Anatomy of cluster development in China: the case of Health Biotech Clusters

Abstract

des Rechteinhabers aufgrund einer (DFG geförderten) Allianz-bzw. Nationallizenz frei zugänglich. / This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively. EmpfohleneDesign/methodology/approach -The paper employs a demographic approach that is inspired by the 2006 work of Romanelli and Feldman on cluster development in the USA. It categorizes China's clusters based on differences in the degree of policy support and the nature of the science base. Then, it draws a sample of 75 of China's most visible firms and analyses them in terms of entrepreneurial origin, their location and, if applicable, the location of their subsidiaries. By matching types of firms with types of clusters, the paper highlights some characteristics of China's regional development. Findings -Studies on China's high-tech agglomerations unanimously complain about a lack of "creative buzz" compared to the vibrant clusters of for example, the Bay Area in the USA. The analysis indicates that the lack of a creative culture is associated with the anatomy of cluster development. China's clusters grow to a significant extent by attracting enterprise subsidiaries to their sites. The authors argue that these particular cluster anatomies are founded on China's capital market. As the capital market is not prepared to provide pre-revenue firms with sufficient funds, firms have to earn revenue quickly in order to ensure their viability. Therefore, they concentrate on building up manufacturing capacity and exploiting given technologies. The main point is that local governments as major providers of financial support are instrumental in this process. The establishment of manufacturing subsidiaries in various locations rests on the rationale of collecting funds. This leads to the conclusion that national capital markets either reinforce or inhibit clustering depending on how much it allows the mobility of financial capital. Local government funds do not travel far. This has an impact on the firms' localization decisions and their business strategies, which, in turn, affects the "culture" inside the clusters.Research limitations/implications -This argument is based on a limited number of interviews conducted by the authors or other researchers. In order to corroborate the link between the capital market and local development trajectories, more evidence needs to be collected via interview surveys and other means to extract financial information. Originality/value -Unlike other research on Chinese clusters, this paper offers an interregional perspective based on a demographic approach. The argument is original in linking regional cluster dynamics with the national institutional set-up.

Identifying configurations of multiple co‐located clusters by analyzing within‐ and between‐cluster linkages

“…While some variation existed between the three biomedical industry parks, this pattern was again quite consistent across the three parks. In the case of a fully‐fledged industrial cluster, we could expect that local training and education facilities exist and that firms develop local ties to these facilities (e.g., Conlé & Taube, ; Fundeanu & Badele, ; Powell and Owen‐Smith, ). In Daxing Park, for instance, technical education schools, such as the Beijing Daxing First and Second Vocational Schools, the Beijing Daxing District Vocational and Technical School, the College of Pharmacy of the Open University of China and the Experimental Training Center of Traditional Chinese Medicine and Biotechnology, provide training opportunities not only for local workers, but also for those from the other industry parks.…”

“…As shown in Table , a consistently high share of firms (28% on average) were engaged in within‐park collaborations. This highly significant share indicates that the three biomedical industry parks indeed had a cluster structure that enabled manifold internal linkages in production (Bathelt et al, ; Conlé & Taube, ; Malmberg & Maskell, ). About 70% of the survey firms engaged in joint production and service activities and 35% in joined R&D. Aside from within‐park linkages, a highly significant share of 14% of the firms also benefited from between‐park linkages with other biomedical firms.…”

“…While some variation existed between the three biomedical industry parks, this pattern was again quite consistent across the three parks. In the case of a fully-fledged industrial cluster, we could expect that local training and education facilities exist and that firms develop local ties to these facilities (e.g., Conlé & Taube, 2012;Fundeanu & Badele, 2014;Powell and Owen-Smith, 1998 Accordingly, about 18% of the survey firms used training opportunities within their biomedical industry park and 12% mentioned that they also used education and training facilities in the other parks for that purpose (Table 4). Both, within-park and between-park linkages were highly significant at the 1% level.…”

“…Since a deepening division of labor always goes along with a higher risk of unintended knowledge leakages (a well-known concern in the Chinese context), 30% of the firms emphasized that this required a trust relationship with their partner firms. This meant that trust had to be built in prior collaborations or regular meetings, for instance during government events, over an extended time period (Conlé & Taube, 2012;Feldman & Florida, 1994). In terms of the forms of linkages with KIBS, 70% of the biomedical firms pointed out that they engaged in joint consulting activities and about 40% needed inputs from KIBS in joint R&D projects.…”

“…Much research has aimed to understand why such industrial agglomerations or clusters exist, and comes to the conclusion that local collaboration, learning, and knowledge flows are key. While we know that successful clusters crucially depend on extra-cluster connections to other markets and technology pools, few studies have explicitly investigated interrelationships among industrial clusters, regardless of whether these are located in different cities (e.g., Asheim, 2003;Conlé & Taube, 2012;Lu & Cao, 2012;Lu, Ruan, & Reve, 2016;Lu, Zhang, & Reve, 2013) or different countries (e.g., Engel & del-Palacio, 2011;Hsu, 2005;Hsu & Saxenian, 2000;Meyer-Stamer, Maggi, & Seibel, 2004;Oliver, Garrigós, & Porta, 2008;Schüßler, Decker, & Lerch, 2013;Scott, 1994;Scott & Pope, 2007). Related studies have started a discussion of the interrelationships between industrial clusters, suggesting that linkages external to clusters, but internal to the value chain, are important to cluster development and competitiveness (Albors-Garrigos & Hervás- Oliver, 2012;Nadvi & Halder, 2005) and lead to the emergence of global technology networks (Bathelt & Li, 2014;Li, 2014).…”