This article was originally posted on placesbrands.
Detroit has been all over the news recently with its declaration of bankruptcy, as already discussed on this blog. With Chicago also showing signs of struggle, I decided to hoist the spotlight across the Pacific and shed some light on another city that has already collapsed financially, yet learned greatly from the experience. Perhaps there could be some lessons here for the US, and the UK too.
Back in summer 2007, the global financial crisis was still a nightmare waiting to happen. The world chugged along gaily, racking up huge debts like there would be no tomorrow. But for the city of Yubari, in Japan’s Hokkaido prefecture, financial ruin was already a reality.
In Yubari’s 1960’s heyday, coal mining made the town prosperous. But as the Japanese government moved the main energy source away from coal to focus on oil, Yubari not only lost its main economic driver, but started to lose its direction as a city. As the coal mines disappeared, so did the residents, seeking greener pastures elsewhere. A combination of factors including Yubari’s ageing population, dwindling workforce, declining (or non-existent industry), costly medical care and the expense of supporting people via welfare, plus a generally apathetic spirit overall, led to a major downturn.
By the 1980s, Yubari was seriously in the doldrums. Backed by a round of central government subsidies, attempts were made to revive the city’s economy by introducing theme parks and resorts, in the hope of attracting visitors and creating jobs. But these attempts failed miserably, only serving to drain Yubari’s dwindling financial reserves even further.
As June 2007 rolled around and Yubari finally declared bankruptcy, the city’s debts were sky-high – more than 35 billion yen.
Six years later, an article in the Guardian documents lessons learned from Yubari’s progress as it works hard to pull itself back from the brink. To its credit, the central government of Japan sprang into action and passed a ‘No More Yubari’s’ law, complete with a set of early warnings and contingency plans to ensure no more Japanese cities could fall unchecked into economic ruin. The law also proposed increased transparency of cities’ financial affairs, which is a wise move by anyone’s standards. And it seems to be working, slowly but surely. By July 2013, Yubari had already paid back 3.8 billion yen of its debt. 2030 is set as the deadline for full repayment and hopefully a return to health.
In terms of city branding, what can we take away from Yubari’s experience? Obviously bankruptcy is a huge blow to any city’s image. But when disaster is inevitable, are there ways to mitigate the effect?
One reason among many for Yubari’s original troubles was failing to market itself effectively. With lethargic citizens lacking faith in the city or enthusiasm for its future, something was needed to reenergise people and begin rebuilding brand Yubari.
From a branding point of view, Yubari offered practically nothing to work with. Or so it seemed.
Tasked with the challenge of rebranding Yubari, Japanese communications agency Beacon Communications did some digging and discovered Yubari has Japan’s lowest divorce rate. This led to the slogan "Yubari: No Money, But Love", with Yubari positioned as a destination for happy couples. The honesty, yet optimism embodied in the slogan, combined with one of the cute mascots beloved by many Japanese, helped generate a notable level of positive PR for the city. The results were encouraging too, with tourism increasing by 10% and 31 million dollars generated to help relieve Yubari’s debt.