founder of the business, focused on the “dormant resources” of agricultural villages from the viewpoint of actual demand in urban areas.
27Secondly, it has been successful in maintaining high competitiveness over other areas attempting to follow the same business model, by turning ordinary leaves into a brand through ongoing quality control and information management. With this sort of business model, the innovator of the model who makes an early investment often ironically fails to recoup the investment later because of the rapid increase of followers which creates excessive market competition. Irodori has created a manufacturing system for its natural resources that reduces the risk for customers; this system entails the standardization of the products through quality control as well as an advance reporting system - in case the ordered amount is unable to be supplied. Irodori thus maintains a market share of nearly 90% and is positively influencing the marketing of other agricultural products of Kamikatsu-cho. For example, annual sales of shiitake mushrooms produced in Kamikatsu-cho are about $6,300,000, exceeding that of leaves (tsumamono); this is because Kamikatsu-cho uses the catchphrase “shiitake mushrooms from the same village as the leaves” as their promotion strategy, making the mushrooms famous and thus maintaining a stable price.
28Thirdly, it succeeded in providing an important role for elderly women, who had previously not played a main role in economic activities. In conservative Japanese agricultural societies, in particular, there were few opportunities for women to play an important role economically. Irodori enhanced the vitality of elderly women and contributed to the stimulation of an aging region by giving them an opportunity to have their own role, obtain their own income (not for the household), compete with other producers, and conceive their own strategies for that purpose. The health care costs for elderly people per person in Kamikatsu-cho are currently the lowest in Tokushima Prefecture, and the effect of the Irodori business has been pointed out as one of the reasons for this.
29Lastly, it succeeded in proactively developing other businesses based on the funds and business motivation raised by the leaf business. Kamikatsu-cho and Irodori are currently involved in the introduction of products other than leaves, such as the development of tourism (the development of accommodation facilities with hot springs), biomass projects, recycling businesses, and so on. It is expected that these businesses will lower the ratio of elderly people in the town by creating employment and hiring young people.
30On the other hand, however, there are still some challenges for the Irodori business. The saturation of the tsumamono market is one of them. The market share of Irodori has already been nearly 90 percent, and the share is not expected to expand. Therefore, in the future, it is necessary for Irodori to consider joining markets for products with lower unit prices, such as Japanese traditional sweets and popular restaurant chains, in addition to the Japanese restaurants that buy tsumamono for higher prices.
31It is also problematic that the leaf business has not been passed onto younger generations. The number of young people who wish to work in Kamikatsu-cho has been increasing, due to the success of the leaf business, and Irodori has also created opportunities for young people to settle in the area through internship businesses and a working holiday system. However, in reality, it is extremely difficult for young people to join the leaf business. In Japanese agricultural villages, people traditionally tend to be reluctant to pass their land or house on to a stranger. It is also extremely difficult to make a living independently off only the leaf business; thus without gaining some land and a house to cultivate other agricultural products, the leaf business is not very attractive for young people. From the viewpoint of the current producers of tsumamono, accepting newcomers into the business would unless the tsumamono market expands - mean the risk of decreasing the income of each farmer. Additionally, more and more farmers are making capital investments into greenhouses and tree planting, so it is difficult for them to pass the business onto the next generation unless they can make a return on their investment. Thus, there is little exchange between elderly people and any young people who have recently moved to the area, and communication between people of different generations has not been very active. Kamikatsu-cho is thus engaged in new businesses to create employment for young people by, for example, encouraging the film industry.
32The leaf business of Irodori is an example of a successful enterprise achieved by connecting elderly people and local agricultural resources in a peripheral area with an aging population. In the process of developing the business, Irodori has overcome three difficulties with regard to information systems. Firstly, it overcame the distance between the peripheral producing regions and the consumer markets in urban areas. A typical example is the construction of a bidirectional system in which the company collects information from various markets nationally through the Internet and sends shipping information from production areas to the markets themselves. Secondly, it overcame the disadvantageous condition of being based in a mountain village with a low population density, where it is difficult to develop a communications infrastructure. One example of its ability to adapt was its active use of existing resources, such as the combination of disaster prevention radio communications systems and fax communications, the spread of the Internet through fiber-optic circuit networks for television, and the use of the computer server at the town office. Thirdly, it overcame the difficulty and burden that elderly people felt regarding the use of a personal computer and the Internet. The key to the company’s success lies not only in the development of its interface, with the the introduction of trackball computers and software to allow Japanese-language input on-screen, but also in the efforts to “show necessary information in an accessible way,” such as through sales information in the market and through the sales ranking of the farmers in the town. In the past, the majority of discussions on the facilitation of computer use by elderly people focused on the application of hardware. However, it has proven effective in encouraging elderly people to use computers by providing the information that they want to obtain. The effect of such non-mechanical efforts has important implications when considering measures to stimulate aging regions through information systems.
33On the other hand, we can now identify problems that are difficult to solve through information systems, such as the fact that this business has not been passed onto new generations because of factors discouraging newcomers to join, or such as the need for increased capital investment, along with the expansion of the business and the limited possibility for the business to expand further in the market. In order for the leaf business to develop in the future, it would be necessary to discover new groups of consumers with stable, large orders, in addition to existing distribution through other markets, such as contract sales to major customers.
34However, many positive side effects of this business have also been identified, such as the sales promotion of other agricultural products and the development of new businesses using the fact that Kamikatsu-cho and Irodori as a main business entity have become widely known. Irodori succeeded in connecting elderly people and colored leaves (the “dormant resources” that exist in all regions) as well as in developing the market while establishing necessary information systems with minimum cost. While we need to continue observing the way in which information systems will contribute to the leaf business and supporting new industries in this area in the future, the example of Irodori can be taken as an important case in considering the discovery of regional resources and the strategies for utilize them through informatization.
Nevertheless, this kind of rural community revitalization strategy does not spread easily in Japan, nor are there any examples of the distribution of such a strategy and know-how to overseas countries. This is not only because of the unique nature of the leaf business in which only a small market is targeted and in which stakeholders cannot easily be nurtured, but also because of the complex factors involved in helping break down social barriers, such as: motivating the elderly to use ICT, developing a low-cost interface for the elderly, and the popularity of Mr. Yokoishi - the project leader who realized the networking of the elderly. Today, as the “digital divide” in advanced countries is being eliminated in terms of hardware, there is no doubt that removing such social barriers becomes a more important task than before. The solution to issues in the future resides in accumulating examples of these solved problems and in generalized knowledge across the boundaries of countries.