Producer Services Agglomeration And Manufacturing Transformation And Upgradation

After a high-speed development brought by the Reform and Opening-up policy which has been carrying out since1978, nowadays China faces critical challenges to change the growth model. During the transitional period, it is the most important task to realize whole transformation and upgradation of manufacturing industry, including improving the situation featuring low-end lock-in of factors imputs and products, as well as large scale but with poor manufacturing competitiveness.Actually, the real solution depends heavily on development of producer services industry. As well known, producer services can significantly increases circuitous process and knowledge content, as well as efficiency and competitiveness of manufacturing, thus realizing manufacturing transformation and upgradation.However, the above insights only covers " should develop " and " what to develop", and ignores "how to develop" particularly "where to develop", which is the key element for selecting reasonable path to push manufacturing transformation and upgradation by taking advantage of producer services.By company of geographical feature’s inclusion into frameworks of mainstream economics, people attach more and more importance to spatial agglomeration of industry. We must note that nowadays, national and regional growth of economy is driven strongly by industry agglomeration based on increasing returns and externalities, as well as economic circle, as a result of industry agglomeration. In other words, industry agglomeration is becoming an important strategic tool to increase national competitiveness over recent years.Over recent years, producer services in and out of our country have been agglomerating dramatically towards central cities within economic circles, central businiess districts within city and agglomeration zones of manufacturing.Doubtlessly, producer services agglomeration has become a significant trend of modern economic system in region and urban area, pushing both economic growth and structural transformation and upgradation of region and city.At the same time,producer services agglomeration provides spillover effectcs on manufacturing transformation and upgradation. Then, it is quite worthy to discuss how to promote producer services agglomeration in space which is very important for manufacturing transformation and upgradation.For theoretical evolution of industry agglomeration, we can recall so long.Yet until the beginning of1990s when New Economic Geography was founded, industrial spatial location could be included into mainstream paradigm of economic growth.From then on, research scope of industry agglomeration has been widening rapidly.Especially, with a trend that economic growth in developed countries has been clearly dominated by service economy, studies on producer services agglomeration becomes an important field within research on industry agglomeration.However, former studies on producer services agglomeration mostly focus on static discussion for spatial location feature of producer services, as well as its related effects over regional economy.Thus, seldom research covers the connection between producer services and other industries especially manufacturing, and discusses effects and countermeasures of producer services agglomeration with a view of matching manufacturing transformation and upgradation dynamically.Trying to make some additional contributions on related studies, this thesis explores " where to develop " theorectically and practically for producer services under the background and urgent need of manufacturing transformation and upgradation in our country.Based on theories for industry agglomeration, industrial structure and industrialization, plus realistic background of spatial adjustment of industries within economic circle or city, this thesis mainly focuses on relationship and influence between producer services agglomeration and manufacturing transformation and upgradation.To be exact, the thesis makes efforts to solve three major problems in order:why to agglomerate——how to agglomerate—how to promote agglomerate, and put forward countermeasures and proposals for forming reasonably agglomeration of producer services during the process of manufacturing transformation and upgradation in our country.Research framework and main contents for the thesis are as followed: First of all, it is a review of related theories and studies.Initially, theoretical developments of industry agglomeration and principles,latest practices of industrial transformation and upgradation are systematically introduced. Then, the author looks back upon major studying fields and developments regarding both manufacturing agglomeration and producer services agglomeration.Next,studies about interaction between producer services&its agglomeration and manufacturing transformation and upgradation are reviewed.Finally, the breaking point and several major problems to be resolved in this thesis are put forward.Secondly, it is the main body and core section of the thesis.In theoretical,positive and practical way, this part answers three important questions regarding pushing manufacturing transformation and upgradation in our country through producer services agglomeration, i.e."why to agglomerate?how to agglomerate?how to promote agglomerate?" Further, it can also be divided into three sub-sectionsThe first sub-section explores the internal mechanism and experience evidences about spillover effects and relationship from producer services agglomeration over manufacturing transformation and upgradation, answering " why to agglomerate ".Based on distinguishing different functions provided by producer services in manufacturing’s value chain, it discusses internal mechanism about spillover effects both from functional services agglomeration and" knowledge-intensive services agglomeration over manufacturing transformation and upgradation respectively. After that, by taking advantage of data of city level in our country, it has a positive analysis on internal mechanism of spillover effects including medium channel.Totally speaking, this part tries to provide solid basis of theory and positive evidences for later discussion about countermeasures.In perspective of classifying cities in our country,the second sub-section explores the key producer services industries to be agglomerated and its location characteristics in different kinds of cities in order to promote manufacturing transformation and upgradation, answering" how to agglomerate ".After analyzing economic basis and location endowment of different kinds of cities within a economic circle,it discusses objectives and contents for manufacturing transformation and upgradation in central city, early-development city of industrialization and late-development city of industrialization respectively, and then explores those matched patterns of producer services agglomeration accordingly.In the end,the author provides structural mechanisms and a general analytical framework with which different kinds of cities can develope agglomeration of producer services to promote manufacturing transformation and upgradation.The third sub-section explores supportive policies and proposals to push agglomeration of producer services during the process of China’s manufacturing transformation and upgradation, answering " how to promote agglomerate" Basically speaking, industry agglomeration inevitably needs strong support from policies and measures implemented by positive-government.According to those key influences for spillover effects of producer services agglomeration over manufacturing transformation and upgradation, and development paths of producer services agglomeration in different kinds of cities, it put forwards some counter proposals of supportive policy, which is external power for industry agglomeration.The last part of main contents in this thesis induces main conclusions and look forward some possible fields in future research.The main conclusions in the thesis are:(1) Theoretically speaking, producer services agglomeration has positive effects over manufacturing transformation and upgradation.For one thing,spatial agglomeration of functional services which serves basic tasks in manufacturing value chain, not only competition but also cooperation is established among services firms.As the result, an externality based on commercial convenience is offered to manufacturing by reducing trade cost of manufacturing,thus making manufacturing get one kind of cost surplus.On the other hand,knowledge-intensive services which serve supportive tasks in manufacturing value chain have not only been agglomerating near and around manufacturing clusters,but also toward central cities and its CBD within economic circle.Through accelerating production,accumulation and spatial spillover of knowledge, agglomeration of such kinds of services provides intellectual support for manufacturing.In addition,with restructuring and improvement of spatial structure for industries within economic circle’s city groups, agglomeration of knowledge-intensive services increases allocative efficiency of industrial resources around wider region,getting a collective economy. In other words,one kind of benefit surplus is realized.According to the above analysis,reduction of trade cost and increase of innovation benefit offer new powers for manufacturing transformation and upgradation. Resulting from manufacturing transformation and upgradation,higher specialization for producer services is further needed.Thus,increasing return effects from producer services agglomeration will be enhanced,realizing producer services upgradation and more significant concentration in space which establish solid base for a new round transformation and upgradation of manufacturing.In this sense,sound interaction between services and manufacturing can be achieved through cumulative causation mechanism.(2) The realization of spillover effects over manufacturing transformation and upgradation resulted from producer services agglomeration,not only highly relate to economic basis and location endowment of city.but also relate to breaking those constraints that prevent transition of such spillover effects across different rigions.In our country, functional services agglomeration promotes manufacturing transformation and upgradation completely through reducing trade cost,while knowledge-intensive services agglomeration still has no significant impacts on manufacturing transformation and upgradation.Based on a positive analysis with cross-sectional data of2009in city level,indeed producer services agglomeration provides beneficial spillover effects over manufacturing transformation and upgradation,but such effects are still confined to those central and relatively developed cities within an economic circle.According to that,the spillover effects over manufacturing transformation and upgradation brought by producer services agglomeration need key support of city’s economic basis and locational environment.In other words, agglomeration modes adopted during the process of manufacturing transformation and upgradation within different regions and cities must be distinguished.Those central and relatively developed cities are suitable for promoting producer services agglomeration comprehensively in order to realize manufacturing transformation and upgradation.While for those cities of medium and small size,it is suitable to agglomerate adaptable producer services in conformity with the exact goals for transformation and upgradation of dominant or major manufacturing industries.Besides, producer services agglomeration within regionally central cities does not show any significant spillover effects over manufacturing transformation and upgradation in neighbouring cities. Special features of services,unreasonably regional protectionism as well as lack of coordinating mechanism for industrial development between different regions or cities are all possible influences preventing the region-cross spillover impacts.Therefore,we have to make efforts to create environments and conditions to eliminate the above negative influences.Through further analysis about mediating effect by using data from central and relatively developed cities in Chinese major economic circles, the author discovers that the spillover effects over manufacturing transformation and upgradation resulted from producer services agglomeration are nearly interpreted by reduction effect brought by functional services agglomeration solely. On the other hand, agglomeration of knowledge-intensive services still offers no innovation-driving effects over manufacturing,which can be interpreted by some influences about industry scale of knowledge-intensive services,operation and management of agglomeration zones as well as basic institutions.Accordtingly,it is a fresh policy choice for promoting regional manufacturing transformation and upgradation to accelerate and improve knowledge-intensive services agglomeration reasonably in central and relatively developed cities within economic circle.(3) Different kinds of cities should develope appropriate agglomeration of producer services,which is beneficial to manufacturing transformation and upgradation,based on economic basis and location endowment themselves and inter-region cooperation of industries.Those cities located inside an economic circle are classified into three kinds,i.e. central city, early-developed city and late-developed city according to their industrialization features,basis for industrial structure and locational environment.Then,the author explores modes or strategies for producer services agglomeration during the process of manufacturing transformation and upgradation in different kinds of cities,and in addition,how to establish a reasonable structure for producer services agglomeration between different kinds of cities.At first,regionally central city is at the final stage of industrialization or service economy period,and suitable for agglomerating advanced factors for producer services.Thus, central city’s objective for manufacturing transformation and upgradation is to drive manufacturing value chain up to new level through innovation.Therefore,in order to push manufacturing transformation and upgradation in central city as well as within the scope of an economic circle,it is suitable to develop circling specialization agglomeration by taking CBD as the core, agglomerating knowledge-intensive services mainly and functional services properly.Secondly,city of early-developed industrialization is at middle or final stage of industrialization,and still not suitable to agglomerate advanced factors of producer services comprehensively due to its locational environment.So,its objective for manufacturing transformation and upgradation is to increase processing degree and value added of manufacturing,which means focusing on intra-industry upgradation.Therefore,it is suitable for city of early-developed industrialization to develop systematic agglomeration of producer services near or around specific major manufacturing clusters.At the same time,based on enhancing coorperation with central city,it should be active to accept knowledge spillover and intellectual support.Thirdly, city of late-developed industrialization is actually at middle stage of industrialization thanks to rapid development resulted from accepting industrial transfer from outside over the past few years.However,it is very important and urgent for such kind of city to realize development of a new pattern when manufacturing industries grow so fast.The key points for such new pattern lie in both increasing labor’s quality and improving the relationship between economy and environment,which would lead such kind of city to avoid duplicating traditional industrialization pattern simply and suffering long term loss.Then.such servies as career education and labor training,energy consuming mitigation and environment protection,as well as commerce and circulation should be selected as key industries to be developed and agglomerated in city of late-developed industrialization in order to found solid basis for manufacturing transformation.(4) In order to enjoy the beneficial spillover effects brought by producer services agglomeration over manufacturing transformation and upgradation,the supportive policies and measures ought to focus on increasing ability for knowledge production and spillover in developed regions,security ability of facility and institution for agglomeration of services factors in developing regions,and supportive ability from key basic institutions.Producer services agglomeration inevitably needs strong support from policies implemented by positive-government.For persuing better spillover effects from producer services agglomeration over manufacturing transformation and upgradation,the author puts forward the following policy proposals.Firstly,it is necessary for developed regions in our country to establish and improve agglomerating environment for innovative factors,and take full use of accomplishments from agglomeration of innovative factors,and coordinate spatial layout for agglomeration of innovative resources.Secondly,it is urgent for developing regions to strengthen construction of facilities of transportation and telecommunication network,decrease business cost of manufacturing, and establish institutional basis for regional transformation development.In a more essential way,key basic institutions must be improved,and market transaction environment featuring sound competition,fairness and positive effect of human capital should be founded,increasing supportive power from basic institutional environment.The major innovation in this thesis are:(1)Based on theories of industry agglomeration,industrial structure and industrialization,this thesis makes a big efforts to systematically explores the internal mechanisms of spillover effects brought by producer services agglomeration over manufacturing transformation and upgradation.In particular,it distinguishes different mechanisms of spillover from functional services agglomeration and knowledge-intensive services agglomeration,and then establish related theoretical models respectively.At the same time,by taking advantage of city level data in China,the thesis provides experience evidences for spillover and its mediating effects brought by producer services agglomeration over manufacturing transformation and upgradation.Through such evidences,it is helpful to prove and deepen those insights for internal reasons that producer services agglomeration can promote manufacturing transformation and upgradation.(2)The thesis classifies three kinds of cities under an integral studying framework innovatively according to economic basis and location endowment in different cities,and explores development countermeasures for producer services agglomeration in regionally central city,city of early-developed industrialization as well as city of late-developed industrialization during the process of their manufacturing transformation and upgradation.Thus,the author generalizes structural mechanisms and a general analytical framework for different kinds of cities to form reasonable agglomeration of producer services to promote manufacturing transformation and upgradation.In theoretical and practical sense,such structural mechanisms and a general analytical framework might stand.(3)The author puts forward some detailed countermeasures and proposals that is innovative concerning promotion of producer services agglomeration during the process of their manufacturing transformation and upgradation.Especially there are some exactly fresh industrial patterns and contents regarding producer services agglomeration.For example,noticing the movement of global green revolution, the thesis generalizes a few of beneficial enlightenment from the rejected materials exchange based on concept of recycling use of resource developed by Nanning(China-Asean) Commodity Exchange,and further points out that such a practice is actually a co-innovation of producer services agglomeration. Accordingly,the author suggests that such new exchange pattern should be developed positively in regionally central city and city of early-developed industrialization in order to push green transformation of regional manufacturing.For another example,it proposes to agglomerate specialized branches covering science&technology finance of commercial banks comprehensively in or around city’s agglomerating zones of science&technology manufacturing providing financial support which focuses on growth and future potentiality for those science&technology manufacturing enterprises that Urgently need capital.Besides.in order to innovate financial support for small and micro manufacturing enterprises,development of "virtual" agglomeration of producer services based on network digitization platform has been proposed.As far as the above innovations of agglomeration are concerned,some related supportive policies are also put forward.Of course,there are still some shortcomings in this thesis.For example,after mainly exploring internal mechanisms and spillover effects brought by producer services agglomeration over manufacturing transformation and upgradation,studies on the reversal influences should be enhanced.At the same time, cross-sectional analysis in this thesis may not reveal time tendencies concerning influences brought by producer services agglomeration over manufacturing transformation and upgradation.In addition,those application studies to promote producer services agglomeration during the process of manufacturing transformation and upgradation within different kinds of region or city in our country should be further developed,thus providing more detailed and constructive countermeasures.