Industrial Clustering and Technological Innovation in China: New Evidence from the ICT Industry in Shenzhen

Abstract

The relationship between industrial clustering and technological innovation has been a subject of intense enquiry and heated debate. We examine the actual pattern of industrial clustering and technological innovation in China, focusing on the information and communication technology (ICT) industry. With our systematic analysis of the data gathered at the national level we found no significant relationship between spatial agglomeration and economic performance. Our questionnaire survey and personal interviews conducted in Shenzhen—China's leading special economic zone—revealed a peculiar pattern consistent with that at the national level. Although there existed frequent and intensive production linkages among firms in the Shenzhen ICT industrial cluster, the innovative performance of these firms has been rather poor. Most of the ICT manufacturing firms obtained their core technology through internal research and development (R & D) activities rather than through technology transfer or knowledge spillover. There is a lack of interest among firms to seek cooperation and communication based on knowledge, technology, or R & D activities with other firms in the same cluster. The peculiar pattern of clustering and innovation in China suggests that technological innovation may have a divergent regional trajectory more sophisticated than that which has been described in the existing theory of industrial clusters. The study closes with a plea to go beyond a relational turn in economic geography and to take more seriously the roles played by actors and agents within different bounded and grounded institutional and regional contexts.