Entrepreneurship and Industrial Upgrading: A Study Based on the Original Motivation of Economic Growth

Abstract

Entrepreneurship is very important to industrial upgrading. The reason why we choose this topic to research is that in 2017, we made an investigation about the industrial development in Suzhou City of Jiangsu Province in China. We talked to local entrepreneurs and found that most of them were very positive and passionate. Especially, when we talked about the future or expectation of their enterprises, they all had confidence and made plans to let their enterprises go further even become the industry leaders in the world. They treated their enterprises like their babies. There was an entrepreneur we had to mention. He was over 70 years old, but he was so enthusiastic. When we had a talk, he often spoke some English words. He told us that he would go abroad to do business for about seven months every year and his dream was to let most families in the word use his products. It was so amazing to us. Because most people in his age were retiring at home and just playing or traveling, but this entrepreneur was still fighting. We were all moved by his motivation and spirit which made us think over for a long time. Therefore, we hold a view that entrepreneurship is vital to economic growth especially industrial upgrading. The reason is that like a chef cooking, entrepreneur plays a role of organizing, operating and optimizing product factors such as labor, capital and technology, et al., which are main factors in the economic growth theory. Although there is much literature about entrepreneurship or industrial upgrading, the literature putting them together especially at the background of China is very sparse. Accordingly, in this paper, we analyze the relationship between entrepreneurship and industrial upgrading based on the Chinese current economic development. We will answer three questions: Firstly, can entrepreneurship stimulate industrial upgrading? Secondly, what are the characteristics of entrepreneurship affecting industrial upgrading if the answer of the first question is yes? At last, how does entrepreneurship influence industrial upgrading? In order to make clear the main characteristics of entrepreneurship affecting industrial upgrading, we issue a hypothesis based on a simply theoretical model, that is, entrepreneurship has a positive effect on industrial upgrading. Then, by utilizing the provincial data in our country from 2000 to 2015 and different kinds of econometric methods, we analyze and test the above hypothesis. Hence, we get some conclusions as follows: Generally speaking, entrepreneurship plays a positive role on industrial upgrading, but it mainly forces in eastern and middle areas in China. Moreover, with the evolution of industrial upgrading, entrepreneurship will play a decreasing role on industrial upgrading. It means that there are some factors which will hinder entrepreneurs to accelerate industrial upgrading. We find that during the process of accelerating industrial upgrading, innovation level, opening extent, government support and human resources cannot work well together with entrepreneurship. The reason may be that in our current economic development, industrial innovation especially the independent innovation is lagging and not all industries are open fully so that local enterprises cannot absorb external technical spillover adequately. Meanwhile, our government mainly supports state-owned enterprises so that most of private enterprises cannot get enough help or support. At last, although our country has carried out the policy of university enrollment expansion since 1999, the quality of human resources is still not high, because graduation is unemployed”, which means that many students graduated from university cannot find jobs. Hence, these factors will influence entrepreneurship to stimulate industrial upgrading. Based on these conclusions, we propose some countermeasures to make entrepreneurship accelerate industrial upgrading better. Firstly, we should fulfill the spirit of profile issued by our central government recently. Secondly, we should realize that there is spatial heterogeneity in the progress which entrepreneurship stimulates industrial upgrading. At last, we should concrete a governing system which includes strengthening innovation level, deepening opening extent, optimizing government support, promoting human resources and so on. Our research not only enriches the academic literature about the relationship between entrepreneurship and industrial upgrading, but also gives out some countermeasures on how to improve industrial upgrading from the perspective of entrepreneurship.