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Japanese Smart Communities as Industrial Policy Chapter j 21 433

greater energy security and disaster resilience. Japan is not Germany, with its
energiewiende (energy transition) contingent on continental energy trading
infrastructures as well as a very activist civil society. Nor is Japan one of the
Anglo-American regimes, again with international energy linkages, plus
generally plenteous resource endowments, competitive party politics, growing
populations, and a tendency to rely on market-led solutions rather than plan-
ning and explicit industrial policy.
We have seen that, compared with its peer countries, Japan has very poor
conventional resource endowments and strikingly adverse geography and ge-
ology. Japan also has the developed countries’ lowest levels of foreign in-
vestment, immigration, and other indicators of internationalization. Crucially,
Japan also has no direct international energy connections through power grids,
gas pipelines, and other energy networks. The country is also very distant from
its principal sources of energy supply. It thus makes sense to collaborate on
fostering public goods. It also seems advisable to deploy distributed energy
and its networks, maximizing efficiency, energy security, and local benefits,
rather than immediately spend enormous sums on building an international
(“Asia Super Grid”) or even an integrated national network.
The smart community distributed energy solution is also attractive because
Japan has a wealth of underground infrastructure corridors for communication
cables and other critical infrastructure. The replacement of thick conventional
communication cables with thin fiber-optic wires left considerable unused
space in these utility corridors. Smart community experts point out that this
space could be used for the deployment of heat pipelines. They argue that the
business opportunities stemming from installing distributed heat and power
networks would be very productive public works. Pertinent in this respect is
that highly efficient combined heat and power systems are crucial to cutting
energy use and carbon emissions (DeWit, 2016b; UNEP, 2015). And these
“district energy” systems are necessarily local, as the efficiency of thermal
distribution drops off dramatically after a few kilometers. These factors
dovetail nicely with Japan’s other reasons to build smart and compact com-
munities (Kashiwagi, 2015).

JAPAN’S NEW INSTITUTIONS
Japan shows us that broad societal incentives (e.g., energy security, interre-
gional equity, economic revitalization) can lead to action when they have
institutions and policy entrepreneurs empowered by a crisis. Since 3-11 Jap-
anese governance has become increasingly collaborative, integrated, and
focused on patent seismic, climate, energy, and other risks. Indeed, Japan may
be an outlier in evolving inclusive governance and long-term planning, in the
form of an integrated and adaptive industrial policy. Japanese policy makers
and others have built an impressive cluster of powerful new institutions that
group central agencies, subnational governments, businesses, and academics