Disadvantages of Liaoning Industry Cluster and Proposals for Optimization

时间:2022-08-05 04:49:50

(1. Liaoning University of Science and Engineering, Benxi City, Liaoningrovince, China, 117004

2. The School of Maths in Central South University, Changsha City, Hunan Province, China, 410012)

Abstract. The formation of industry cluster in Liaoning Province, the earliest northeastern industrial base of China, has been fast, which has an obvious influence on economic development in the area. This paper discusses the current development of Liaoning industry cluster, analyses the disadvantages based on realities of situation, proposes problem-solving strategies and suggestions, having an essential significance to optimization of Liaoning industry cluster and economic development of the province.

Key words: industry cluster development policy optimization.

1. Introduction

The idea of cluster was firstly introduced by Adam Smith, the “father of modern economics”. In 1990, Michael Porter analyzed the cluster phenomenon by introducing the term “industry cluster” for the first time. The study of cluster in China began from the 1990s onwards, developed after the year 2000. Domestic scholars have studied much about the implications of cluster, and there are less empirical analyses on the application of models and data. The quantitative and qualitative analyses of a certain region’s development model are insufficient. However, it can not be denied that the formation of industry cluster can create competitive advantages, boost transactional efficiency, lower transaction cost, and improve the regional economic development.

2. Development status of Liaoning industry clusters

Having the Northeast Area Revitalization Plan from Chinese government, Liaoning Province has developed 4 geographically concentrated clusters, ranging from equipment manufacturing, chemical engineering, agriculture products processing, to raw materials further processing, to form the mainstay industry clusters. Meanwhile, there are 33 emerging industry clusters, including new energy, new materials, new medicines, information, and environment care, which totally account for 27.5% of all clusters.

From the regional distribution point of view, industry clusters in Liaoning mainly locate in Shenyang and Dalian, while Anshan, Dandong, and Jinzhou have 10 clusters respectively, and the number in other cities ranging from 4 to 7. Currently, the clusters in Liaoning are situated in three main areas: the Shenyang-centered central Liaoning development zone, including Anshan, Fushun, Benxi, Yingkou, Liaoyang, and Tieling (transportation equipment industry, and the bioengineering and pharmaceutical industry); the coastal economic zone with Dalian as the head, including Dandong, and Yingkou (Petrochemical processing industry,electronic information and software industry); and the west Liaoning development zone, with Jinzhou, Panjin, and Huludao as representatives, including Fuxin and Chaoyang (new energy and new materials industry,and fine chemical industry etc.).

In terms of the level of development, the degree of agglomeration in Liaoning still has a long way to go compared with the developed provinces. These clusters have just finished the first steps of industry concentration, with industry clusters formed on the broad term, while more regional and more specialized clusters are still developing, having both advantages and disadvantages.

3. The facing problems of industry clusters

in Liaoning Province

3.1 Lack of balance upon the overall development status

Among the overall industry clusters, Shenyang & Dalian are the two most identified regions where the development trend is optimistic. In some other regions like Benxi & Yingkou, the beginning phase of development has been accomplished, now trending forward towards further mechanism innovation, while the rest are still in the progress of formatting regional industry clusters. However, unlike Guangdong, Jiangsu, Zhejiang - the developed provinces in the south of China, the developing environment of industry clusters in Liaoning is quite limited due to the slow growth of local small & medium businesses, even though the growing capacity is considerable.

3.2 Limited industrial cluster size

Nowadays, the size of 63% of industry clusters in Liaoning falls under the scale of 1-10 billion (RMB), while the average industrial cluster size is 3 billion. Only a few of the concentrated area clusters reached size of over 10 billion, while some early-stage concentrated area clusters could hardly hit 1 billion. Some firms from the local industry clusters started in small scale with very limited assets, most of which were transformed from villages and small towns. It turned out to be that the small & medium enterprises couldn’t develop as expected with no procession of important core technology. And this has restricted the development of overall industry clusters in Liaoning Province. It is difficult for the industry clusters with output value lower than the average scale level to bring significant growth upon the overall industry development.

3.3 Lack of cognition & necessary collaboration

As a new economic organization model, industry clusters model is not well understood & adopted by some of the firms due to lack of the value cognition. Some of the firms even think that it is just simply organizing similar firms as a group to draw investments to establish projects by setting firms covering similar industries within a united site. And the firms are actually doing this by competing with each other with similar products for individual benefits, which has brought the regional competition into a counteractive way instead of developing it properly, which is also not good for local resource protection or utilizing available resource wisely.

4. Proposal of industry clusters optimization

in Liaoning province

4.1 The government

1.Positive guidance, rational planning

Drawing up all the necessary policy which could promote industry clusters growth & development efficiently based on overseas successful practice, such as simplifying industrial structure of the high clusters agglomeration, encouraging brand merchandising. The government should formulate more distinctive development strategy to push regional industry clusters growth based on respective local situation and national market trend.

2.Establish scientific industrial cluster statistical analyzing information system

To establish scientific statistical analyzing information system is the pre-condition for formulating efficient industrial cluster strategy. To implement the concept of “industry clusters”, it requires professional talent to study on the industrial cluster layout allocation & agglomeration, and perform statistical analysis. So that complete industrial agglomeration performance evaluation system could be established, as well as the efficient industrial cluster development strategy.

3.Reinforce industry development environment construction

Reinforcing the material environment includes enhancing the basic facilities like: manufacturing belt, industrial zone, production base, and constructing convenient transportation network, professionally equipped terminal market and logistics system. To reinforce the soft environment includes: improving government efficiency, providing remarkable high quality services, formulating relevant strategies, optimizing legal environment, boosting proactive efficiently communication platform for the talents from different regions. So basically it is meant to promote steady growth by reinforcing both the material & soft environments of the industrial development.

4.Accelerate basic county facilities and social service system establishment

To deliver superior material environment for county industry clusters, accelerating the construction of traffic, water and electricity facilities becomes a must. Meanwhile, to improve efficiency of the coordination management such as: market development, quality assurance, technical support, personnel training, etc, establishing more complete social service system also becomes a must to deliver superior soft environment for county industry clusters. And to set up a county credit guarantee organization would be a practical way out to resolve fund shortage problem, while enabling a financing channel for the firms in the county which would be helpful for speeding up the pace of development.

4.2 The firms

1.Be scientific oriented to achieve brand distinctiveness

The characteristics of industry clusters have become more identifiable along with the development of regional economy. To stand out of the overall industry clusters, it is necessary to be scientific oriented upon the firm orientation by analyzing the regional history and culture where the firms are allocated, as well as the international market trend. By doing this, the firms could make a stand during the market economy competition, while achieving their brand distinctiveness.

2.Enhance the capability of independent innovation

To be constantly competitive, it is important to keep enhancing the capability of independent innovation. The firms should continuously insist on innovating and designing their products independently by proactively participating in competition of product differentiation, avoiding simply duplicating the same production mode. Hence, to improve innovating capability and keep boosting the overall clusters upgrading, the firms have to increase the internal investment upon researching & developing forces, to strengthen on the technical communication with scientific research institutions.

3.Enhance cooperation

The cooperation among industry clusters should be multi-level based. This circumstance urges the firms to transform the cooperation mode to be vertical-leveled. Driven by the large enterprises, more small firms would be gathered, providing complementary support by concentrating individual advantages upon resource, brand, fund, and information, etc. it is also known as “1+1>2” strategy, which plays quite important role to enable the overall clusters upgrade and enhancement on the product Competitiveness.

4.Strengthen on talent introduction and personnel training

All the regional economic competition is actually the competition of talent. Talent is the key source of firm development. Therefore, it is important to draw up flexible and scientific talent mechanism for bringing in more talented talents, as well as strengthen on the input for excellent talent introduction. Meanwhile, building up connection with colleges and universities for talent training cooperation projects could also be an effective way to attract more talents, enhance the international level of talents.

Industry clusters, as an efficient way to achieve industrialization, indicate the competitiveness of a nation or a region. industry clusters are also the practical option for Liaoning province to pursue for further economic growth, while industrial layout optimization has been recognized as the fundamental to clusters development. To strengthen the industrial fundamental in Liaoning province, firms in the clusters should deep drive cooperation opportunities among multiple regions, and further enhance the cooperation efficiency by taking independent innovation as the fundamental driving force while leveraging the available environmental & policy advantages.

5. Acknowledgement

This research was financially supported by the social science plan fund project of Liaoning province in 2013 (The present situation evaluation and expectation of the industrial cluster of Liaoning province, the project approval number L13WTB005)

References

[1] Li Bin. Liaoning Industrial Cluster Upgrading and "Shen-Ben Integration" Development Countermeasures[J]. Commercial Times, 2010, 12: 138.

[2] Zhang Xiaofen, Zhang Yue. Liaoning Industry Cluster Development Model and Path Analysis[J]. Journal of Liaoning Institute of Technology (Social Science Edition), 2012, 14(5):12-14.

[3] Cheng Yongjun, Ding Wei, Liu Changwei, et al. Liaoning Industrial Cluster Development Research[J]. Chinese Consulting Engineers, 2007, 5:19-22.

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