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Industry Parks Aim at a Better Future Through Innovation in China

CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong, recently pointed out that industry parks of today should become more internationally-focused, and transformed from places of industrial clustering to ones of service industry clustering. "Industry parks" in China refer to regions of industry concentration, such as economic and technological development zones, cutting- edge technology industry development zones, export processing zones and bonded areas. These parks mainly consist of operating entities like economic and technological development zones, and cutting-edge technology industry development zones.

From industrial clustering to service industry clustering
CCID Consulting comments that industry parks should speed up transformation from a place of industrial clustering to one of service industry clustering to push forward their role in driving and supporting the changing industrial development in cities and even surrounding regions. There are two reasons for this. Firstly, industry clustering in certain areas takes up a large portion of agricultural land, which puts it in opposition to the State's land policy. Secondly, the positioning towards service industry clustering allows industry parks to attain more room for growth, which enables them to develop naturally, and even give greater play to their own role in driving forward economic growth in surrounding regions.

Industry parks' focus on industrial clustering is an important reason for their continuous land expansion. As they once adopted a development route of industrial clustering, these industry parks were bound to suffer from a lack of land space. Continuous land expansion has been a necessity for them as they have failed to upgrade their strategic thinking to become more service industry-oriented. CCID Consulting believes that industry parks have tried to become the powerhouse and radiator for overall industrial growth through providing a more suitable investment environment and attracting key institutions in the industrial clustering process. They do not complete industrial clustering on their own.

The breakthrough for improving the role of industry parks lies in a change from an industrial clustering oriented transformation towards a service industry clustering-oriented transformation. Once they become a gathering place of R&D, incubation, technology exchange, logistics transfer and professional outsourcing, which are peripheral to the service industry, industry parks will not only greatly improve their own economic performances but also play a considerable role in promoting social and economic development in the peripheral industries. Industry parks' leverage role in cities is thus an important indicator for measuring their strategic role.

From a domestic view to a world view
One important direction for industry parks to make strategic transformations in the future is to adopt a global mindset when adjusting their industrial structure and positioning their development. In their future development, industry parks should change from a focus on expansion of scale to pooling their advantageous forces to develop leading industries and improve their industrial competitiveness. They should step up efforts to integrate the "industry park" into the international industrial specialization system. They should keep pace with international technological developments. For example, Yiwu in Zhejiang Province has brought its small commodity wholesale to the world market through a specialized regional market. This is the growth benefit which has been brought about by the city's international positioning.

Firstly, based on a better understanding of the global development trend, industry parks need to focus on developing industries with competitive advantages, make full use of their comparative advantages in the international division of work, combine their industrial structural planning with the world industrial development trend, and formulate new industrial strategies plans and business promotion schemes. Eventually, such plans could help to improve their overall regional competitiveness. A global orientation does not exclude positioning towards local services. On the contrary, it can speed up local social and economic development and contribute to the improvement of national competitiveness.

Secondly, CCID Consulting suggests that industry parks should achieve a chain layout of ''international core enterprise-international supplementary enterprise-international clustering effect''. They should formulate business promotion plans with an international vision, take up those hi-tech and high value-added production links in an industry and claim certain higher industrial and technological high ground based on their overall strength and comparative advantages. The formative mechanisms of international industrial specialization are changing from self-promoted specialization in the market to the operational specialization by enterprises (mainly multinational companies) and organizational specialization by members of regional industrial groups. Industry parks therefore need to implement a number of supplementary projects for key international industries and key enterprises, and improve their ability to offer supplementary services to attract specific international industries.

Change from extensive management to the refined services model
The administrative committees of industry parks should hand over operational responsibilities of more intermediary services incubation investment and financing to market institutions. This will allow them to achieve a more ''refined'' management and overall service. Portal website- based services platforms will become the main development direction for IT applications in industry parks. Due to the lack of smooth and effective channels of information communication between industry parks and their residential enterprises, there is information asymmetry between them. The management and services which industry parks provide cannot meet enterprises' needs. Industry parks cannot get first-hand information about enterprises either. Through refined management and shared services platforms, industry parks and their residential enterprises can maintain real time information communication, engage in full information exchanges and sharing, and optimize the management of the information chain. Through receiving the latest enterprise information, industry parks can offer enterprises services specially tailored to them.

To sum up, China needs to give up many of the outdated and unsuitable ideas that still exist in its development strategies and plans for industry parks. These include static situational judgment, narrow regional interests and coarse division of industries. Such factors fundamentally prevent industry parks from playing their due role. CCID Consulting comments that industry parks' strategic breakthroughs and transformation have been growingly concentrated on three major aspects, namely transformation of industry clustering to services industry clustering, transformation of extensive management to refined services, and transformation of domestic positioning to international positioning. Industry parks need to draw implications from these for their future development road and take more effective actions.

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