3. Research for policy development: Industrial clusters in South China

Abstract

This research study analyses the development of industrial clusters in three institutional contexts in South China to better understand how policies have been developed and implemented to encourage innovation. The authors trace the growth of private enterprises within these clusters, and note that this growth was assisted by local governments and by links with foreign companies, which were instrumental in upgrading networks of suppliers and bringing in foreign expertise. The research shows that innovation centres have begun to create networks of enterprises, improve innovation capacities, and enhance communication with universities and research centres. In some districts, local government policy has promoted innovation centres, especially during diffi cult economic times, when a need for better quality and higher priced products made sense in China. As such, the innovation centres were mainly oriented toward servicing the local industry, rather than maintaining a competitive edge. The research team concludes that ‘marketized’ research centres have a greater probability of success than innovation centres because they base decisions on selling products. Since 1999, China has actively promoted innovation policy to reinforce the technological capabilities of smaller fi rms, while continuing to promote larger multinational fi rms. At the same time, public research centres have undergone rapid ‘marketization’,2 which has transformed many former public engineering research centres into enterprises. It is much too early to assess this strategy, but the speed with which private fi rms and collective enterprises have acquired, adapted and promoted new products, and new productive processes, is remarkable. Moreover, the information technology (IT) sector has grown at an unexpectedly rapid rate, and has become the main sector for investment and technological development. This project used empirical evidence to describe the links between scientists and non-scientifi c clients in different institutional contexts in Guangdong Province. It had three objectives: • to investigate the innovation system for research and development (RD 40 FUELLING ECONOMIC GROWTH • to understand the dynamics of the relationships between research units and the non-research technological users in different social, economic, and institutional contexts (content of the links, motives, resources, and incentives); and • to promote the creation of a pool of excellence on science and technology policy by providing an empirical basis to policymakers. The institutions that were studied were located in three different institutional settings: Zhongshan University (City of Guangzhou); the industrial districts of Xiqiao (City of Nanhai) and Dachong (Zhongshan City); and a large industrial district producing motorcycles in Pengjiang (City of Jiangmen). Also, an industrial cluster that had no innovation centre (in Dongguan), but an important industrial base, was studied (Table 3.1).