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Not Just for Financial Services! A Mechanism to Use Blockchain for Regional Revitalization

Main visual : Not Just for Financial Services! A Mechanism to Use Blockchain for Regional Revitalization

At Fujitsu Research Institute, we have been working to plan regional revitalization projects and to support such projects with IT. In 2017, we provided a mechanism for smartphone-based electronic stamp rally promotions held in Chiba and Shinjuku in Japan. To do so, we used blockchain technology, which is typically used for virtual coins. This article introduces how blockchain opens up possibilities.

Author profile:
Yasuaki Matsumoto

Chief Senior Consultant, Digital Marketing Group, Fujitsu Research Institute

After his involvement at Fujitsu Limited in the development and operation of consumer business services, such as FM-TOWNS and FM-V, Matsumoto was loaned to Fujitsu Research Institute. He specializes in digital marketing centered on sports and anime content, cross-sector cooperation to use blockchain technology, developing measures for regional revitalization, and more.

* This article was published in Chisounomori 2017, volume 7 on November 27, 2017.
Chisounomori is an information magazine published by Fujitsu Research Institute (FRI).
* The department and position of the author and the content are from the time of publication.

Regional Revitalization Measures Absolutely Require a Mechanism to Obtain Economic Results

Fujitsu Research Institute supports the revitalization of specific regions and areas in various ways. In the process of revitalizing an area, it is indispensable to have a mechanism to obtain economic results as well as to attract customers. To this end, the area must be made appealing by combining the area's various resources so that people in other areas visit or buy things there.

We supported the revitalization of an area in Chiba in 2015. In collaboration with an anime production set in Chiba, we facilitated cooperation among local shopping streets and transportation systems as well as a professional baseball team through a special event. As a result, together we gave the area a unique appeal and stimulated the economy by selling collaborative products.

However, the event itself was only temporary. Although it effectively attracted visitors, we could not create a mechanism that encouraged participants to visit many times. For example, we held a stamp rally promotion on a shopping street; once participants completed their stamp collections, there was no more reason for them to walk around the area.
So, we considered a mechanism to make people repeatedly visit an area to continuously contribute to that area. This led us to decide to introduce a mechanism for electronic coins.

At a stamp rally promotion, participants can receive the same stamp only once. On the other hand, when using an electronic coin mechanism, participants can store, exchange, and even consume the coins. However, such a mechanism requires stronger security measures than those used for general system, and this is too costly for a single event to be held to revitalize an area. Therefore, we adopted an open source blockchain platform that features a mechanism for electronic coins and which can be built at low cost (Fig. 1).

Fig. 1 Relationship between the stamp rally, electronic coins, and blockchain

Benefits of Blockchain Use: Reduced Costs, Enhanced Security, and Distributed Databases

Blockchain, which is a distributed ledger on the Internet, is a technology that employs encryption and a complex calculation technique to guarantee the security of recorded information (transactions, contracts, etc.). One of blockchain's characteristics is transparency, which enables all nodes (network devices) on the blockchain to be confirmed when information is recorded. It also features ease of maintenance, since operation is not disrupted even if some nodes become isolated.

The benefits of using this mechanism include the following.

  • Depending on the operating method, costs can be reduced compared to conventional systems.
  • Greater security can be ensured.
  • Distributed databases enable multiple businesses to own data as peers.

Electronic coins such as bitcoin are a well-known application of blockchain technology. Blockchain can also be used for many other purposes; for example, it can be used for anything that requires the transfer of rights or vouchers, such as electronic tickets or supply chains.

All blockchain participants can confirm transaction content, and any organizations that wish to have the same data can do so. Thanks to these characteristics, blockchain is especially suitable for collaboration among local businesses in cases in which the number of participants is likely to vary. However, the disadvantage of using a distributed database is that the system must be designed according to the purpose because processing speeds will be slower than those of general systems.

So, while blockchain is excellent for electronic coins, it is insufficient for spreading an area's appeal during events to attract customers. For example, in a stamp rally based on a theme of local tourism resources, stamps (images) with drawings or photographs of sightseeing spots are indispensable to participants' enjoyment.

Thus, we considered adding images to electronic coins as a mechanism to pique participants' interest. Although general electronic coins have a quantitative value, we provided a mechanism that enables users to add images to their electronic coins. We did this by taking into account the use of coins for gamification* and their future use on smartphones (for payment, etc.). These distinctive characteristics are offered only by Fujitsu Research Institute and Fujitsu Limited**.

The following introduces our case studies on initiatives that made use of the aforementioned mechanism in Chiba and Shinjuku.

Case Study in Chiba City: Collaborative Event with a Light Novel (March to June 2017)

Due partly to the closure of two large commercial complexes near Chiba Station in 2016, people in the area were getting desperate. They worried that the number of young people walking around Chiba Station might decrease, especially because one of the complexes was targeted at young people.

So, we held an event to attract young customers with the support of Chiba City and cooperation from The Chiba Bank, Ltd. This was a collaborative event with a light novel titled, "My Youth Romantic Comedy Is Wrong, as I Expected." This light novel, which is very popular among junior and senior high school students, was written by Wataru Watari, illustrated by Ponkan8, and published by Shogakukan. It is a community-based story that features a high school student living in Chiba as the main character, making it appropriate for a regional event. With the cooperation of shopping streets in the area, we installed character panels in 11 locations in front of participating shops and provided an electronic stamp rally system (Fig. 2).

Written by Wataru Watari, illustrated by Ponkan8, and published by Shogakukan under the "Gagaga Bunko" imprint
Fig. 2 Stamp rally map

A QR code could be found on life-size cardboard versions of the characters placed in shops. After registering to participate by smartphone, when a stamp rally participant scans the QR code, an electronic stamp for the character is issued (Fig. 3).

Written by Wataru Watari, illustrated by Ponkan8, and published by Shogakukan under the "Gagaga Bunko" imprint
Fig. 3 Image of the electronic stamp rally

On the smartphone screen (see "Collect stamps" in the center of Fig. 3, "Image of the electronic stamp rally"), the character stamp and the message "12 stamps owned" are shown. This is what distinguishes our mechanism from a conventional paper-based stamp rally or a regular electronic stamp rally. Participants can have as many of the same stamp as they like in the form of electronic coins. By using such electronic coins, they can vote in the popularity contest and apply for giveaways while enjoying their consumption of the service.

Also, since the number of times that participants can vote in the popularity contest or apply for giveaways increases as they obtain more electronic coins, this motivates them to visit the streets many times to acquire stamps. In fact, many stamp rally participants eventually became repeaters (Fig. 4).

Fig. 4 Change in the percentage of repeaters

Case Study in Shinjuku: Creating a New Culture (July 2017)

In Shinjuku, we held a stamp rally promotion as part of "Cinema & Bar," Odakyu Electric Railway Co., Ltd.'s free movie screening event.

In addition to helping participants enjoy the town, this event also aimed to create a new culture in Nishi-Shinjuku, including wearing yukata in summer and proposing ways to enjoy Premium Friday, a government-backed campaign to stimulate private consumption.

The key here is that various businesses (department stores, railway companies, electronics retail stores, hotels, etc.) in Nishi-Shinjuku cooperated to stimulate the entire town. To this end, besides encouraging people to visit, other important issues were to understand participants' traffic paths and attributes as well as to share this information across the town.

Let's examine the actual traffic paths of customers (Fig. 5).

Fig. 5 Customers' traffic paths

In this map, frequently used routes are indicated by thicker lines. Red circles indicate start points, while blue circles indicate end points. From this map, you can see where participants started moving and which routes they took.

  • While there are extremely thick routes such as route (1)-(2), there is also a relatively thin route (2)-(4) and a rarely used route (1)-(4) even though all three routes are nearly the same distance.
  • A blue circle is found at (11) Shinjuku Chuo Park because it is the movie screening venue, the final destination. However, the thickest red circle (start point) is (8) Shinjuku Southern Terrace, which is the farthest location from the park. This is probably because the route is often used by office workers around the Shinjuku Station south exit when heading for the west exit.
  • The point connected to many routes that served as a hub is (1), which is the closest to the station. Point (5), which is on the route to the south exit or the east exit, is the second largest hub.

In this way, analyzing participants' traffic paths enables businesses to understand frequently used routes, rarely used routes, points serving as hubs, and so on. This enables them to consider how to effectively promote movement among people in the area analyzed.

This event is held every summer, and knowledge obtained by analyzing the results data can be fed back into next year's new programs. In addition, in cases of collaboration among many businesses such as this one, the reliability and security of data can be enhanced by distributing data to each and allowing each to own a set of the data. This is another benefit of the distributed databases employed by blockchain.

The Future Potential of Blockchain Technology

This article introduced an electronic stamp rally promotion as an example of regional revitalization, but there are many other possibilities for blockchain mechanisms. One option is a measure for attracting customers that is linked to gamification. For example, participants can obtain electronic coins (stamps) when they visit local tourism resources, places in the area popularized by novels and anime, or local sports teams. Those who have collected many stamps can also receive privileges unique to the area or exchange stamps with friends; this measure employs gamification to attract customers. Moreover, by enabling them to use collected stamps only in that area, consumption in the area can be increased.

Until now, it has been difficult to easily build systems for use by multiple businesses. For example, in regional collaboration, every year some new participants join the project while others leave.

Such cases present the problem of whether it is appropriate to have just one business responsible for keeping all of the data. With a blockchain network created for an area, however, the data is distributed and stored by every participant. Thus, information on regional events can continue to be retained regardless of changes in the participants. Fujitsu Research Institute provides a wide range of support, from coordination efforts (such as arrangement of collaboration with companies and local governments) and design of blockchain usage policies to post-use analysis and feedback to measures.

By sharing data among concerned parties in a region via blockchain, we believe the economy can be stimulated through cross-sector cooperation as described in the Japanese government's Growth Strategy 2017.

At Fujitsu Research Institute, we will continue to study regional revitalization measures that bring about economic benefits and that are also fun for users.

*: Gamification: All activities that use game design techniques and mechanisms to resolve issues or to improve customer loyalty.

**: The system is provided by the Video Network Service Department of the Network Service Division of Fujitsu Limited