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Research on Selection of Local Strategic & Emerging Industries

Author: LiYanZe
Tutor: XiaoXingZhi
School: Dongbei University of Finance
Course: Industrial Organization
Keywords: industry selection strategic & emerging industries AHP Shift-Share
CLC: F276.44
Type: Master's thesis
Year: 2011
Downloads: 489
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Abstract

In October 2010, "The decision for speeding up to cultivate and develop strategic & emerging industries" was issued by the State Council, which defined energy conservation and environmental protection industry, next generation IT industry, biotechnology industry, high-end equipment manufacturing industry, new energy industry, new materials industry and new energy vehicle industry as "strategic & emerging industries" to support prominently. With industrial supporting policies have been advancing and detailing, strategic & emerging industries got broad concern among people from all walks. Local governments are following suit and investors are eager itching to entry. Strategic & emerging industries known as "the next four trillion" will impact the flow of various resources undoubtedly.The proposal of strategic & emerging industries has specific feature of policy-oriented and pressing urgency whether from the vertical view of the trend of three Technology Revolutions or from the horizontal perspective of the policy practice of many countries seeking new economic growth points in the post-crisis era. Combined with our country’s reality that economic development mode is extensive and single and the upgrading of industrial structure is tardy, the necessity of developing strategic & emerging industries is unambiguous.Theoretical innovation is always accompanied by practice progress. The concept of strategic & emerging industries is up-to date, whose theory research lags behind policy practices. It is very important to select strategic & emerging industries reasonably. "Correct selection lead to leapfrog development and fallacious selection cause opportunity missing." However, with lack of coordinated planning, local governments select their strategic & emerging industries with unpractical and sightless advancement or low-end development way, monotonously or government arranged. The effect of strategic & emerging industries in industrial structure adjustment and upgrade greatly reduce. With the interests "cake" of supporting policy for strategic & emerging industries, Local government should rational and objective enough to play characteristics and advantages from the feature of regional resource and industrial structure, formulate overall planning in line with local realities and carry forward it step by step.There are no perfect conclusion among academic circles about the content and feature of strategic & emerging industries. This article will define these aspects and distinguish them from Leading Industry and High-tech Industry etc. in the first place, holding that strategic & emerging industries must have two indispensable characteristics simultaneously "strategic" that meaning have potential to be Leading Industry and relates to the national industrial security and "emerging" meaning have risk of uncertainty in market demand and technology path. Just because of Leading Industry’s certain features which strategic & emerging industries also have, the article will based on the theory of selecting Leading Industry and construct index system to analyze and evaluate local strategic & emerging industries selecting, considering the feature of innovation-driven and conspicuous comparative advantage. For strategic & emerging industries and high-tech industries overlapped to certain extent, and for data limitations, this article will substitute high-tech industries for strategic & emerging industries to empirical analyze aimed at just provide a method.The object of this paper for empirical analysis is strategic & emerging industries (high-tech industries) of Liaoning province. As China’s main old industrial base, Liaoning have imperative mission to cultivate strategic & emerging industries for upgrade of industrial structure level. On the analysis method, the article use Shift-Share Method and AHP method to enrich this paper and compare conclusion. Shift-Share Method can divide representative index into three components:share component reflected average of our country, structural shift component reflected rationality of industrial structure and competitiveness shift component reflected regional competitiveness. By comparing each component of different industries, we can judge local superior industries in general. This method is so rough that lack the reasons of regional competitiveness though it can reflect the background of industrial structural adjustment of strategic & emerging industries. For careful and thorough analysis, AHP method is used in this paper to determine weights for indicators mentioned above and sort in general combined with the actual data of Liaoning. The conclusions of the two methods are almost similar except some differences. Among the five Hi-tech industries, Liaoning province has obvious advantages in high-end equipment manufacturing industry (aerospace industry) and biotechnology industry (pharmaceutical industry), while is disadvantaged in electronic equipment industry and computer and office equipment compared with other advanced provinces.Local governments should select its own strategic & emerging industries guided by technological innovation, based on superior features, safeguarded by cooperative advance, aimed at structure upgrading. On the basis of former discuss, the article try to put forward some policy suggestions linked with actual situation, making an integral structure. Of course, there are imperfect points which deserve further discussion and study, for instance, making empirical analysis using the data of Hi-tech industries instead of strategic & emerging industries may have much discrepancy. But the indicators and analysis methods will arouse and inspire further study in this field.

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