Study On Upgrading Of Manufacturing Clusters From The View Of Global Value Chain

One of the many paradoxes of the processes of 'globalization'is the continued significance of 'localization', in the sense of increasing concerns about the upgrading of local industrial clusters on global value chains. Industrial clusters are one of the significant ways to promote local industrial competence. Study on local industrial clusters focuses on inter-firm linkages and interaction within an identical industry. Vis-à-vis, the approach of global value chains and the governance poses emphasis on cross-border linkages and interdependence among different industries located in discrete places, which provides a novel view prospect for the upgrading of local industrial clusters in developing countries. There are four patterns of upgrading for local industries in terms of innovation points: process upgrading, product upgrading, functional upgrading, and inter-sectional upgrading. The typology of value chain governance has been analytically identified as four basic types: arm's length market relation, network, quasi-hierarchy, and hierarchy. With a combination of the two theoretical approaches, the way of how developing countries insert into global value chains, and how insertion into global value chains affects the upgrading prospects of local industries, and the way to coordinate the value chain governance in order to upgrade local industrial clusters, were discussed in this paper. Intension of local industrial cluster upgrading was proposed in the paper, which included the upgrading of technical competence, innovation competence, external linkages, social capital, and regional innovation system. In terms of the industrial characteristics, four different patterns of upgrading paths and strategies were presented, including traditional manufacturing, COPS, material-dependent industries, and special suppliers group. As one of the most important industrial sections, Chinese manufacturing industries confront a lot of problems. With the empirical study of Jinjiang footwear cluster, and the enterprises cases of ANTA and AOKANG, two representative paths of upgrading Chinese manufacturing clusters were summarized. One way is to upgrade from OEM to OBM, the other is to cooperate with global buyers to attain innovation and upgrading. The five intension of local industrial cluster upgrading were corroborated in the two paths. What have been stated in this dissertation follows the conclusion that, upgrading of local manufacturing clusters on global value chains matters not only internal linkages between local firms, but also the external linkages within value chain governance structure in which local clusters insert. The patterns of upgrading will make a strong impact on the developing strategies and policies initiatives of Chinese manufacturing clusters.