Industry Cluster and Promotion of Industrial Competitiveness

Industry Cluster and Promotion of Industrial Competitiveness
SUN Yang1, YANG Jie2
1. School of Foreign Studies, Northern Coal Medicl University, P.R.China, 063000
2. School of Economics and Management, Hebei Polytechnic University, P.R.China, 063009
[email protected]
Abstract: Industry cluster as a kind of organized form, the influence of which on industrial
competitiveness has caused extensive concern in the economic theoretical field of recent years. The
main genre of Industry Cluster and the meaning and conception of it are analyzed; the influence of
industry cluster on the promotion of industrial competitiveness is set forth, and the realistic meaning of
industry cluster theories to the economic development in our country is discussed in this paper.
Keywords: industry cluster, industrial competitiveness, cluster effect
With the arrival of globalization economy and network information age, the competitive way of industry
is changing greatly. The industry strategy is changing gradually from simply pursuing profits to
verification and regional concentration. In recent years, people also find that the industries possessing
competitive superiority on the global market often show obvious regional characteristics. Such as the
shoes manufacturing industry in the north of Italy, grape wine industry in California of U.S.A., shoesmaking in Wenzhou of our country, automobile industry of Japanese, automobile industry in the south
of Germany, amusement movie & TV industry in Hollywood, the semiconductor and information
industry in Silico of Valley etc., their competitive advantages seem to have a close connection with local
areas.
1 The Development of Industry Cluster Theory
The research of industry cluster mainly has three flows: Economic theories of exterior, cluster economic
theories and new competitive advantage theories.
Economic theories of exterior is brought forward firstly by A Marshall, different economists have
different definitions. Marshall put forward two important concepts of “internal economic scale” and
“exterior economic scale” in the economics principles published in 1890. He holds that internal
economic scale is originated from organization in a enterprises and management efficiency; exterior
economy is from numerous enterprises contacting mutually that concentrate on the particular place.
The theory of cluster economy was firstly put forward by an industry Niche economist named A.Weber.
After Matthus explained the cluster phenomenon from the economics angle, A.Weber studied the cluster
further from the industry niche of angle, and firstly put forward the concept of cluster economy. The
factor of region is divided into the district factor and cluster factor in the industry niche theory published
in 1909.[1]
M.E.porter pushed industry cluster theory to new high peak, he re-examined the formation mechanism
and value of industry cluster from competitive advantage angle created by organization change, value
chain, economic efficiency and gentle aspect.
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2 Conception and Characteristic of Industry Cluster
Industry cluster means a group of enterprises and relevant legal person's organizations with mutual
relation, and binding with mutual compatibility and complementary in the specific field.[2] The
definition of relevant industry activity is very important, for it is the key to industry cluster. Porter
thinks that industry cluster has a lot of different forms and its complexity is distinct too. But every
cluster is made up of the cluster enterprise having industry's relation. [3]
The economists find that industry cluster phenomena appearing in a lot of regions, not merely existing
in the developed countries, for instance, there are typical cluster phenomena of manufacturing industry
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in U.S.A, but also existing in developing countries. It has industry cluster phenomena in the
manufacturing industry as well as in the service trade. Therefore, the main characteristics of industry
cluster are as follows:
Cluster has specialized characteristics: Its member enterprises include upstream suppliers supporting
raw materials, mechanical equipment, spare part and the serve applied to production; seller, network,
customer in the low reaches; The side is extended to relevant enterprises such as the complementary
manufacturer, skill & technical training and profession intermediary.
Characteristic of geographical cluster: The related industry and its supporting enterprises or organization,
such as local government, profession association, financial department and educational and training
organization, is a kind of flexibility that produces synthesizes on the space of cluster, and it often
represents key competitiveness of the area.
3 Influences on Industrial Competitiveness of the Industry Cluster
Industrial competitiveness is born gift to the ability of reflection and adjusting of resources structure
(comparative advantages) and the market environment in a nation or region. The related enterprises live
together, competing and cooperating mutually, which has a strong promoting function on raising the
industrial competitiveness. Porter professor thinks that the industries gathering together can bring out
extensive and aggressive influences on the competitive advantage of the industry. Seeing from the
competition of the world market, the products that have the international competitiveness, usually live
together and do not disperse here and there. The influence of industry cluster on industrial
competitiveness is mainly embodied as followings:
3.1 Industry cluster enhances the whole competitiveness of the industry
The cluster strengthens the competition, and competition is the important impetus that the industry
acquires the core competitive ability. The competition not only expresses the fight to the market, but
also on the cooperation. Living together in the same place, evaluation mutually of the same industry has
the surveyor's staff of outstanding achievement, and it also brings out the pressure of the competition for
each enterprise in the industry. Good performance of enterprises can achieve success from it, but worse
performance of enterprises will feel the pressure. At the same time, as they live near in the geography,
the self-consolidate mechanism in the inner parts of industry cluster will form the nature choice
mechanism of "excellent win inferior discard", stimulating the innovation and deriving forms of
enterprises.
Firstly, the competition in the industry forces each enterprise to reduce the cost continuously, improve
its products and services, and chase the wave tides of the technique transformation. Because enterprises
live together, and the rival is close at hand, enterprises can never satisfy and it must be the continuous
creation of each enterprises inside the industry that can improve the competitiveness of the whole
industry; Secondly, the competition inside the industry can make other business enterprises acquire the
better position in the competition. It manifests as follows: the rival can absorb the periodic demand
undulation, which can make enterprises use the production ability more adequately; The rival is as the
comparative standard of enterprises product value, which can improve the innovation ability of the
business enterprise; the rival optimizes the structure of the whole industry, for example, adding the need
of the industry, raising the popularity of the product; providing the second or the party sources; thirdly,
enterprises approach to the employees and components. Enterprises located in the industry cluster,
provide more chances to approach to the best professional components of excellence and low cost,
including zero parts, machines, the services of enterprises and human resources. So when the
competition of the native suppliers is vehement, industry cluster represents a kind of organized form of
inborn validity and more efficient resources allotment; fourth, each enterprise inside the industry can
develop the market cooperatively in creating new products or the burgeoning industries.
3.2 Industry cluster strengthens cooperation of enterprises inside the cluster
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The professional division of labor and cooperation formed inside the industry reduce the bargaining cost
and create the exterior economy and collective efficiency. Firstly, looking for the resources (the regional
purchase) toward internal members of the industry is much lower than buying far away. Purchasing in
the cluster can make communication more convenient, and it can also reduce the cost of modification
and make the cooperation more easy; Reducing the cost of the component in long-distance, the supplier
can provide the better price and manufacturer can also use the way to deliver goods more efficiently;
Secondly, the cooperation is raised in the cluster. People find that many workers only gather together,
and their work can complete well. The foreigner wrote a book named The Cooperation-competition Is
Popular in the Future, in which they said “the real innovation of enterprises indicates that organizations
can produce the variety with the method of solidifying and cooperation, and the composition of forces to
create the value; The method of new economic cooperation was developed by the company, which
helped enterprises to obtain the unprecedented benefits and competitions.” enterprises cluster gathering
together strengthens the competition, but the competition does not reject the cooperation. The
competition manifests not only on fighting for the market, but also mostly in pursuit of the outstanding
psychological stress. In the process of the creative technique appearing continuously, there are no
companies which can complete the research and development of a product independently; at the same
time, enterprises in order to cope with the exterior environment changing quickly, they also must
establish the network with other business enterprises and solve the problems together. Exchanging and
cooperation with the competitive industry of the same profession and sharing the knowledge and
information altogether are not only possible but also necessary. The theories of modern organization
predict that the form of enterprises uniting together inside the industry will be very likely to be a future
current, which will replace a man-to-man competition.
3.3 Industry cluster strengthens the creative ability of the districts and enterprises
Firstly, enterprises inside industry cluster can usually become aware of the new customer's demand
more clearly and quickly. Because enterprises benefit from customers’ knowledge and relation of the
same profession living together, enterprises of paralleling development in the related industry, and
specialization of information organization, and the shrewd customers. Enterprises in the cluster can
recognize the requests and wishes of the customers more quickly than the rivals of fighting
independently. Secondly, in the aspects of new science and technology, management, industry cluster
has the advantages. The members of industry cluster will learn the relevant development technique, the
equipments of machine, the concepts of services and marketing etc., and the persistent relations with
other entities inside the cluster, visiting with each other conveniently, usually getting in touch with face
to face, all contribute to this kind of learning process; Thirdly, the industry clusters have latent
advantages of satisfying creative demands and the opportunities. The local supplier and colleague can
cooperate closely in creative process, which can ensure the material fulfill the demand of enterprises;
fourth, the competitive pressures urge enterprises to create continuously. The creative pressure is higher
and higher in industry cluster, and the individual enterprises is very difficult to keep ahead over a long
period of time, but many business enterprises comparing with those in other locations make progress
much sooner.
3.4 Industry cluster has given play to the resource-sharing effect
Industry cluster has the characteristic of geography gathering; therefore, the related industry and its
supporting enterprises or organization, such as local government, profession association, financial
department and educational and training organization, is a kind of flexibility that produces synthesizes
on the space of cluster, it often represents key competitiveness of the area. In addition, the forming of
cluster makes the government willing to invest in such public utilities as relevant education, training,
examining and determining; meanwhile, the establishment of these facilities has obviously promoted the
development of enterprise in cluster. Sharing public goods makes resources have higher application
efficiency in industry cluster, and the regional brand greatly strengthened enterprises’ relative
competence. It is worth pointing out: The prerequisite that the cluster bringing out effect is that it has
formed the organic division of labor and cooperation relation around the related industry and industry
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chain in the cluster, and this is exactly the place where industry cluster development should be highly
paid attention to.
4 The Significance to Our Country’s Economic Development of Industry Cluster
Theory
4.1 Industry cluster can bring regional competence
Under the condition of the global competition, successful district usually has its core competence as the
successful enterprise.
In our country, it depended on the industry cluster that the economy construction in relative developed
province has got prominent achievement. In Guangdong and Zhejiang province, the industry that lots of
enterprises get together in is the toy, food, fashion, electronic, household appliance, ceramic and so on.
The Yanbu town in Guangdong, Nanhai is the base to produce underwear. There are more than sixty
countries and one hundred and fifty thousand workers to produce underwear in it. Shaxi town is the
biggest base to produce sports wear in our country, for it has four hundred and ten companies and more
than thirty thousand workers. In addition, there are the fashion industry cluster in the city of Ningbo, the
textile production industry cluster in Shaoxing, the leather production industry cluster in Haining, and
the shoe leather, fashion, low voltage apparatus, mark and the badge, fastener, lighter and lamps
industry cluster in Wenzhou. [4]
Exactly industry cluster has the whole function that is greater than the sum of the part, so when
industrial park or development area is established we should developed the distinctive industry and lead
the different enterprise belong to the same industry to get together, then they can divide the work to
cooperate, reduce the expense in the deal and bring the cluster effect. For the type of industry cluster, it
may be the high new technique and also can be the tradition industry, it could be agriculture also be
industry. From fastener to trailer as long as they are needed for man, as long as they can create the
wealth, they all can be developed to the industry cluster to acquire the district competitive advantage.
4.2 The formation of industry cluster is spontaneous
The theory in the front tells us that the basic direction of industry cluster’s formation mechanisms is
self-moving. Therefore, at the place where lack of the base of economic foundation and social cultures
it’s impossible to produce the industry cluster factitiously in a short time. While depending on the selfmoving formation and having no artificial effort completely, it also can't make the industry cluster to
develop healthily and steadily, so the formation of multiform industry cluster should follow this
regulation in our country.
Associating various development area of our country, we can know that some development areas
followed the inherent regulations, and they considered various resources and original foundations
around the development area. But some others haven’t done as so, they depend on the rallying point of
the government and the function of the policies only. Although the government spend money in setting
up the corollary installation such as infrastructure etc, it’s hard to say they can put into work.
4.3 Developing industry cluster, building regional innovative environment
This case area has been given new meaning----Place where knowledge is accumulated and circulated
constantly. In order to get this kind of effect, the government should build such regional innovative
environment actively. Regional innovative environment is also called innovative network and is formed
by the economic network (the unofficial economic contract among the behavior subjects) together. In
order to build such regional innovative environment, industry cluster needs to possess hard environment
and soft environment needed in industry development. The hard environment refers to modernized
infrastructure, convenient means of transportation and related production service facility, etc. The soft
environment refers to the network system, namely the steady relation based on the cooperative
foundation for a long time among enterprises and enterprises and scientific research institution. Such
soft environment includes three levels:[5] (1) Medium environment, including such contents as
educational level of people, psychological quality, values concept, social conduct, etc. (2) Organization
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environment. Including various kinds of organizations and systems created for relation among
innovative subject in the area, such as financial institutions like bank serving for the fund, the personnel
exchange center serving for workforce flowing, the guild established for strengthening the exchange and
cooperation of same trade or business personnel. (3) Adjusting and controlling environment. It pointed
out that government gives play to the role of macro adjustments and controls; makes a lot of relevant
innovative subject to have cooperative effect.
References
[1]. Jian Zheng, Xiaobo Wu. The motivation of sustainable development of small and middle
enterprises, Theory and Management of Economics, Beijing, 2002,(3), pp31~33.( in Chinese)
[2]. M E Porter. Discussion of competition, Zhongxin Publisher, 2003, p211. ( in Chinese)
[3]. M E Porter. Discussion of competition, Zhongxin Publisher, 2003, p221. (in Chinese)
[4]. Yi-shao Shi. Theory of enterprise cluster and practice in China, Tongji University Journal Social
Science Section, Shanghai, 2001 (4), pp41-46, 62. (in Chinese)
[5]. Zhiyuan Zhang. The attitude of the industry cluster base on the core competitiveness of enterprise,
Humanities Magazine, Xian, 2001, (4), pp72~77. ( in Chinese)
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