The recently issued Outline of Building a Quality-powered Nation proposes that China should improve industrial clusters’ leadership in quality, create sources of technology, quality and management innovation and support the development of top-notch industrial clusters. The question of how to improve industrial clusters’ leadership and thus strengthen industrial quality competitiveness has therefore attracted much attention.

An industrial cluster is an integrated, geographically concentrated group of enterprises, suppliers, financial institutions and other relevant organizations that are interconnected. Industrial clusters, through efficient cooperation and collaborative innovation of industrial and supply chains, can create scale effects, agglomeration effects and synergistic effects that are of great significance to the efficient allocation of production factors, the creation of industrial competitive advantages and the promotion of industrial diversified development. Cluster development is an inevitable trend of industrial growth, the only way for industrial transformation and upgrading, and the primary indicator of a country’s or a region’s economic development. During the high-quality development stage, the development of industrial clusters should place equal emphasis on “quantity” and “quality”. For industrial clusters to be more effective at driving regional economic development, it is essential to prioritize quality in their construction and pool resources from all sources.

Since the 18^th National Congress of the Communist Party of China, China has placed a high priority on the development of industrial clusters, particularly clusters of strategic emerging industries, and has incorporated the development of advanced manufacturing clusters and digital industrial clusters into the Outline of the 14^th Five-Year Plan and the Long-Range Objectives Through the Year 2035.In 2022, China created 45 state-level advanced manufacturing clusters and 100 characteristic industrial clusters of small- and medium-sized enterprises, with the value-added of high-tech manufacturing up 7.4% year on year, higher than the growth rate of the manufacturing sector. It should be noted, however, that China’s clusters of strategic emerging industries still fall short in their ability to innovate and develop in ways that meet the standards of high-quality development. These clusters also struggle with issues such as a lack of independent control over key technologies, unbalanced regional development and insufficient innovation efficiency. Due to the homogeneity and lack of synergy in many industrial clusters, it is challenging for various production factors such as technology, finance, talents and data to effectively act on the high-quality development of industrial clusters.

To address these issues, it’s essential to investigate differentiated paths for regional industrial clustering development according to local conditions and foster characteristic industrial clusters that are forward-thinking and innovative.

Improving the sci-tech innovation system and building an industrial cluster innovation ecosystem

Innovation is key to accelerating the improvement of industrial clusters’ leadership and a powerful engine that propels changes in quality. It’s important to leverage key common industrial technologies as a breakthrough and make arrangements by focusing on such fields as artificial intelligence, new energy, new materials and space network communication. It’s important to promote the integrated development of sci-tech and industrial cluster innovation, establish regional collaborative innovation communities and industrial innovation networks, and accelerate the concentration and sharing of innovation resources through sci-tech innovation service systems. It’s important to promote the deep integration of industrial and innovation chains, provide one-stop services for incubation of sci-tech projects and application of scientific and technological advances, and create “cradles” for expanding the clusters of strategic emerging industries.

Continuously optimizing the business environment and creating favorable conditions for industrial clusters

A good business environment is a key factor in attracting market entities to select their locations. The top priorities of optimizing the business environment are to protect the legitimate rights and interests of enterprises and entrepreneurs, improve a fair and impartial property right system, comprehensively, lawfully and equally protect the property rights of the private economy, and severely crack down on illegal and criminal acts that infringe upon intellectual property rights and trade secrets to provide legal safeguards for stimulating the innovation vitality of industrial clusters. To form a pattern of coordinated economic development between regions, it’s necessary to accelerate optimizing the business environment in the central and western regions and the northeastern region, concentrate efforts on improving industrial chain supporting facilities, keeping financing channels unimpeded and reducing taxes and fees, and ensure the smooth operation of the industrial and supply chains to encourage enterprises to relocate and support their expansion, and a solid foundation can be laid for accepting the transfer of industries from eastern coastal regions. By successfully aggregating mid-to-high-end factors, such as technology and data, toward advantageous market entities based on market demand, industrial clusters can grow more quickly and resources can be allocated more effectively.

Tapping into regional comparative advantages and cultivating characteristic industrial clusters

For the development model of industrial clusters, it’s critical to adapt policies to local conditions, focus on making the best use of the circumstances and consider localities’ characteristic natural resources, industrial foundations, cultural genes and location advantages of localities, in order to tap into and utilize characteristic resources and endow industrial clusters with characteristic advantages. It’s crucial to combine the input of entities with government guidance, provide policy support such as special development funds, construction land, technical services and tax and fee preferences for characteristic industrial clusters in various locations, address challenges faced by the characteristic industrial clusters of small- and medium-sized enterprises, accelerate the development of technologically advanced “little giant” enterprises within the clusters and fully mobilize the innovation vitality of all business entities. It’s important to explore and improve the regional brand co-building model participated in by enterprises, governments, industry alliances and industry associations, strengthen coordination in trademark identification and quality standards, and establish and improve regional brand quality standards and certification and traceability systems, thereby building characteristic regional brand images.

Source: Economic Daily, February 21, 2023