ABSTRACT
This chapter examines the concepts involved in the OVOP and the formation and development of the SHOCHU industry. It also examines the process of transformation of the SHOCHU industry as a result of continual improvements in its production system in spite of the strong pressure in Japan and elsewhere from the traders and associations representing Scotch whisky. An effective regional industrial policy should be grounded in the historical, and socio-cultural conditions of the designated area. This will make it possible to create new types of industry based on a variety of local resources and to promote continual transformation of production systems. The regional industrial policy of the central government to disperse industry from the metropolitan areas to the provinces has failed to attain great effect in industrial expansion and economic growth in the latter. In such a situation, the OVOP project started by a local government in Kyushu has been successful in developing industry by taking advantage of local conditions.
