Specialized Labor, Economic Growth And Industrial Upgrading

Over the past 30 years of reform and opening up, China went through a course of rapid industrialization, sustained long-term fast economic growth, and achieved outstanding results, while the cost incurred was heavy. Therefore, it is now a first priority for China to realize the transformation of economic growth model and promote the overall industrial upgrading as soon as possible.Shenzhen's reform experience seems to have provided a practical answer to this question. Via proactive innovation, specialization, industrial agglomeration, cultivation and upgrading of specialized labor, promotion of high/new-tech industries, Shenzhen succeeded in realizing industrial upgrading, transforming economic growth model, and sustaining long-term fast economic growth. Such upgrading and growth is neither mere imitation nor simple application of the theory of Flying Geese Pattern. Rather, Shenzhen relied on innovation and specialization to realize the transition from static comparative advantages based on simple labor to dynamic comparative advantages based on specialized labor. Now, Shenzhen boasts of world-leading high/new-tech enterprises such as Huawei and ZTE, as well as traditionally strong industries such as garment and jewelry whose products are being sold.globally. Along with the industrial upgrading, Shenzhen has fostered a strong financial services industry, an innovative modern logistics industry, an outward-looking cultural industry, as well as a world-leading living environment.This paper carried out further inference in view of realities through review of the growth theories, based on the latest expansion of growth theories, i.e. the growth theory of organic specialized labor, and built an upgrading model of specialized labor and an industrial structure analysis model based on specialized labor. Taking the abovementioned as analysis framework, we chose Shenzhen's electronic telecommunication equipment manufacturing industry and gene industry as samples of high/new-tech industries, and chose Shenzhen's gold and jewelry industries and garment industry as samples of traditionally strong industries. We conducted systematic case research on the Shenzhen model, and obtained some copiable universal conclusions. We discovered a practicable path for developing countries to rely on comparative advantages created by specialized labor to achieve exceptional growth, thus answered the three core questions as to China's economic growth, transformation, and industrial upgrading.Our major conclusions are as follows:1) In the backdrop of IT revolution, knowledge economy and global specialization, the core driver of economic growth is the creative and innovative specialized labor created by free specialization and labor division.2) The key to narrowing the economic and technical gaps between developing countries and developed ones is increasing the types and amounts of specialized labor via promotion of industrial agglomeration and labor division. thereby promoting the upgrading of specialized labor.3) The key for developing countries to accelerate long-term economic growth and get closer to or even outpace developed countries is to reply on dynamic comparative advantages arising from specialized labor to promote the application of new technologies, the development of new industries, and the creation of new industries.4) China can rely on the dynamic comparative advantages arising from specialized labor to develop high/new-tech industries and transform the economic growth model. China can rely on the upgrading of specialized labor to realize industrial upgrading. China can rely on the specialized labor-based innovation to promote the upgrading of high/new-tech industries, to consolidate and upgrade the traditionally strong industries, to foster and strengthen the emerging strategic industries, and to build a modern industry system with international competitiveness, thereby promoting the long-term rapid growth of China's economy.