Literature Review of Industrial Cluster Theory

1. Adam Smith and Marx's theory of division of labor and cooperation

Adam Smith witnessed the efficiency of division of labor and specialized production in the early stage of industrialization. He believes that the division of labor is the source of national wealth enhancement and the core phenomenon of economic life. In The Wealth of Nations, he analyzed that the greatest improvement of labor productivity and greater proficiency, skills and judgment in labor use seem to be the result of division of labor. Smith not only discussed in general that adopting the mode of division of labor production can improve labor productivity, but also deeply analyzed the reasons for improving the efficiency of division of labor. He divided the division of labor into three types: one is the division of labor within the enterprise; The second is the division of labor among enterprises, that is, the specialization of labor and production among enterprises; The third is industrial or social division of labor. The second form of division of labor is the theoretical basis for the formation of enterprise clusters. It is precisely because of this division of labor that enterprise clusters have the efficiency advantage that both individual enterprises and the whole market can have. Excessive division of labor and market division of labor have a series of disadvantages. Enterprise cluster ensures the efficiency of division of labor and specialization, at the same time, it can further deepen the division of labor and specialization, and then promote the development of enterprise cluster.

Marx believes that the choice of production organization mode must meet the purpose of reducing individual value, otherwise, the goal of capital appreciation will be difficult to achieve. Therefore, when it is proved that the new mode of production organization-division of labor and cooperation has higher productivity, using division of labor to reduce costs has become a common behavior of capitalists. Marx believed that enterprise production based on cooperation can produce greater efficiency than decentralized production. The reasons for the resultant force effect are as follows: first, under the same output, cooperative collective production saves space than decentralized production; Second, when the delivery date is approaching or other emergencies occur, centralized production can complete a large production volume; Third, in the environment of collective production, individual's ability can be expressed through the difference of labor efficiency, and strive for competition first to improve productivity; Fourthly, accommodating different production links in an enterprise is beneficial to management and control, and can maintain the continuity and proportion of production; Fifth, cooperative collective production has improved the utilization rate of means of production. In short, the pursuit of high efficiency and low cost has become the internal driving force for the formation of industrial clusters.

2. Marshall's theory of economies of scale

AlfredMarshall put forward two important concepts in Principles of Economics published by 1890: "internal economies of scale" and "external economies of scale". Marshall's concept of external scale economy refers to the reduction of the overall cost of production enterprises in a specific region caused by the agglomeration and development of an industry. Marshall found the close relationship between external economies of scale and enterprise clusters by investigating the phenomenon of enterprise clusters in some traditional industries in Britain. He believed that enterprise clusters were formed based on external economies of scale. Marshall thinks that external economies of scale and internal economies of scale have the same efficiency of industrial organization, so they are very important. "This kind of economy is often available because many small enterprises with similar nature are concentrated in a specific place, which is often called the distribution of industrial zones." Marshall called the specific area where specialized industries gather "industrial zone". Marshall elaborated on the causes of economies of scale. He believes that the main benefits of mass production are technical economy, mechanical economy and raw material economy. Because large factories can use high-efficiency machinery, thus greatly improving production efficiency, and the benefits obtained from the economy of machinery are beyond the reach of small factories. Large enterprises can get relatively low prices by purchasing in large quantities, and large-scale transportation ensures the full use of transportation tools, so it has low transportation costs. The gathering of enterprises in "industrial zone" can reduce the cost of labor search and auxiliary production, and the spillover of information can make the production efficiency of clustered enterprises higher than that of individual dispersed enterprises, especially through the relationship between people, which promotes the spillover of knowledge in this area. Collaborative innovation environment also promotes the development of enterprise clusters.

3. Industrial location theory and new industrial location theory.

German economist Alfred? In his book "Industrial Location Theory" (1909), AlfredWebber discussed the reasons for the formation of industrial clusters from the perspective of cost saving brought by industrial agglomeration. He believes that the location with the lowest cost is the best location, and aggregation can make enterprises save costs. The increase of enterprise scale can bring benefits or save costs to the factory, and several enterprise clusters in one place can also bring more benefits or save more costs to each enterprise. The specialization of technical equipment development and the reduction of labor-related costs have also promoted enterprise agglomeration. He regards the benefits brought by agglomeration as cost saving and income increase, and it is cost saving that drives enterprises to produce agglomeration. The development of specialized market can increase the scale of bulk purchase and sale, make enterprises enjoy the convenience of purchasing raw materials and realize product transactions smoothly, thus reducing the cost of enterprises and improving efficiency. Enterprise agglomeration is conducive to the construction and enjoyment of infrastructure such as roads, gas and tap water, thus reducing the recurrent expenditure cost and promoting enterprise agglomeration.

The new industrial zone theory studies the formation motivation of enterprise clusters from the interactive relationship between enterprises and their social environment. Based on the research on the practice of high-tech industrial complexes such as Silicon Valley in the United States, Baden-Wü rttemberg in Germany and emilia-romagna in Italy, the new industrial zone theory came into being in the 1980s. According to this theory, the most important factor that determines the development of high-tech industry in a country, a region or even an enterprise is not the quantity and quality of material capital, but the social and environmental factors related to the development of human capital potential, such as economic organization structure and cultural tradition. As Saxony Ning, an American economist who has long studied the characteristics of Silicon Valley, said, "The real secret of Silicon Valley's success lies in its good cultural and ecological environment conducive to innovation and talent growth." Since then, the European School has emerged, which is a GRMI (Regional Innovation Environment Research Group) composed of regional scientists from France, Italy and Switzerland. Their main concept is cultural environment. This concept links the phenomenon of industrial spatial agglomeration with innovation activities, which makes this theoretical school influential. According to the theory of innovation environment, industrial localization includes improving the technology and specialization level of the whole community, providing abundant high-quality labor, increasing auxiliary trade and specialized services, meeting the needs of many companies and creating conditions for adopting more specialized institutions. Enterprise agglomeration enables everyone to enjoy the benefits of large-scale production, technology and organizational innovation that a single enterprise cannot achieve. The research of innovation environment emphasizes the collective efficiency of innovation subjects in the industrial field, the synergy of innovation behavior and social embeddedness. Capello (1999). Simmie( 1997) and others found that in innovative areas, innovative manufacturers gather in a specific area, but they usually operate independently of each other, and manufacturers in the gathering area make use of the good environmental characteristics of the area.

4. Growth pole theory

The growth pole theory is also closely related to the formation of industrial clusters. The concept and theory of growth pole were developed by French economist Francois? It was put forward by F.Perrour in the 1950s. Peru introduced the concepts of "promoting unit" and "growth pole" when analyzing the unbalanced economic growth in space. The so-called "promotion unit" is the dominant economic unit. When it grows or innovates, it can induce other economic units to grow. The driving unit may be a factory or a group of factories in the same department, or a collection of factories related to the contractual relationship between * * *. The so-called growth pole is a specific area where the driving units are concentrated. Peru believes that drive stocks have three characteristics: (1) emerging, high-tech and promising industries; (2) Industries with wide market demand and meeting the needs of the international market; (3) Industries that have a strong driving effect on other industries. The growth pole has both polarization effect and diffusion effect.

5. Theory of technological innovation

Schumpeter, an Austrian-American economist, believes that technological innovation and its diffusion have promoted the formation of enterprise clusters in various departments with industrial relevance. Because innovation is not an isolated event, nor is it evenly distributed in time, on the contrary, they tend to cluster, or cluster. This is only because, after the success of innovation, first part, and then most enterprises will follow suit; Secondly, innovation is not even distributed randomly and evenly in the whole economic system, but tends to be concentrated in some departments and their neighboring departments. When Schumpeter explained the economic cycle or economic fluctuation, he believed that besides external factors such as war, revolution and climate, the non-cyclical factors of innovation clusters and growth were the main reasons for economic fluctuation. There are two important points in the above understanding: the first innovation will be much more difficult than the subsequent similar innovations, and once the entry barrier is broken, the enlightenment to the latecomers, including ideas, understanding, confidence and behavior, will be greatly encouraged; Innovation is a learning process. The failure lessons and successful experience of the first innovation will provide reference for latecomers to make fewer detours, achieve innovation success quickly and gain opportunities that exceed the average profitability of society quickly. The result of two important points will objectively induce latecomers to flock, that is, to form a cluster phenomenon of technological innovation. There are many similar examples in history. For example, due to the chemical similarity of synthetic materials, a company's first innovation will definitely increase the possibility of the next invention; After the emergence of computers, the cycle of re-innovation and product upgrading has been shortened rapidly, which is the advantage of clustering.

6. Industrial cluster theory based on competitiveness

In today's increasingly globalized economy, under the global supply chain and market strategy of multinational companies, input factors can be obtained from many different regions, but the reduction of transportation costs has not prevented many companies from setting up their companies in raw material sources or large markets. Harvard university professor Michael? MichaclePorter first put forward the theory of industrial cluster under the global economy, and viewed and analyzed the phenomenon of industrial cluster from a brand-new perspective-competitiveness. 10 industrial cluster is playing an increasingly important role in the increasingly complex competition, knowledge economy and dynamic economy. Porter put forward the theory of "diamond system" composed of four key elements, and analyzed and studied the cluster phenomenon from the perspective of competitiveness. The results show that the cluster not only reduces the transaction cost and improves the efficiency, but also improves the incentive mode and creates collective wealth such as information, professional system and reputation. More importantly, clusters can improve the conditions for innovation, accelerate the growth of productivity, and be more conducive to the formation of new enterprises. Although the fierce competition among enterprises in the cluster temporarily reduced profits, it established a competitive advantage over enterprises in other regions.

7. Other comments related to this group.

(1) Qian Yingyi (1999) used the concept of "habitat" to explain the competitive advantage of cluster enterprises. He believes that enterprise cluster is the "habitat" of startup companies, which includes at least seven factors: ① open production structure; (2) Frequent turnover of talents and frequent job hopping; (3) The legal environment is more relaxed and job-hopping is easier; (4) Allow failure; ⑤ Outlook on life and work; ⑥ There are many immigrants; ⑦ National Growth Enterprise Market (Nasdaq) in the United States.

(2) Scholars in Taiwan Province Province pay attention to the social network theory to explain the formation and development of small and medium-sized enterprise clusters in Taiwan Province Province. They believe that for a long time, the close industrial cluster relationship between small and medium-sized enterprises is an important foundation for the vigorous economic development of Taiwan Province Province (Chen Huijuan and Wu Bingen, 2000). This cluster relationship is based on the mutual commitment and trust between enterprises in the cluster (Wang Ruyu, Zeng Shuwan; 1992), and this kind of commitment and trust depends on the social relationship between business owners, so the social relationship between business owners is the main force to maintain the stability of enterprises in the group. Relationships formed by the same family, the same nation, fellow villagers, classmates, colleagues, etc. Invisibly standardized and maintained the operation order of the cluster area (Chen, 1994).

(3) Mainland scholars are mainly concentrated in economically developed areas in Jiangsu, Zhejiang and Guangdong, especially in Jiangsu and Zhejiang. Due to the rapid development of small and medium-sized enterprise clusters in Jiangsu and Zhejiang provinces, Jiangsu and Zhejiang scholars have studied this issue from the perspective of regional economy (Fang Minsheng,1997; Zhang Renshou,1999; Wu Yunliang, 2003), Property Right System (Ying Huanhong, 200 1), Institutional Change (Zhu Kang,1999; Lin Yifu, 2003) and other aspects have carried on some discussions and drawn relevant conclusions; Guangdong scholars pay more attention to the study of enterprise clusters from the perspective of enterprise network or entrepreneur network, and also emphasize the important role of entrepreneurial innovation in cluster development (Li Xinchun, 2000; Wu, 2001); Wang Jici of Peking University (200 1) regards enterprise clusters as a space suitable for innovation, which can be attributed to two groups of effects: geographical proximity and social roots.

(4) Japanese scholar Aoki Masahiko (200 1) put forward that "the Silicon Valley model can only be understood in the context of the relationship between a group of innovative enterprises and a group of venture capitalists" from the perspective of the control right of venture capitalists, and put forward the governance mechanism of venture capital under the tournament system. Aoki mainly discusses the development of enterprise clusters from the perspective of enterprise governance, which creates a brand-new idea for the study of enterprise clusters. However, he overemphasized the influence of agent market on the formation of corporate governance mechanism, while ignoring other aspects.

(5) Deng Ning (1988) put forward the "compromise theory of international production", and believed that regional advantages depend on the input of factors, the geographical location of the market, infrastructure and so on. And these are the embodiment of agglomeration effect. Deng Ning (1993) also believes that "with the rapid development of economic globalization, the location selection of multinational companies should not only consider traditional factors and their costs, but also consider agglomeration economy, transaction costs and dynamic external economy".

(6) Krugman (199 1) explained the concentration of industrial activities from the perspective of regional economy and economies of scale. The key to agglomeration effect is economies of scale, especially external economies of scale. Agglomeration can lead to the decrease of the average cost of producing a product, which in turn leads to the increase of scale effect.