Download On Development Strategy of Industry Clusters in Binhai New Area,

On Development Strategy of Industry Clusters in Binhai New Area,
Tianjin City
LI Xiaolong, MENG Xiaozhe
Tianjin University of Finance & Economics, Tianjin (300222), P.R. China
[email protected]
Abstract
Industrial clusters play more and more important role in regional and national development,
and many researchers pay more attention to industrial cluster. In the developed countries, cluster
economy based on the industrial cluster has become an important part of the economic development.
Local governments regard industrial cluster as the important part of industry development. This paper
outlines the development model of industrial cluster in TBNA (Tianjin Binhai New Area), discusses the
further improvement of the cluster model, and makes proposals for industrial development of TBNA.
Keywords Tianjin Binhai New Area, Industrial cluster, Industry chain, Regional economy
1. Introduction
In the last decades, emergence of a large number of industrial clusters in different countries becomes a
particular phenomenon in the world economic development. With the development of modern
transportation and information technology, industrial clusters keep on developing and are playing more
and more role in regional and national competition and development.
Cluster phenomenon emerged in the early 18th century in Britain. From the 1970s, more and more
researchers began to focus on industrial clusters. The first economist who studied the phenomenon of
industrial cluster is Marshall. Marshall explained the phenomenon that the enterprises based on the
external economy were in the same region. On analysis of the metallurgical industry organizations, he
proved that the enterprises gathered for the external economies. Porter proposed an industrial cluster
theory of new competition economic system. He argued that a large number of small and medium
enterprises and institutions in a particular industry gathered in a certain geographical area to form the
industrial cluster which was a stable aggregate with sustainable competitive advantage. He defined the
vertical enterprise cluster and the horizontal enterprise cluster. Vertical enterprise cluster is an enterprise
cluster linking a large number of enterprises. Horizontal enterprise clusters is an enterprise cluster
component by sharing the end products market, the use of common technology, skills and the similar
natural resources. J.A Theo, Polelandt and Pim den Hertog further expanded the meaning of the
industrial cluster. They defined industrial cluster from the perspective of the network organization.
Bergman defined industrial cluster according to the extent of relationship between different economic
activities. He argued that the judgment standard of industrial cluster was whether the employment
between two economic activities is related in a group of economic activities. Schmitz researched
competitive advantage and the development of industrial clusters in developing countries.
As a growth model of regional economy, the expansion advantages of industrial clusters are far superior
to individual enterprises. Industrial clusters can stimulate regional economic growth, the expansion of
new businesses, the industrial chain and the industrial integration in huge area and in a short time. The
enterprise in the cluster can easily access to the whole and systemic function of the industrial cluster,
while the individual enterprise can’t do. Because of lower cost (the production cost, the transaction costs
and the policy costs), easier cooperation and more furious competition within the clusters, the
competitiveness of enterprises has greatly improved. Furthermore, increasing the cluster advantages also
help to improve the whole regional core competitive capability.
Existing literatures focus mainly on why industrial clusters appear and grow and what factors impact the
development of industrial clusters. And they discuss why industrial clusters have the competitive
advantages. From different ways, these literatures state how various industrial clusters form, what
competitive advantages the industrial clusters have, and in what conditions the industrial clusters must
develop their sustainability. But existing literatures about industrial clusters discussed little on the
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sustainable development.
2. The advantage and disadvantage of tianjin binhai new area in the development
of industrial clusters
In March 2006, the development and opening of TBNA was officially incorporated into national
development strategies. On May 26th, The State Council published “views on promoting the
development and opening up of TBNA”, which means TBNA has been officially launched to develop
and open up. The development and opening up of TBNA has provided an important opportunity for
Tianjin Binhai region as a whole. However, how to develop and what is the most driving forces for
sustainable development of TBNA is still an important problem. In order to get its own unique
competitive advantages, TBNA should plan, build and develop the related industrial clusters.
TBNA is developing to a modern industrial base, by introducing foreign high-tech industries and with
the eastward shift of the strategic industry in Tianjin. Now there are six competitive backbone industries:
electronic information, oil and petrochemical, marine chemicals, motor vehicles and equipment
manufacturing, modern metallurgy and food processing. The GDP of these six industries accounted for
up to 89% of the GDP of TBNA. But now in order to build modern manufacturing and R&D base,
TBNA is focusing and forming six high-tech industries: electronic communication, biological medicine,
light mechanical and electrical integration, new materials, new energy and new environmental
protection. These new manufacturing industries are the leading industries of the TBNA. TBNA has
created the embedded industrial cluster model. During “11th Five-Year Plan”, TBNA invested 110
industrial projects and average investment in 110 projects is more than 100 million RMB Yuan. The total
investment reached 255 billion RMB Yuan. It’s helpful for the further development of industrial
clusters.
However, there are still many defects of the industrial cluster model in TBNA:(ⅰ) leading industries
are too much wide. As mentioned above, TBNA has six competitive industries and six high-tech
industries. In addition, other industries such as logistics industry have also been put on the agenda. If
forming corresponding industrial clusters on every key industry, the width of the region cluster will be
too large. Under the condition of limited resources, too wide cluster coverage would tighten the resource
constraints of specific industrial cluster development. It’s harmful to the long-term development of
industrial clusters. (ⅱ) Industrial structure is similar. At present, most of China's economic zones
simply consider the factors such as industry margins, industrial development prospects and industry
radiation power, when determining the industrial structure. These indicators across industries are similar,
so the industrial structure is also similar. Most industries concentrate on electronic information,
biological pharmacy, new materials, and new energy and so on. At the same time, every region is lack of
unique core competitive advantage. TBNA and Beijing Zhongguancun are rather near. There has been a
very intense regional competition and enormous gap. This competition at the same time weakened the
effect of two regional clusters. It’s unfavorable to the development of industrial clusters. In addition, the
industry of every region is similar. It’s a waste of limited resources. (ⅲ) Dependent on overseas
investment too much. Embed development model and the poor ability of independent innovation lead
the development of the region dependent on overseas investment too much. The fundamental purpose of
investment is not to solve local employment problems or to create more regional GDP, but to develop
local industries and prompt the development of the local economy. If the introduction of foreign-funded
enterprises just causes the consumption of local resources, then the foreign investment will become
meaningless, furthermore is harmful to sustainable development of local economy. While
foreign-funded enterprises develop rapidly, local enterprises must take advantage of the opportunity,
actively carry out independent innovation and R&D, and find and maintain a suitable place in the
industrial chain. (ⅳ) The effect of regional clusters is not obvious. The linkage between the business of
existing enterprises and agencies is weak, so it is unable to take full advantage of regional clusters. Few
enterprises enjoy the external economy. The ability of the core industries integrating the upstream and
downstream industries is poor. Most enterprises focus on the immediate target. They have to make
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reduce-price measurement as their main competitive policy, that policy often result to excessive
competition. The weaker market linkage and more furious competition directly affect the healthy
development of industrial clusters.
In a word, some industries are still scattered in the space. It is hard to make industrial cluster effect.
Some industries are extensive operations. The companies belong to different industries and there is little
linkage and cooperation between different the companies even though they belong to identical industry.
Formally, the region concentrated a large number of enterprises in the same area. But the upstream and
downstream firms around large and medium-sized enterprises are less, the infrastructure incomplete, and
specialization is not enough. This pattern is a "business focus", not an “industrial cluster”. Those will
seriously affect the advantages of region's industrial resources utility and the improvement of the overall
competitiveness. Particularly those will affect the sustainable development of the TBNA.
3. The suggestion of futher developing industrial cluster in thianjin binhai new
area
Based on above analysis, we suggest that TBNA should rely on existing functional structure, and build
industrial clusters with advantages. In addition, it should strengthen the construction of the industry
chain, deepen the industrial cluster and link several industrial clusters into a chain. At the same time,
financial industry should be paid more attention as a leading engine in the development of Tianjin
industrial cluster.
3.1 Adjusting and optimizing industrial clusters depending on their different advantages in Binhai
New Area
Through national financial and tax policies, Tianjin Government introduces foreign capital and
implements development policies. According to different geography, resources, environment and
infrastructure, TBNA has established Tianjin Economic and Technological Development Zone, Tianjin
marine high-tech development zones, Tianjin bonded areas, Tianjin Port and the Metro Industrial Park.
Every district has formed its pillar industries and industrial layout initially. However, industries still
similar and industrial distribution construct redundantly. Tianjin Technological Development Zone and
Tianjin marine high-tech development zone is an example. The two functional zones are closed in
geographic space and they both make electronic communications industry as one of its important pillar
industries. Therefore it is necessary to encourage the adjustment and optimization in order to healthy
development of industrial clusters in TBNA. Firstly, it’s necessary to further perfect its industrial
functional area, to develop its pillar industries depending on its relative comparative advantage and to
avoid duplicate construction between inter-regional organizations industry. Secondly, it is necessary to
avoid scattered industries and make the industry concentration. The improvement in this way will
strength the ties and mutual supports of different companies, and supply more chances for the
companies in the industrial zone to cooperate and collaborate. Thirdly, it is necessary to take some
measurements to avoid industrial competitiveness between similar industrial clusters.
3.2 Strengthening the construction of the industrial chain and the function of the industrial cluster
Until now, industries development in the functional areas of Tianjin still is independent and industry
correlation is low. Although some industry chains have just begun to emerge, their abilities of
integrating and influencing to surrounding regions such as Hebei, Shanxi and Liaoning is not enough.
In order to solve these problems and enhance TBNA capability as the economic developing engine in
the north of China, TBNA should support upstream and downstream enterprises, related infrastructure
and related services business, integrate the productive capacity of small and medium enterprises, and
form a stable, standardized professional collaboration and division of labor. Only in this way, large
enterprises can have an excellent service environment for their survival and development. According to
the development ideas of the "locomotive projects - industry chain - industrial cluster - manufacturing
base," TBNA should also establish a good industry chain in the cluster, strengthen the linkages and
collaboration between enterprises, and guarantee the rational allocation of regional resources and the
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dissemination of technological innovation knowledge within the cluster.
Madingkelishi Dov said “The competition is not really the competition among enterprises, but the
competition between the supply chains”. His view is very applicable in the macro-regional competition.
It is difficult to imagine that how a trade-oriented region competes with other region if there is no its
own production and external transport infrastructure. Relying on industrial structure, TBNA should form
a regional industrial cluster chain that “exploitation of marine resources - high-tech industries - the
modern business - logistics operations - Port shipping services”, which makes the mining of raw
materials, hi-tech industrial production, business, logistics operations and the port shipping services
become a chain link, achieving the integration of “for - production – sales”. The division and
collaboration between industrial clusters are clear. External and scale effects begin to emerge. Through
cooperation and competition between the upstream and downstream enterprises in the industrial clusters,
more tacit knowledge becomes the explicit knowledge. The explicit knowledge spread quickly between
the industrial clusters in the TBNA, and so do innovate new ideas, knowledge and technology. The
regional input - output efficiency will greatly improve and regional economy will lead to “scientific,
international and modernization”. Thus the international competitiveness of TBNA can enhance greatly.
3.3 Promoting the financial industry to turn into a leading engine in the development of Tianjin
industrial clusters
But in this way, the economic chain of TBNA is only a one-way chain. As the financial industry has
been steadily expanded, it will become a new force to promote the regional economic growth.
Exploitation of
marine resources
High-tech industries
Financial and
investment industry
Modern business
Port shipping services
Logistics Operation
Pic.1 Circulative Chain of Industrial Cluster
As the picture shows, the economic chain of TBNA will change into the cycle chain because of the
emergence of the financial industry. How to raise sufficient capital will be key whether TBNA can
smoothly upgrade its industrial structure. So the financial industry has become a source of the cycle
chain. The financial industry provides capital, technology and information services for the industry
development and production activities in the chain. And it promotes enterprise productivity. The
financial industry introduces and develops high-tech industries such as E-commerce. Thus the fragment
and integration of the industrial chain result to the industrial structure of low power consumption, low
pollution, high-yielding and high value-added. So TBNA greatly enhances regional economic strength.
At the same time, it introduces more and more foreign capital, leading a new wave of capital investment,
information explosion, recycling and optimization of the industrial structure. In short, as the point of
integration, the financial industry really completed a closed loop of the economic cycle chain. It plays a
central role in the modern economy. The strategic position of financial industry in promoting economic
growth of TBNA becomes more and more important. It promotes the healthy, sustainable long-term
development of regional economy in TBNA.
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