Archives
Innovative cities in China: Lessons from Pudong New District, Zhangjiang High-tech Park and SMIC Village
Sean Chen
Department of Business and Accounting; Department of Asian Studies, Furman University, Greenville SC, United States of America
Kirk Karwan
Department of Business & Accounting, Furman University, Greenville SC, United States of America
Abstract
Although the pace of development in Chinese cities over the past decade has been unprecedented, future economic progress in China may be increasingly constrained by limitations in the social structures that serve to attract skilled labor.
To frame this contention, we present a model of economic development that describes what has happened in Shanghai and that we refer to as the Innovative City Development Life Cycle (CDLC) model. The model and issues are highlighted by a case study of the Pudong New District (PND) in Shanghai and our observations about one particular area of PND, the Zhanjiang High-Tech Park (ZHTP).
Although much of what has been seen in Shanghai and Pudong is consistent with recent theories of city innovation, central control of the CDLC leaves open the question of whether the Shanghai model is a sustainable one. In particular, the influence of multinational enterprises (MNEs) in recognizing and supporting social innovations is likely to be essential to future success in Shanghai.
The question is whether these innovations will be allowed to continue or if they will be controlled by central authorities in a way that will derail attempts to attract the necessary high-tech human capital.
Keywords
city development life cycle (CDLC), corporate social responsibility (CSR), innovative cities, industrial clusters, innovation in Chinese cities, pivotal talent pool, Pudong New District (PND), Shanghai city planning
Article Text
It is generally agreed and well documented in the literature that innovative activities within major industrial clusters serve as an important catalyst for city development, high employment, and economic stability (Audretsch 1998; Marceau & Manley 2001; Walcott 2002). Innovative activities have similarly served as the springboard for rapid urban development among Chinese cities over the past two decades (Gurria 2006; Wu & Barnes 2008). The Chinese experiment is interesting in that city and national planners borrowed development models from elsewhere but tried to greatly shorten the timeframe normally associated with the ‘city development life cycle'. This paper puts the current approach to regional development in China into a perspective that sheds light on the issues likely to impede efforts to ensure the viability of its cities.
The massive urbanization of China in recent years is unparalleled in human history. From 1978-2005, China's rural population dropped from 82 to 57 percent, as approximately 400 million new residents were added to the populations of urban centers (Pannell 2007). Economic growth and business formation have given rise to increasing wealth in various cities and the trend is likely to continue for some time. Their fast economic growth has made many Chinese cities serve as laboratories for economic and urban development experiments (Gurria 2006; Ng & Tang 2004), with Shanghai representing the pre-eminent test of spatial strategies to encourage global investment (Wei, Leung & Luo 2006; Wu 2003).
In classic urban growth thinking, cities depend heavily upon effective land planning and supporting infrastructure, economic policies, and government structures to ensure that firms invest and take risks. Since 1990 in Shanghai, these efforts have been concentrated in the Pudong New District (PND), an area of 522 km2 to the east of the Huangpu River. The original and continuing intent of PND is to enhance the attractiveness of the city as a focus of foreign direct investment and, eventually, as a global financial center.
This paper is the result of fieldwork over the past two years that has sought to examine economic development, industrial clustering, and innovation among Chinese cities. In July 2007, we conducted a preliminary field study (visits and interviews) of city planning ‘strategies' in Suzhou, Shanghai, Xian, and Beijing - cities that have adopted innovative ways to attract foreign direct investment (FDI) and have developed key industrial clusters. The 2007 study served as the precursor to a more focused study that took place in 2008, this time focused on Shanghai and PND, and especially on Zhangjiang High-Tech Park (ZHTP) and the several multinational enterprises (MNEs) whose innovative practices have inspired other Chinese cities and MNEs. Organizations and governmental entities in these cities have been generally reluctant to provide specific information beyond what is obtained during face-to-face meetings so our empirical claims are based upon personal observations, direct interviews, and information translated from Chinese web sources.
We have observed two major levels of innovation that characterize progress in Shanghai and PND. These are:
- The widely-observed ‘new' model of city development wherein a strong, centralized government ‘permits' a market economy where ideas flow and economic activities flourish, and
- The lesser-detailed efforts to accommodate social developments that complement and will be necessary to sustain this economic growth.
The principal challenges to city development in China (and in PND in particular) are somewhat predictable and readily observable from developments pushed by leading private sector organizations (the MNEs in PND). Although conflicts with strong central planning are inevitable, the ways in which these issues are confronted are likely to play a major role in the long-term economic success of Shanghai.
The rest of this paper is organized as follows: The next section provides a novel framework to understand the growth of Chinese cities. We refer to this as the Innovative City Development Life Cycle (CDLC) model of Chinese cities, where the phases of the model are readily linked to aspects of the literature on innovative cities. The model is then illustrated in the sections that follow where we detail the aggregate innovations that have taken place in Shanghai and the Pudong New District (PND) since 1990, as well as more detailed innovations implemented in Zhangjinag High-Tech Park (ZHTP) where cluster activity is most obvious. We then focus on a series of social innovations adopted by one specific MNE - the Semiconductor Manufacturing International Company (SMIC) - and that are serving as models for innovation in other development zones and cities. Finally we summarize the challenges confronting Shanghai, Pudong, and Chinese city development in general. ...continues...
References
Audretsch D (1998) Agglomeration and the location of innovative activity, Oxford Review of Economic Policy 14(2): 18-29.
Boudreau J and Ramstad P (2005) Talentship, talent segmentation, and sustainability: A new HR decision science paradigm for a new strategy definition, Human Resource Management 44(2): 129-136.
Branstetter L and Feenstra R (2002) Trade and foreign direct investment in China: A political economy approach, Journal of International Economics 58(2): 335-358.
Corporate Social Responsibility - Asia (2008) Pudong to be a model zone for CSR in China, posted July 10, 2008, accessed at http://www.csr-asia.com/ on August 18 2008.
Deller S, Tsai T, Marcouillier D and English DBA (2001) The role of amenities and quality of life in rural economic growth, American Journal of Agricultural Economics 83(2): 352-365.
Einhorn B and Tschang C (2008) Praying for success in Shanghai, Business Week, July 03.
Gurria A (2006) Building an innovative city: The macro perspective, 18th International Business Leaders Advisory Council (IBLAC) Annual Meeting: Promotion of an Innovative Environment - Shanghai's Future. Accessed at http://www.oecd.org/document/42/0,2340,en_2649_34487_37634538_1_1_1_1,00.html on September 15, 2008.
Huang C (2008) Christianity in a Chinese workplace? For some, The Christian Science Monitor, July 02.
Investment Shanghai (2005) Zhangjiang Hi-Tech Park. Accessed at http://www.investment.gov.cn/2005-10-27/1130425544591.html on August 18 2008.
Iritani E (2002) China's next challenge: Mastering the microchip: Seeking to enter the top tier of industrial powers, the country is on a crash program to compete in semiconductor work, The Los Angeles Times, October 22.
Jackson T, Illsley B, Curry J and Rapaport E (2008) Amenity migration and sustainable development in remote resource-based communities: Lessons from Northern British Columbia, International Journal of Society Systems Science 1(1): 26-48.
Marceau J and Manley K (2001) Australia's system of innovation, in Dow G and Parker R (eds) Business, Work, and Community, Melbourne, Australia: Oxford University Press, pp.81-100.
Marceau J and Turpin T (2007) Innovation agents and innovation tracks: CSIRO research scientists and their peers, Innovation: Management, Policy and Practice 9(2): 125-135.
Ng MK and Tang W (2004) The role of planning in the development of Shenzhen, China: Rhetoric and realities, Eurasian Geography and Economics 45(3): 190-211.
Pannell CW (2007) The China challenge: Observations on the outlook for the 21st Century, Eurasian Geography and Economics 48(1): 3-15.
Powell B (2008) Suburbia comes to China, Fortune 158(3): 121-128.
Simmie J (2001) Innovation and Agglomeration Theory, in Simmie J (ed) Innovative Cities, London: Spon Press, pp.11-52.
Smith C (2008) Monumentality in urban design: The case of China, Eurasian Geography and Economics 49(3): 263-279.
Song J (2008) Awakening: Evolution of China's science and technology policies, Technology in Society 30(3-4): 235-241.
Sun H (1999) Impact of FDI on the foreign trade of China, Journal of the Asia Pacific Economy 4(2): 317-339.
Walcott SM (2002) Analyzing an innovative environment: San Diego as a bioscience beachhead, Economic Development Quarterly 16(2): 99-114.
Wei Y, Leung C and Luo J (2006) Globalizing Shanghai: Foreign investment and urban restructuring, Habitat International 30(2): 231-244.
Wu F (2003) Globalisation, place promotion and urban development in Shanghai, Journal of Urban Affairs 25(1): 55-78.
Wu J and Barnes T (2008) Local planning and global implementation: Foreign investment and urban development of Pudong, Shanghai, Habitat International 32(3): 364-374.
eContent Home
