Knowledge creation either in isolation or joint with another person, using either face to face or internet contact and incorporating internet search ability is analyzed. Both a conceptual phase and a technical phase of research are analyzed, allowing workers to choose endogenously their mode of communication. In addition to formal knowledge, tacit knowledge plays an essential role in the knowledge production process. Lead time for face to face communication plays a key role in the optimal choice of communication mode. The sink point is inefficient. Our framework is applied to pandemic restrictions on face to face communication.

Through out this book, we discussed the way to build back the disaster-stricken areas. Some may criticize that the reconstruction cost would be too high, given the declining population. Our arguments oppose to that view to leave the areas demolished by each large-scale disaster as they are. From the spatial economics viewpoint, we consider that the national land should be fully utilized. The utilization of the reconstructed land and infrastructure will change with the learning of people from the new environments and new actors. The short-sighted judgement must be avoided because the evaluation of reconstruction would be only possible based on a long-run view over several hundred years.

Chapter 7 endorsed that the reconstruction of safe and resilient infrastructure is the foundation of local communities, which requires the support of the government. The question is how to restore a vibrant local lifestyle in the face of the sudden loss of scale economies. It hinges on: (1) regeneration of the central business district (CBD); (2) provision of local public services, and (3) provision of interregional public services. In the rehabilitation of the city center, we noted some cases in which existing laws, such as land ownership regulations, turned out to be an obstacle for reconstruction. It took considerable time to carry out legal procedures when documents and data had been lost during the disaster and the local public administration had to work with a substantially reduced staff. The legal system should foresee a catastrophic situation, and grant emergency power to the local community in such an emergency situation. The local community should be able to discuss and reach agreement on how to provide public services. In the population-declining phase, some public services that used to be provided by each municipality as a norm in the population-increasing phase need to be merged to a joint-provision. Mergers of public service facilities require reorganization of public transportation systems. To reconstruct safe and resilient land and infrastructure, to implement a plan to regenerate CBE, and to recover necessary public services are battles against time for a local community to minimize the population outflow.

In Chap. 5, we study the importance of natural resources-based industries to turn around the negative feedback on the back of external demand. Blessed with rich offshore fishery resources and the development of inshore aquaculture, fishing has been a main stay of the Sanriku coast. It should play a leading role in reconstruction of the Sanriku coast. Nevertheless, the fishery industry is in a difficult situation. First, fishery industrial clusters, like that in Kesennuma city of Miyagi Prefecture, which consists of many fishery suppliers, shipyards, fish market agents, fish processors, and hotels and restaurants, must be harnessed in a holistic fashion to function well. Reconstruction measures require regional-level coordination. Concerted actions are necessary, not merely individual efforts. Amidst the declining population of Japan, reconstruction of fishery cities to counter the shrinking domestic demand requires novel approaches such as: rational mergers of geographically scattered small fishing ports, adding more value by branding products, and internationalization to capture foreign demand.

Japan is now facing the new disaster of the COVID-19 pandemic in the midst of the recovery from the Great East Japan Earthquake. We identified the following unique characteristics of the COVID-19 pandemic. (A) Unlike many past infectious diseases, the epicenters of the most severe outbreaks until the first half of 2020 were the wealthiest metropolises in the USA and Europe. (B) The virus of COVID-19 is mostly transmitted through face-to-face (F2F) communication. Thus, despite the great advancement of ICT today, the pandemic has been causing grave negative socioeconomic effects throughout the world. (C) The propagation of virus transmission occurs in 3C-environments (i.e., crowded places, close-contact settings, and confined and closed spaces) in big cities. Thus, large cities that have grown in the past with intensive agglomeration of socioeconomic activities in 3C environments now face the paradox of relying less on such 3C environments to avoid the risk of infection diseases in the future. The propagation of virus transmission in 3C environments also yields the scale-effect of population concentration in large cities. (D) Given that the functioning of metropolises in the USA and Europe is supported by a large mass of so-called essential workers, their working and living conditions in 3C-environments triggered the COVID-19 explosions there. The spread of COVID-19 infections in Japan has proceeded under the strong influence of the Tokyo monopolar land system. In particular, we identified a strong population-scale effect in infection growth in Tokyo. In the USA and Europe, in the early phase of the COVID-19 pandemic, the epicenters of the outbreaks were around respective economic centers called "the parallelogram" in the North-West USA and around the area called the "Blue Banana" in Western Europe. The explosion of the pandemic in the USA was largely caused by the fierce presidential campaign, suggesting that in emergency situations such as the COVID-19 pandemic, decisive political leadership at the national level based on scientific evidence is indispensable for controlling the situation. We examined the possible impact of the pandemic on the spatial structure of cities and regions in the future, focusing on the practice of working from home (WFH), which became rapidly popular in many countries for mitigating the 3C-environments in large cities. By using an analytical model, we have shown why the WFH productivity relative to working with commuting (WWC) is much lower in Japan in comparison with other major countries and how to improve the WFH productivity in Japan. To build back better large cities in Japan after the pandemic, each firm needs to transform its traditional working system centered around the HQ office in Central Business District (CBD) to an Activity Based Working system (ABW system) by fully utilizing ICT. With the prolonged pandemic in Japan, we witness that a weakening of the Tokyo monopolar system both in migration pattern and firm location choice.

This chapter presents a historical overview of the long-term transformation of Japan’s national land system under sustained population growth and economic development. During the post-World War II period, Japan’s national land system has been transformed considerably, with formation of the Pacific Industrial Belt during high economic growth in the 1960s, heavy concentration in the Tokyo metropolitan area along with the economic transition to knowledge-creation industries in the 1980s, and with increasing concentration of central administrative functions and knowledge-creation activities since the low-growth period in the 1990s, strengthening the Tokyo monopolar system. While the population increased, Tokyo absorbed the abundant labor offered by baby boomers and their second generation coming from rural areas. The concentration in Tokyo continues even during the declining-population phase, absorbing highly educated workers from local regions.

The periphery area of Japan has experienced outflows of young people as well as the aging of population ahead of the core area. The Sanriku coast, which we pay attention to as the most severely affected area by the Great East Japan Earthquake, consists of small cities that demonstrate the typical demographic characteristics of the periphery. Chapter 4 showed that the earthquake gave further impetus for a negative feedback of population decline and the weakening of agglomeration forces. Population outflow is occurring because of negative self-organization driven by increased dispersion forces after the earthquake, triggered by housing problems, delay in restoring central business districts (CBD), and employment mismatches. Reconstruction policy should not be aimed at recovering the original population size, but at the realization of optimal population size for supporting an affluent life while effectively using the natural advantage existing in each region. To take in the vigor of robust external demand, it is necessary to use creativity to differentiate products and strengthen ties with regional core cities.

Chapter 3 uses photographs to illustrate and summarize the damage and recovery process of the Great East Japan Earthquake. About 500 km of eastern Japan coastline was affected by the combined disasters of earthquake, the tsunami, and the nuclear power plant accident. In addition to more than 22,000 people who died or remain missing, 37,855 people were displaced to other prefectures. Damage to human life was enormous and disproportionately affected elderly people. Temporary housing was provided rapidly. Some were rented as emergency housing, including domiciles outside the original settlement. Later, town reconstruction in disaster-affected areas has progressed with an emphasis on safety. Still, severe population outflows have occurred from coastal areas. Within the affected area, the only population to have increased was that in the Sendai metropolitan area. Effects on manufacturing industries have spread nationwide throughout the supply chain. Even in the Chubu region, which is far from the affected area, the impact on manufacturing production was significant because of the propagation of the shortage of intermediate goods produced in the affected area. The effect was most notable in automobile industry, in which a multi-layered supply chain is highly developed. The recovery level of fisheries remains at about 70% of the pre-disaster level. Tourism of the area has been left behind by a national trend of inbound demand. Fishery and tourism have been very important for the affected area to capture external demand. Inactivity of these industries has been a critical obstacle for the recovery.

With Internet and Communication Technology (ICT) having removed geographical constraints for communication, this study examines how knowledge turnover induced by interregional migration increases the innovation quality in pre-ICT (1980--1995) and ICT periods (1996--2005). We find that the quality of innovation as measured by the number of patent citations was on average high in locations with active interregional migration in the pre-ICT period. Since the late 1990s, however, knowledge turnover at the regional level has played an insignificant role in enhancing quality of innovation within the context of the ICT age. Our results suggest that face-to-face knowledge exchange is selectively localized in the ICT age. JEL classification: O31, O34, R12, R23

Land is everywhere: the substratum of our existence. In addition, land is intimately linked to the dual concept of location in human activity. Together, land and location are essential ingredients for the lives of individuals as well as for national economies. In the early 21st century, there exist two different approaches to incorporating land and location into a general equilibrium theory. Dating from the classic work of von Thünen (1826), a rich variety of land-location density models have been developed. In a density model, a continuum of agents is distributed over a continuous location space. Given that simple calculus can be used in the analysis, these density models continue to be the “workhorse” of urban economics and location theory. However, the behavioral meaning of each agent occupying an infinitesimal “density of land” has long been in question. Given this situation, a radically new approach, called the σ-field approach, was developed in the mid-1980s for modeling land in a general equilibrium framework. In this approach: (1) the totality of land, L, is specified as a subset of ℝ2, (2) all possible land parcels in L are given by the σ-field of Lebesgue measurable subsets of L, and (3) each of a finite number of agents is postulated to choose one such parcel. Starting with Berliant (1985), increasingly more sophisticated σ-field models of land have been developed. Given these two different approaches to modeling land within a general equilibrium framework, several attempts have thus far been proposed for bridging the gap between them. But while a systematic study of the relationship between density models and σ-field models remains to be completed, the clarification of this relationship could open a new horizon toward a general equilibrium theory of land.

This paper presents a general equilibrium model of new economic geography, incorporating brand agriculture that produces differentiated agricultural products. Focusing on the core‐periphery space, we show that highly differentiated brand agriculture can be sustained in the periphery even when access to the core market is not particularly good. This result supports the promotion of innovative products in rural areas in order to avoid direct price competition in generic commodities markets under unfavorable conditions.

The purpose of this note is to update an ancient controversy over the comparison between discrete and continuous agent models of land use and agent location in urban economics. Berliant (1985) shows that that the following statement is self-contradictory: There is a continuum of agents, each of whom owns or is endowed with a positive Lebesgue measure of land. A corollary follows: As the number of agents tends to infinity, the set of agents who own a positive Lebesgue measure of land shrinks to zero. The basic question is this: Under what circumstances, if any, can we reconcile the two models?

Taking the great opportunity of visiting Crete, I have presented my freewheeling imagination about the future of the brain power society, bearing in mind the recent development of AI and robots. Based on Greek mythology, I consider that all brain-power professionals in civil society are the descendants of Athena, whereas the rapidly developing AI and robots are the ultimate descendants of Prometheus. In this context, in order to foresee the possible future of economic research in the coming AI revolution, I introduced the recent attempt by Marcus Berliant and myself to develop a formal framework for modeling the operational process of economic research. Then, I have suggested that if real humans and AI work together through such a framework while amplifying mutual comparative advantages, creativity in economic research as a whole will be vastly enhanced.

Supply chain internationalization is promoting a new cascade of agglomeration and dispersion. Headquarter tasks agglomerate in major cities in developed countries, while labor intensive tasks are shed to developing countries where offshored tasks form into a geographical concentration. As a whole, international supply chains are productivity and welfare enhancing through their more efficient use of human resources. This magnifies the cost of volatility. A case study on East Asia illustrates these points.