“The reason Spain has more foreign visitors than Japan is that it’s smaller.”

You obviously don’t know what you are talking about. If that were the case, it would show on the stats as less Japanese spending on tourism abroad. Tourism’s “current-account deficit” (foreign spending in the country minus locals’ spending abroad) is:

Japan: $7bn – $38bn = – $31bn
Spain: $51bn – $15bn = + $36bn
France (number 1 by arrivals): $43bn – $33bn = + $10bn

Spain’s data are exceptionally high, especially when corrected for the size of the economy. Not even France’s data can be said to be similar. If you’re still not convinced: Spaniards rank first in complaints at foreign hotels, while Japanese rank last, which is consistent with a service-quality-conscious culture in Spain.

But foreign tourism is not nearly as important as domestic tourism. Málaga is experiencing a boom in weekend and business tourism as it became the nearest beach city from Madrid thanks to the AVE. Niigata should stop complaining and reflect on what’s doing wrong.

Now, I think we can agree that mobility helps a modern tourism industry more than an underdeveloped tourism sector. Let’s look at other services: are IT consultancies, architect bureaus, marketing services, lawyers, etc. mobility-sensible? Yes, since you can set up shop in cheaper Ciudad Real and serve Madrid’s market with bi-weekly visits. Are universities and science parks mobility-sensible? Yes, since you can have experts come and help you in specialized R&D.

But that means you have good universities distributed all around the country and some entrepreneurship in the first place. If everything is centralized in corporate headquarters in Tokyo-Osaka or, to a lesser degree, in Paris, it doesn’t work anymore.

The other issues you mention don’t point out to high ridership on midsize town to midsize town HSR lines. Why is local entrepreneurship more conducive to HSR than large corporate development? Why is Malaga inherently likelier to make good use of HSR than Lille? Why do services require more HSR ridership than manufacturing (note that France, with a strong service economy, has no more HSR ridership based on what you’d expect from population than manufacturing-oriented South Korea)?

The concepts of university spin-offs, start-ups and entrepreneurship are foreign to the Japanese, as are basic economic principles and freedoms. That makes people on outer regions depend on immigration or corporations setting shop on their home town for a living; while in Spain they could just found their own business (they don’t need to anyway, since others did before them).

Spain’s economic geography, complemented with modern services (including modern tourism and banking, which Japan lacks), is greatly helped by mobility, for reasons known to everybody. Let me show you a couple of stats to make clear what I mean by modern services:

1) Spain attracts 60 million foreign visitors every year, more than the whole USA, compared to just 7 million in Japan. You could wrongly say it is all because of climate, beautiful beaches or whatever; the fact is it requires good services, including a multi-lingual, specialized workforce (e.g. lots of university graduates in Tourism, Japanese-language guides, etc.). These foreign visitors can be divided into two groups: low-class Germans and Nordic young backpackers coming for the sun, getting beer at the supermarket and costing us more money than they leave in the country; and businesspeople in fairs and conferences and high-class couples in their 50s, who demand excellent services and can afford them.

As you may imagine, it is the second group that spends the most of the $50bn we get yearly from foreign visitors. For this group, the choice between 7-hous bus trips and 2-hour comfortable rides in the AVE is a no-brainer, as is the choice between countries with high-speed rail network and those lacking it. Now, if you do the math, the complete planned Spanish AVE network will cost around $150bn; i.e. three years of foreign high-class tourists’ spending. Let’s suppose having an excellent high-speed network means 10% more foreign tourists’ spending in the long run: then the AVE would pay for itself in 30 years even if nobody but foreign tourists would use it!

2) Services require more mobility than manufacturing. The Spanish service sector (including banking, telecoms, consultancies, engineering services, etc.) is more developed than Japan. That’s why both Spain and Japan have each around 4% of global market share on service exports, despite the Japanese being 3 times more populous.

Spain, as I have showed, has the kind of economic geography and service infrastructure to fully reap the gains of high-speed rail Japan lacks.

Now, you talk about the housing bubble. This has led many commenters to rightly question the content of last 8 years’ economic growth in the US, the UK and Spain, among others. Both the US and the UK got heavily in debt to fuel consumption, allowed their financial sectors to overgrow and lost global market share for manufactured goods (as did most of Western Europe and even Japan!).

Spain, meanwhile, got in debt to fuel investment (30% GDP against 17% in UK and 19% in the US), not consumption. Banking growth was prudently restricted and now we have a healthy banking system we didn’t need to bail out. Moreover, Spain and Germany were the only two Western European countries to maintain its global market share for manufactured exports in the last 8 years (something, I repeat, not even Japan could do). R&D investment, though low, has nearly doubled.

In this period, the US has not developed a single source of future income (if anything, barring Facebook). On the contrary, Spain, which didn’t lead the world in any industry a decade ago, now boasts the first telco in the world by number of subscribers (Telefónica), the first bank in the Eurozone (Santander), the first company in renewable energies in the world (Iberdrola Renovables), the second largest windmill manufacturer (Gamesa), the first clothes company in Europe (Inditex-Zara), etc. etc. Look at stats for pharma R&D growth, high-tech manufacturing, etc. or simply look at infrastructure improvements and you’ll clearly see the content of Spanish growth these last years, unlike in the US case (which, admittedly, started from a wealthier position).

Regarding Japan: In the last year, Japan’s economy has contracted over 9%, compared to 3% in Spain (the best y-o-y number in Western Europe). This is consistent with my explanation.

The examples you give about revitalization of intermediate cities on the AVE are true for the TGV, too. If I’m not mistaken, there’s a big office park in Aix-en-Provence near the TGV station (but the local economy is still dominated by tourism). Nord-Pas de Calais has managed to slow its decline because of the LGV Nord. But in neither case has the line prevented decline, and Marseille and Nord-Pas de Calais are still poor and deindustrialized. More instructively, Lille has a metro population of more than 1 million, but not enough travel to Paris to justify the construction of the LGV Nord by itself, without connections to London and Brussels. This suggests that even a city of about 1 million people should not be a terminus for HSR, unless it offers good connections to larger cities.

ridership in Spain is still lower than in Korea and Japan, but that’s because it is brand new and end stations are not connected yet. E.g. the line to Barcelona is less than 18 months old, and Seoul is more populated than Madrid and Barcelona combined.

However, the economic effects are already being felt, especially in middle-sized cities: much more business tourism, innovation-related industries are being attracted (e.g. IT companies in Ciudad Real and Lleida, etc.) and people are starting to move more around. Japan and Korea are highly centralised countries with extremely low entrepreneurship and an underveloped tourism industry, but Spain is reaping the gains from this higher mobility fast.

On the population front, Spain’s has grown from 39 million 12 years ago to 47 million people now (immigration accounting for almost all this growth). However, population has decreased in those areas with bad rail access and has increased the most in new smallish AVE cities. So, just as you can’t compare the effects of building airports and highways in a long-run declining, depopulating economy (Japan), you probably can’t compare high-speed rail effects in a long-run economically and population-wise booming country (Spain).

The idea of turning the entire country into Tokyo (or Paris, or Madrid, or Seoul) has failed elsewhere. Despite the Shinkansen, all parts of Japan except Greater Tokyo and Greater Nagoya are losing population, due to both low birth rates and migration to Tokyo. And the TGV has done nothing to revitalize the economy of Marseille, which remains poor and less developed than the TGV-less Riviera cities to its east.

Spain is not looking up to Japan for an example. We haven’t even gotten started and we already have nearly three times more km in high-speed track than Japan on a per-capita basis.

I don’t really know Japan, but the pattern of Spanish movements is surely different. Akita has no manufacturing basis, while Vigo and La Coruña manufacture cars, windmills, ships and design electronic devices and clothes. Moreover, tourism is far more developed in Spain than in Japan, and the pattern of family visits is different, too.

Especially innovation-intensive activities, which in Japan would typically happen in the 3-4 main cities, need a deep labour pool that only occasional visits from professionals living away can make up for. That’s why tiny Orense and smallish Albacete have set up regional science parks near their AVE stations.

In other words: if you can have your own Tokyo (or Silicon Valley), try to turn the whole country into Tokyo (or Silicon Valley) through high-speed rail.