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IntroductionThere are 6.852 islands in Japan. Five of these are the main islands led by Honshu, while others are known as remote islands. Remote islands in Japan differ widely in terms of area and population size, but typically fishing and agriculture are mainstay industries. Some remote islands have succeeded in developing tourism (Suyama 2003). On the other hand, the transportation cost of goods is relatively high (Kuse 2012), and they tend to be relatively underdeveloped areas (Yabuuchi 1971). Therefore, the Japanese government has enacted laws such as the “Remote Islands Development Act” (Okuno 1998). Generally, given the difficulty of attracting factories to remote islands, it is considered important to foster local industries by developing regional specialty products or promoting tourism. But, as Miyauchi (2006) points out, producers, who often have motivation and ideas to create regional specialty products, face challenges in establishing distribution channels. In this regard, the cases of mail-order sales and promotion in rural areas, as introduced by Hashimoto (2009 ; 2012), suggest a solution. Especially in remote islands, use of e-commerce is expected to result in effects such as collaboration, innovation, cost cutting (B to B), and market expansion (B to C), as pointed out by Hashimoto (2000).While Japan has developed a nationwide broadband network in response to the emergence of the advanced information society, development was inadequate in remote islands and mountainous areas. As a result, the Japanese government has pursued policies to improve the information and communication environment on remote islands (Arai et al. 2012a ; 2012b ; 2014). However, this does not always lead to industrial promotion. Although it is important for businesses to maintain inexpensive and stable communication lines, their use depends on the size of the companies, the type of industry, and the management policies in each company (Grims 2003). In addition, even when cyberspace is utilized, the influence of geographical factors (logistics, the economy of agglomeration etc.) remains (Steinfield 2004). Malecki (2003) points out that the effect of improving the information and communication environment on the development of rural areas is complicated, and this seems to be the case on remote islands as well. In order to examine the influence of the improvement of ICT on industrial promotion, it is necessary to clarify the present situation through case studies such as Hashimoto (2012).Many studies have been conducted on the impact of ICT on regional development. Lorentzon (2007), that conducted a case study of Sweden, pointed out that as a knowledge-intensive society, the function of a metropolis became stronger than before, and ICT became a tool to counteract tendencies toward regional imbalances. However, as López and Tricas (2007) argue, regional development is strongly influenced not only by virtual space but also by elements that occur in physical space, such as interactions between local actors (players). Also, in order to spread ICT, it is necessary to spread the use of ICT, as well as to improve the line. Policy support for these is also required. Especially in rural areas, ICT is expected to bring power and new opportunities for regional development (Stratigea 2011). To that, it is necessary to remove various barriers related to network infrastructure, developing specific ICT applications and content, utilization of ICT. And, local economic conditions also affect an impact on the local development. According to Moriset (2011), who studied the development of the digital economy in rural areas in France, telework, which is a prominent method of using ICT, is considered to be a way to revitalize the local economy, but has little impact on the local economy. Although advanced ICT development changes the basic conditions of the local economy, local industrial structures, business relationships, and management policies of each business also need to be examined.The impact of ICT on regional development depends not only on the development of lines, but also on the physical and geographical environment of each region. In that respect, the island is far from the mainland, so it can be said that the islands are good case area for examining the impact of ICT development on regional development. Bakis (1998) is one such pioneering study. Bakis (1998) examined the impact of connecting islands with the continent and improving the environment of the islands, focusing on technical networks, society, economic development, and transportation. However, the impact of ICT depends on the scale and industrial structure, so there are differences in each island. In addition, the use of ICT must be discussed separately because the way of utilization differs between the business and the residents on the island. From the viewpoint of industrial development on a remote island, which is the aim of this article, it is important to analyze in detail how the business on the island uses ICT. In these cases, it can be assumed that ICT is used effectively. However, as mentioned above, in order to examine the impact on industrial promotion, it is necessary to analyze the actual usage in detail through each case.This paper will elucidate the influence of improved ICT on industrial promotion through a case analysis of a remote island in Japan. Japanese government developed ICT environment in peripheral area including islands, and it would affect the industrial activities in Japanese islands. The study area is the town of Ama. This town is an island located in western Japan, and famous for its focus on regional revitalization. In Ama, CAS business is widely known as a business for industrial promotion (Kawato 2009 ; Tomizawa 2012 ; Nakajima 2014).This paper draws on analysis of a semi-structured interview results conducted between 2012 and 2013. Also, the author analyze related data and public statistics. In this paper, Chapter 1 introduces the regional characteristics of Ama. Chapter 2 gives an overview of the CAS business. Chapter 3 clarifies business relationships, customer demand, and marketing of CAS business. Chapter 4 analyzes the utilization of ICT in CAS business and discusses the impact of ICT on the industrial promotion on remote islands. In the final chapter, the author summarizes this paper.Outline of Ama townPopulation and industrial structureAma is a municipality of Shimane Prefecture in western Japan, about 60 km north of the mainland (Figure 1). The town of Ama consists of one island (33.4 km2 in 2015) that forms a part of the Oki Islands (Photo 1).Figure 1. The Location of Ama TownThe population of Ama was 2,353 in 2015, of which 246 (10.5 %) were under 15 years old, 1,189 (50.5 %) were between 15 and 64 years old, and 918 (39.0 %) were over 65 years old. The population has decreased, from 3,537 in 1980, 2,672 in 2000, and 2,374 in 2010 (Figure 2). On the other hand, the ratio of residents over the age of 65 continues to rise, with 20.9 % in 1980, 36.1 % in 2000, and 38.9 % in 2010.Photo 1. Landscape of Ama Town in 2013Source : Taken by Hiroaki Kammura.The number of workers in Ama was 1,142 in 2015. Among them, 192 (16.8 %) were employed in primary industry, 121 (10.6 %) in secondary industry, 708 (62.0 %) in tertiary industry, and 119 (10.4 %) as public servants. Thus, tertiary industry constitutes the largest share of the Ama economy. In contrast, in Japan as a whole, the proportion of workers of primary industry is 3.8 %, secondary industry is 7.4 %, and tertiary industry is 80.0 %. Compared to Japan and Shimane Prefecture, the proportion of tertiary industry is smaller in Ama, and the proportion of primary industry is larger. Between 83 agricultural workers and 87 fishermen, more than 10 % of the total number of workers in Ama were employed in primary industry. The fishermen mainly fish squid and horse mackerel in nearby waters, as well as cultivate oysters.Figure 2. Population Change in Ama Town (1980 - 2015)Source : Population Census.Development of ICTAmid the development of ICT in Japan, Ama has introduced several policies to improve the information and communication environment. In 2001, it implemented Shimane Prefecture’s “High-speed Internet Development Project” to enable continuous connection to the Internet in Ama. In 2002, the town introduced ADSL lines to public facilities such as clinics and public halls under the Japanese government’s “Regional Internet Development Project”. In addition, the Ama municipal government has released digital images of aerial photographs and introduced historical sites.Furthermore, in 2004 the “e-Local Business Project” was implemented in connection with industrial activities in Ama. This project used mobile phones to connect fishermen and food processors in Ama in order to improve information on production and distribution, including traceability. In addition, from 2007 to 2010, the Ama municipal government carried out a “Model Development Project for Utilization of Regional ICT” that sought to promote Ama town by creating video contents and installing digital signage at restaurants in central Tokyo. In 2009, another Japanese government initiative known as the “Regional Information and Telecommunications Infrastructure Development Project” was implemented, and FTTH broadband was introduced in Ama. As a result, in 2011 broadband became available through FTTH service across the entire area of Ama.Development process of CAS businessAround the same time, Ama implemented a reform of the municipal administration in the 2000s. Amid interminable population decline and aging, regional promotion became a political issue in Ama. Therefore, Ama undertook various construction projects based on the “Remote Islands Development Act” and other policies of Japanese government. However, public works projects increased the balance of municipal bonds and caused a financial crisis. In Japan during the 2000s, numerous municipalities merged with other municipalities to avoid financial crisis. But Ama decided not to merge and to address its challenges in other ways. Therefore, in addition to fiscal reform, Ama focused on industrial promotion and made efforts to strengthen its economic base.Given that the ratio of the primary industry is relatively high, Ama sought to promote branding of local products, expand distribution channels, and encourage tourism of the natural environment. For example, Ama began to cultivate oysters, which did not exist there before, under the new brand name “Haruka”. Also, there is an effort to brand Japanese beef (Wagyu) called “Oki-gyu”. CAS business has been under development since the 2000s as one of the initiatives for industrial promotion.Photo 2. Appearance of CAS Plant (2013)Source : Taken by Hiroaki Kammura.CAS is an abbreviation of Cell Alive System, which is the name of a technology to freeze foods. CAS is developed by a company in Chiba Prefecture adjacent to Tokyo. This innovative freezing method is said to preserve the taste of food even after thawing. Due to its remoteness, Ama had faced the issue of declining freshness when exporting seafood to the mainland. It was believed that the ability to preserve quality using CAS would support the viability of fishing in Ama. Therefore, after confirming the quality of CAS, the Ama municipal government decided to introduce CAS. Making use of subsidies from Japanese government, Ama succeeded in reducing the municipality’s burden to about 10 % of the roughly 500 million JPY cost. This expense would eventually be paid by the CAS business company (Furusato Ama Co., Ltd.). In 2013, The municipal government owns the CAS plant (Photo 2), and Fururusato Ama Co., Ltd. is responsible for production and marketing of CAS products.CAS business for industrial promotionBusiness indices of Furusato Ama Co., LtdFurusato Ama Co., Ltd. is a company with capital of 255 million JPY. The Ama municipal government holds about 90 % of the issued shares, and the mayor is the president of the company. In addition to CAS business, the company operates several businesses, such as managing a direct sales store, a restaurant on the island, and manufacturing of salt, and employed a total of 33 people as of 2012, of which 11 were regular employees and 22 were non-regular employees. In addition, there are two staff dispatched from the town office.The annual sales of Furusato Ama Co., Ltd. were 114.2 million JPY in fiscal year (FY) 2006, for all business divisions. It later exceeded 200 million JPY in FY 2011, and the company earned a profit each year from FY2009 to FY2012. Breaking down sales by division, the growth of CAS business is notable (Figure 3). The ratio of CAS business to annual sales was less than 50 % in FY2005, but increased to 53 % in FY2012. CAS business is a growth division of Furusato Ama Co., Ltd.Figure 3. Annual Sales of Furusato Ama Co., Ltd. by Division (2005 - 2012)Source : Furusato Ama Co., Ltd.Raw material procurement and manufacturingSince CAS was introduced for the purpose of promoting the fishing industry, the raw material of CAS business is mainly seafood. In general, the fish processing industry is a business that adds value by enhancing the preservation of seafoods, and accordingly processors try to procure an inexpensive and stable supply of raw materials from inside and outside the region. However, Furosato Ama Co., Ltd.’s aim is industrial promotion and therefore the company only procures seafood produced in Ama. As a result, Furusato Ama Co., Ltd. faced the risk of supply instability, an inevitable characteristic of the fishing industry. In order to mitigate this risk, fishermen increase their shipments to wholesale markets in the case of oversupply. In the case of undersupply, Furusato Ama Co., Ltd. manufactures secondary processed products such as breaded fish from frozen processed seafoods.The seafood brought ashore in Ama is divided between relatively expensive products such as oysters and squid, and relatively inexpensive ones such as horse mackerel. The added value of expensive seafood can be increased through branding based on CAS, because of scarcity and lack of wide distribution. On the other hand, inexpensive seafood is not well suited for sale as CAS products, since there is a large supply of fresh products. Therefore, value is added to this seafood through sale as secondary processed products.In order to maintain brand value, CAS products are subject to a stricter standard of quality control than the marine products shipped to the wholesale market. Therefore, only a limited number of fishermen ship to Furusato Ama Co., Ltd. These fishermen do not ship their entire catch to the CAS business, but are able to select advantageous sales destinations by comparing the fixed price of Furusato Ama Co., Ltd. with the fluctuating price of wholesale market.Sales of CAS productsStable sales of CAS products are essential for the growth of Furusato Ama Co., Ltd., and the industrial promotion of Ama Town. The annual sales of CAS products were about 25 million JPY in FY2005, but reached about 90 million JPY in FY2010, and later exceed 100 million JPY in FY2012.Figure 4. Ratio of Annual Sales of CAS Products (Fiscal Year 2012)Source : Furusato Ama Co., Ltd.According to Furusato Ama Co., Ltd., annual sales of CAS products in FY2012 were approximately 112 million JPY. The ratio of sales to customers in medium- and long-term transactions is 88.3 % (Figure 4), which include restaurants and bars (68.8 %), mail order businesses (e-commerce business, 16.1 %), and high-end supermarkets mainly in Tokyo (3.4 %). On the other hand, inter-divisional transfer within the company is 11.7 %. These correspond to the ingredients of the restaurant run by Furusato Ama Co., Ltd. and sales at a direct retail store. The latter includes sales via telephone, fax and its own online shopping site to consumers, restaurants and bars who transact one or a few times.The annual sales in FY2012 sorted by item are : 70.5 % for primary processed products (44.6 % for squid and 25.9 % for oysters), and 29.5 % for secondary processed products. The primary processed products are frozen by CAS and sold to restaurants and bars as ingredients for cooking. On the other hand, secondary processed products, such as breaded fish and gratin made from primary processed products, are sold to supermarkets and mail order businesses.The annual sales in FY2012 sorted by customer location are 64.4 % in the Kanto region, 12.2 % in Ama, and 3.2 % in Shimane Prefecture (Figure 4). Thus, majority of CAS products are sold to customers in the Kanto region including Tokyo. In addition, Furusato Ama Co., Ltd. also has sales channels overseas, such as China and Dubai, which accounted for 2.4 % of annual sales in FY2012. CAS has expanded the scale of business by increasing demand mainly from restaurants and bars in metropolitan areas.Business relationships of CAS businessCharacteristics of business relationshipsFurusato Ama Co., Ltd. did not establish its current sales channels from the start. Around 2005, Furusato Ama Co., Ltd. consulted with advisors regarding sales channels. At that time, it established business relationships with large companies such as Seven-Eleven Japan Co., Ltd., which operates many convenience stores in Japan. Although there were few conflicts, the demand for low prices and a large volume of deliveries made it impossible for a small company such as Furusato Ama Co., Ltd to maintain this business relationship.Furusato Ama Co., Ltd. aims to brand CAS products in order to promote Ama and increase its own profit and that of the fishermen. Because of the limited supply of raw materials and the scale of facilities, it is difficult to anticipate a significant increase in production of CAS products. Therefore, Furusato Ama Co., Ltd. aimed to maintain stable transactions at a relatively high price. Furusato Ama Co., Ltd. reconsidered its business relationships, establishing connections with many SMEs (restaurants and bars, supermarkets) in addition to large corporations. As the largest market in Japan, Tokyo is the main target area of sales by Furusato Ama Co., Ltd.Cases of three customersThese business relationships are supported by customers’ demand for CAS products. In order to analyze this demand, this paper considers interview surveys conducted with three chain restaurants (hereinafter three customers) that manage restaurants and bars in Tokyo (Table 1). These three customers are considered primary customers in 2013 by Furusato Ama Co., Ltd.Among these three customers, company A uses CAS products (worth approximately 12 million JPY) such as squid and oysters in Japanese-style bars. Company A thaws CAS products and provides them as raw “sashimi”, and praises the quality. Company B purchases only oysters (worth approximately 3.7 million JPY), and uses CAS products in its oyster bars. Company B uses small-sized oysters (SSS size) to allow customers to try many kinds of oysters, and vouches that the taste of CAS products is better than other frozen oysters. On the other hand, Company C uses various CAS products (worth about 3.4 million JPY) such as squid and oysters (M size) in sushi shops. Company C positions CAS products as high-priced products in its sushi shops.Table 1. Overview of Three CustomersSource : Website of each company, interview survey.These three customers understand that CAS business is a project aimed at industrial promotion of Ama town. However, each suggest that the main reason for establishing and maintaining the business relationships is not to support industrial promotion, but their positive evaluation of the CAS products. In particular, these three customers highly praised the long shelf life and quality of CAS products, which can be served as raw foods in their restaurants and bars. On the other hand, they pointed out that there is a limited selection of CAS products, and the long thawing time and low supply of oysters are also issues.Marketing of CAS productsIt is possible that Furusato Ama Co., Ltd. increased annual sales rapidly through careful response to customer needs. The well-known marketing theory of 4P (price, promotion, product, place) is a useful organizational aid when discussing this point.According to the three customers, CAS products are not cheap, and are regarded as expensive seafood products. But since Ama is not a famous production area with a well-established brand image, its products are considered to be relatively easy to purchase among expensive seafood ingredients. This view is valid, because Furusato Ama Co., Ltd. tries to brand CAS products to secure profit for itself and the fishermen. For branding through promotion (advertising), Furusato Ama Co., Ltd. utilizes the publicity effects of mass media, in addition to its own sales activities. In fact, because Ama has grown famous as a successful example of regional promotion, there are many opportunities to be interviewed by mass media. The three customers mentioned in the interview survey that they learned of CAS products made in Ama town from TV programs.But the point that customers value most is the quality of CAS products. This comes from strict quality control of the seafood, in addition to the high technical level of CAS. Moreover, when developing secondary processed products that require detailed understandings of customer needs, Furusato Ama Co., Ltd. cooperated with companies outside the island to develop the products, in order to make up for its lack of expertise and know-how. In addition to such product development, Furusato Ama Co., Ltd. also maintains a distribution system (place of 4P). In Japan, supermarkets often impose penalties for missing or delayed delivery. Because Ama is a remote island, there is a risk that the ferry may be canceled due to bad weather. Furusato Ama Co., Ltd. thus stores a portion of its CAS products in a rented warehouse on the mainland. Also, in order to ensure efficient and stable delivery, Furusato Ama Co., Ltd. uses low-cost courier service, and existing transportation services utilized by fishing cooperatives.ICT utilization in CAS businessMeans of utilizing ICTHow does Furusato Ama Co., Ltd. make use of ICT ? Table 2 shows the outline of the ways it utilizes ICT.First, in sales to customers with long-term business relationships (B to B), Furusato Ama Co., Ltd. utilizes the ordering system typically used by the customers. Because the ordering system is accessed through the Internet, Furusato Ama Co., Ltd. easily use the system. And, this system did not developed by neither Furusato Ama Co., Ltd. nor the customer, therefore it is possible to use this system at low cost. Since the customers became possible to order through the system which they always use, Furusato Ama Co., Ltd. could maintain and strengthen its business relationships and make the ordering process more efficient.Second, for sales to customers who have ordered once to several times, Furusato Ama Co., Ltd. directs shoppers to its own online shopping site (“Shimakaze-seikatsu”). The website was launched around 2008 and sells CAS products. The number of members totaled approximately 2,700 in 2013. Customers can not only purchase CAS products on the website, but also browse images and check prices. Therefore, the website also functions as an online catalog for CAS products. In addition, Furusato Ama Co., Ltd. also exhibits CAS products on other companies’ online shopping sites. This is considered to have the same effect as its own online shopping site.Table 2. Utilization of ICT in CAS BusinessSource : Interview survey, Ama municipal government.Furusato Ama Co., Ltd. also utilizes ICT for purposes besides maintaining business relationships. For example, the company’s blog introduces CAS products, displays photos of factory manufacturing and shipping status, and announces events related to CAS products. The blog also introduces events and news from Ama. In 2011, 464 articles were uploaded, of which 336 (72.4 %) were in the category “Product Information”. Although the blog does not have a webpage to order products, it introduces CAS business in detail, and serves to disseminate information widely. In addition, Furusato Ama Co., Ltd. uses digital signage installed in restaurants in Tokyo to stream photos and videos. This has a promotional effect for CAS products and Ama.Impact on industrial promotion of remote islandsFurusato Ama Co., Ltd. is a food processing company and is not aimed at advanced use of ICT. Therefore, its methods of utilization of ICT are not cutting-edge, but is generally similar to those seen in other companies, such as the establishment of an online shopping site and the use of a blog. At Furusato Ama Co., Ltd., employees in charge of various tasks such as management, manufacturing and sales are managing the online shopping site and the blog. Also, it has not outsourced system development to an external company. It can be said that Furusato Ama Co., Ltd. utilizes ICT in an auxiliary role in sales and promotion.The business model of Furusato Ama Co., Ltd. is based on the effective combination of existing elements, rather than outright innovation. CAS business in Ama began with the goal of industrial promotion by introducing a technology called CAS from outside the island in order to address the challenge of preserving seafood freshness. However, because CAS is an expensive technology, it was introduced by using subsidies from Japanese government. As a result, the Ama municipal government is the owner of CAS processing facilities, and Furusato Ama Co., Ltd. manufactures and sells CAS products without making initial investments. In addition, mass media is used for promotion purposes, thereby reducing advertising costs. In terms of distribution, the company aims for efficient and reliable delivery by using the existing logistic services. The utilization of ICT by Furusato Ama Co., Ltd, for purposes such as online shopping site and a blog, should be one element of its business model like other elements. In other words, as ICT development progressed in Japan, Furusato Ama Co., Ltd. incorporated ICT as an auxiliary means of sales and promotion, and it aims to utilize ICT effectively.Since remote islands are distant from the mainland and surrounded by the ocean, the utilization of ICT has been highly anticipated. This paper confirmed that the introduction of ICT has resulted in the e-commerce effects pointed out by Hashimoto (2000), in particular effects such as collaboration (B to B) and market expansion (B to C). But, as Malecki (2003) and Grims (2003) argue, while ICT impacts the development of rural areas, the effect on areas is complicated, and ICT does not immediately have a clear effect on industrial promotion. As pointed out by Stratigea (2011) and López and Tricas (2007), in order to be effective in regional development, it is necessary to overcome multi-level barriers such as skill acquisition through policy support.This paper introduced a case study in a specific area and analysis at the level of an individual company, demonstrating how a company considered the role of ICT based on its specific business model. Businesses located on remote islands already have their business relationships and business models. Therefore, they utilize ICT to the extent that they consider it effective. Most business activities aimed at industrial promotion on the island are based on existing industries. It is not easy to create a business that belongs to the industrial field using the latest technology on the island. In addition, the utilization of ICT requires skilled workers, but in generally, they are few in the islands. Because of these conditions and barriers, ICT is now utilized in an auxiliary role by the businesses for industrial promotion on remote islands.On the other hand, improvement of the information and communication environment enables inexpensive and reliable use of the Internet. This is a fundamental requirement for businesses in remote islands to use online shopping sites, blogs, and correspond through the ordering systems used by customers. In that respect, the policy of developing broadband on remote islands is of great significance. Bakis (1998) discusses with the development of ICT, focusing on the islands connecting to the continent and improving the environment on the islands. In this study, this point can also be confirmed. Lorentzon (2007) points out that the functions of large cities will become stronger as a knowledge-intensive society. In this case, we confirmed the CAS business in Ama is strengthening the business relationship with the customer in Tokyo in response to the ordering system used by customers. In this study, we focus only on one business, but looking at the island as a whole, it can be pointed out that the isolation was reduced. This case did not include the use of rich content such as video distribution or the location of the information and communication industry on remote islands, but it is possible that these cases may appear, such as telework (Moriset 2011), in the future, as a result of industrial promotion on remote islands.ConclusionThis paper has discussed the influence of an improved information and communication environment. In the study area of the town of Ama, a new technology called CAS was introduced to promote industrial activities, and the company succeeded in expanding its scale of business and establishing a business model by strategically combining various elements existing both inside and outside the island. It could be said that ICT is utilized as one of these elements of the business model. In other words, it is utilized by the businesses when they think it has positive effects in sales and promotion.Improving the information and communication environment is a crucial element of industrial promotion on remote islands, and it strengthened the relationship with the outside of the island, especially metropolitan area such as Tokyo. However, its impact on industrial promotion is complex, and depends on the management policies of each business. With the advent of an advanced information society, businesses on remote islands tend to establish contact points online. In the future, as the information and communication environment of remote islands further improves, it is possible that new models for industrial promotion, such as utilization of rich content and the location of information and communication industry, may also be achieved. This paper has only analyzed one case in a remote island of Japan. Further analysis of case studies of various remote islands is necessary. This is a topic for future research.