China National Science & Technology Industrial Parks (STIPs)

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China National Science & Technology Industrial China National Science & Technology Industrial Parks (STIPs)Parks (STIPs)

Peng HaoshuPeng Haoshu

Chinese Academy of Sciences, P.R. ChinaChinese Academy of Sciences, P.R. China

16 March 200916 March 2009

Contents

Overview of Background1

Current Situation2

3

Strategies for Future Development4

Policies and Administration

Background

The importance of STIPs in China:1. Incubators of S&T companies

2. Important platforms for technology innovation

3. Congregation of innovation clusters

4. Representative areas of intensive economic growth models

5. Important engines of regional economic growth

6. Important carrier to improve international competency.

Current Status of Major Regions in China

Western ：Area: 71.6% ；Population: 370 million(28.7%)Main Features ：（ 1 ） unfavorable natural conditions ， most poverty population ；（ 2 ） highest rural population proportion

（ 3 ） more than 50 minorities (more than 80% of total minority population ；（ 4 ） few and far between ， inconvenient economic connections

（ 5 ） upriver of Yongtse, Yellow River, ... ， eco-safety of the whole country ；（ 6 ） rich in energy and mineral resources

North-east:

Area: 8.2% ；Population: 110 million (8.3%)

Main Features:（ 1 ） rich land resources and favorable for agricultural production（ 2 ） lowest rural population

proportion （ 3 ） old industrial bases facing challenges of exhausting resources （ 4 ） good industrial conditions, reserve of talents, well developed infrastructure（ 5 ） facing constructive problems

Central:

Area: 10.7% ；Population: 360 million (28.2%)

Main Features:（ 1 ） Fertile soil ， major agricultural production and output bases ；（ 2 ） traditional culture stressing agriculture while restraining industry and despising commerce ；（ 3 ） industrial bases of various scales formed in some areas（ 4 ） impacted area, convenient economic connections & easier market support for industrial growth（ 5 ） higher proportion of agricultural population than national average but lower than western areas（ 6 ） absolute poverty basically eliminated and therefore development has become the priority 。

Gov. Initiative Foreign Investment Made in China Business Independent Innovation Created in China

National Strategies Since 80’sEast others

Population ●Arable land ●

Natural Resources

●

Economy ●S&T Strength ● ●

78’ Costal Cities

91’ STIPs

99’ Western Development

03’ North-east

04’ Central Areas

Overview

Background ： The Changing China

Background ： The Changing China

Made in China ： No. 1 Manufacturer and Exporter in most industries

•Toys 70%

•Shoes 50%•Color TV 45%•Air Conditioner 30%•Textile 24%

Created

in China

Independent Innovation

Adjustment of Industrial Construction

Moving up to higher end in the Value Chains

Policy Talents

Capital Market

Tech

Trade Volume/GDP: 60%(03’); 64%(05’)

Excessive investment into processing trade (OEM), resulting in, labor, land and resources intensive lower-end products

Gov. Initiative Foreign Investment Made in China Business Independent Innovation Created in China

Background

1. Why STIPs Breakthrough difficulties of lower-end manufacturing clusters;

Limited areas selected to concentrate policies and resources to congregate higher-end value chains to realize the “breakthrough” ；

To promote the transformation of technology results and encourage indigenous innovation and entrepreneurship

To promote the commercialization of new & high-tech achievements, the industrialization of new & high-tech products and the internationalization of new & high-tech industries (China Torch Program)

2. The goal of STIPs ： Innovation clusters

STIPs-Milestones

85’ 1st STIP in Shenzhen

88’ 1st National STIP in Zhongguncun

91’ 26 National STIPs approved

92’ 25 National STIPs approved

97’ The 53rd National STIP (agricultural, Yangling, Shanxi)

07’ The 54th National STIP (Ningbo)

Deng Xiaoping: Develop the Hi-technology, and bring it into IndustryDeng Xiaoping: Develop the Hi-technology, and bring it into Industry

Jiang Zemin: To construct the STIPs is the most important pioneering Jiang Zemin: To construct the STIPs is the most important pioneering work in the 20th century. work in the 20th century.

Locations

STIPs-Favourable locationsSTIPs-Favourable locations ：：• 29 in central cities with intensive

intellectual resources and sound

industrial bases

• 13 in coastal cities with better

conditions of opening-up to

outside world

• 12 in the cities with intensive

military industries and traditional

industrial bases.

Current Situation

Administration Scheme

Innovation clusterThe reason for existence and goal for development of STIPs in China

An innovation cluster is a pool of innovation resources.An innovation cluster is a pool of innovation resources. The highly efficient operation mechanism resulted from long-term competition and cooperation as well as the ever-improving innovation circumstance makes it possible for an innovation cluster to continuously attract innovation resources including talents and capital, etc.

An innovation clusters is a network within which various innovation players are linked An innovation clusters is a network within which various innovation players are linked via value chain or industrial chain.via value chain or industrial chain. Competition and cooperation makes the players more and more synchronized and a symbiotic ecosystem is gradually established.

An innovation cluster is an interest community.An innovation cluster is an interest community. The enterprises in the cluster compete with each other to obtain the maximum benefit within the cluster and this “small competition” is usually temporary while the unified competition with external industrial counterparts is to dominate the higher-end of the global value chain and such competition is for survival and permanent.

An innovation cluster is the headstream of innovation.An innovation cluster is the headstream of innovation. The players in the cluster share the new technology and products brought out by the revolving process of combination, communication, cooperation and competition.

An innovation cluster is an innovation-oriented opening society.An innovation cluster is an innovation-oriented opening society. The innovation culture is gradually rooted in the cluster by the convergence of innovative and entrepreneurial spirits of the players. As a result of the moving in and moving out of the different players driven by this culture, the cluster becomes a vigorous innovation headstream.

The Development Status of Innovation Clusters in STIPs

1. Apparent conglomeration of higher-end industries About 150 industrial cluster among 1300 cluster across the

country, mainly in new & high-tech sectors STIPs have attracted quite a number higher-end clusters in

the sectors of hi-tech service, software, IC, new energy, bio-pharmaceutical, optical-telecom, etc.

Typical clusters: • Zhongguancun(Beijing): Creative & software industry• Donghu(Wuhan): optoelectronics• Zhangjiang(Shanghai): IC and pharmaceutical• Tianjin: biotech and new energy• Shenzhen: telecommunication• Zhengzhou: Super-hard materials• …


Main Features Industrial scale and brand name being formed,

gradually penetrating into international market Comparatively complete industrial value chain Innovation system basically shaped up Moving up to higher end of value chain New industries emerge continuously


2. The technology innovation system is forming up Human resources: The STIPs have attracted

• 560,000 technological people • 52,103 master graduates, • 9,358 PHDs• 5,615 returned overseas scholars• 1, 330,000 college graduates (accounting for 1/3 of 4 million

employees in all national STIPs) More than 250 Technology Business incubators and a

batch of postdoctoral working station have been sep up R&D Strength

• R&D investment: 8 times higher than national average• R&D investment per capita: 6 times higher than national average


2. The technology innovation system is forming up (Cont.)– Closer cooperation between university, research

institutions and STIPs– Local Innofund and VC Fund of funds are being set

up in STIPs– Networking such as industrial technology alliances

are coming forth – International cooperation prevalent


3. Challenges: Endogenetic mechanism and entrepreneurial

environment still to be perfected; innovation capacity of enterprises still insufficient due to lack of core or key technologies

Business relevancy not high, more focus on “conglomeration” than “clusters”, which in most cases are still in primary phases

Industrial features and advantages not prominent, lower end of the value chain

Unbalanced development among regions and areas with

significant differences

Policies

Latest Policies Income tax exemption for first 2 years since profit-making and a reduced tax

rate at 15% for the 3rd year on Exemptions of operation, income, property and land use taxes within a

certain period for ratified Technology Business Incubators and National University Science Parks

Pilot OTC (over the counter) system in Zhongguancun for unlisted high-tech companies

Policies

New Historical Mission: A quaternity positioning

Strategies for future development

“ Strengthening the capacity of independent innovation and building an innovation-based country”- A national target proposed by the central government at the beginning of 2006. A technological innovation system is to be established

within which• The enterprises will be the main players

• The market-orientation will be kept and

• The cooperation between industry, educational and research side

will be strengthened

Strategies for future development

“ The Compendium of the National Long Term Science and Technology Development Plan (2006-2020)” and its supplementary policies will facilitate the establishment of the technological innovation system by improving the overall conditions: R&D Investment Tax Incentives Financial Support Government Purchase Re-innovation based on absorbing new technology from

abroad and independent digestion Creation and Protection of Intellectual Properties

Policy Improvement & Network Building

1. To improve the policy environment of STIPs Preferential fiscal and financial policies Intellectual Property Protection Government Purchase

2. To construct the service networks (which are the key part to promote the development of innovation clusters) To attract intermediary service providers into the parks To construct the information service network To set up various business associations and clubs

Promoting Interaction & Partnership

3. To promote the cluster-model innovation activities

The soul of the innovation clusters is the clustering innovation among the enterprises and so we have to Support the leading business and nurture SMEs to bring

into full play of their respective innovation advantages. Increase the investment into guiding fund to attract more

social capital to sustain the long term and continual innovation Attract and train the high-end professionals to ensure the non-

exhausted innovation headspring Encourage the inner and outer cooperation between the

businesses, universities and research institutions to integrate

them into an interest community Set up various industrial technology alliances industry to

break up the common technology barriers

Innovation Clusters

Ind. Edu. & Res.

Industrial Alliances

Policy People

Capital Market

Technology

Strengthening International Cooperation

4. To establish service platforms for international cooperation Innovation clusters are an open clusters and the

international capital, technology, human resources and information are all the propelling power for their development and growth. Therefore, all the STIPs in China are establishing various service platforms to make full use of the international innovation resources including capital, technology, information and talented people.

ZhongGuancun park

Zhongguancun Park

The First National STIP in ChinaZhongguancun Science Park

the embryonic period: 1980 － 1988 the development period: 1988-1999 the growth period: 1999 to now

Leadership: more than 10,000 enterprises in the park and the total economic volume of the park is leading the 54 state-level high-tech

areas in the whole country RIS: Haidian Park has maintained its leading position in the regional

economy and the comparison among the multiple parks in

ZhongGuancun Science Park.

“Ten parks”: 232 square kilometers

No. of High-tech Companies at ZGC Park

02000400060008000

10000120001400016000180002000022000

Growth of Total Income

0100020003000400050006000700080009000

10000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

亿元

10

20

30

40

50

60

70

80

%

总收入增长速度

Hundred million yuan

Total income

Growth rate

Income structure

44.7% Sino-foreign joint

ventures, Sino-foreign

cooperative enterprises and

wholly foreign-owned

enterprises

7.6% private enterprises

32.6% limited liability

company

0.1%

Other

3.9%

State-owned

0.1%

Collectively-owned10.9% joint stock limited

company

国有集体股份有限有限责任私营三资其他State-ownedCollectively-

ownedJoint stock limited

company Limited liability

company

Private enterprises

Sino-foreign joint ventures, Sino-

foreign cooperative enterprises and wholly foreign-

owned enterprises

Other

Industrial Structure

electronics and information manufacturing industry

optical, mechanical and electronic integration

New material, new energy and environment science

new medicine bioengineering

others

Structure of Revenue

electronics and information manufacturing industry

optical, mechanical and electronic integration

new medicine bioengineering

New material, new energy and environment science

others

Total revenue and Gross industrial output value

100million

Taxes and Foreign exchange-earning

Companies with operating income greater than 100million

Success factors

Talents CirculationS&T Network with Univs and InstitutesCapital: Foreign investmentR&D expense Preferential policiesInternational Cooperation

China National Science & Technology Industrial Parks (STIPs)

Documents

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