With this vast marketplace, China’s manufacturing industry is more likely to produce scale economy effect, lower R&D costs and achieve industrialization.
Secondly, this new round of scientific and technological revolution has provided China’s manufacturing industry with a strategic opportunity to catch up and accelerate the structural upgrade. Currently, the world has entered into an era of intensive innovation and rapid development of emerging industries. A new round of scientific and technological revolution is being actively incubated. In the past three revolutions of science and technology, China had always been a follower. However, China is now actively leading the technological innovations dominated by new energy, information science and biomedicine. Based on the matured conventional technologies accumulated over the past 30 years of development, China’s manufacturing industry is closer than ever to becoming a world leader in terms of technological foundation and R&D capabilities. If China’s manufacturing industry can seize this technological revolution opportunity, it will be able to catch up with developed countries in a number of important areas and become a leader in industrial development.
1.4.2 Challenges
At the same time, the highly complex and uncertain situations at home and abroad, plus the status quo of industry development, pose three major challenges to China’s manufacturing industry.
Firstly, international financial crisis has shattered the original consumption patterns of developed countries and imposed structural constraints on the export demands of China’s manufacturing industry. After the financial crisis, major changes are seen in the old consumption patterns and the export models of developed countries and developing countries: The existing high-consumption and high-debt model in the US and Europe is no longer sustainable. This makes it necessary to reduce China’s long-term reliance on export to drive the growth of manufacturing industry, which imposes great constraint on China’s exports. The long-lasting pattern of strong consumption driving the manufacturing growth in developed countries is difficult to be restored. Global trade pattern will also change accordingly. Trade barriers will be in various forms and occur at high frequency.
Secondly, the developed countries have started the journey of manufacturing’s “return”. At the same time, powered by the cost advantages in labor and resources, the new-type developing countries have squeezed into the low and mid-end manufacturing markets, posing double threats to China’s manufacturing industry. In the post-financial crisis era, western developed countries witness setbacks of missing real economy. They advocate the “re-industrialization” strategy and vigorously develop emerging industries such as new energy, information and biology industries to revitalize the manufacturing industry and seize the high ground of high-end manufacturing industry. Besides, with the gradually climbing labor and resource costs, China’s demographic dividend is fading away. ASEAN countries, Latin America and other countries are gradually eating into the world’s low-end manufacturing markets. China’s manufacturing industry has to deal with the double pressure from accelerating the adjustment of economic structure and promoting industry upgrading.
Thirdly, low independent innovation capabilities lead to excessive dependence on the foreign core technologies in some key component and part manufacturing processes. With a “big but not strong” industry, manufacturing products exports will face not only increasingly unfair trade barriers, but also the constraints of increasing factor costs and environmental resources, limiting the enhancement of international competitiveness.
1.5 Research intention and structure of this book
Manufacturing industry has played a key role in the four decades of high-speed economic growth after the Reform and Opening-up. In the accelerated globalization of recent years, a number of “tide riders” have sprung up in China’s manufacturing industry. They stand out in both the domestic and international markets and have changed from merely “catching-up” with the leading companies to “surpassing” and “taking the lead” to a certain extent. But at the same time, due to the rising cost of production factors, the international financial crisis and the lack of independent innovation capabilities, etc., China’s entire manufacturing industry is facing a daunting test. To secure the competitive advantages of China’s manufacturing industry in the new competitive global environment and compose another brilliant chapter is the key to China’s sustainable economic development in the new century.
Powered by the torrents of globalization, multinational corporations have adjusted their strategies. Based on their existing business strength, multinational corporations reinforce their innovation efforts and implement globalization strategies to realize their values. This may aggravate the polarization of the rich and the poor. Facing such daunting test, companies of developing countries must recognize that innovation is the fundamental driving force behind economic globalization. In the context of globalization, the innovation process presents new features. It is necessary to explore the innovation issues through analyzing the current initial capacity inadequacy of the latecomer companies in developing countries in the context of economic globalization. In the globalized environment, how can China’s manufacturing industry establish, maintain, consolidate and develop competitive advantages? This is an urgent question that has caught the attention of Chinese scholars and entrepreneurs. It’s also a question pressing for early solutions.
This study aims to apply the theory of technological innovation based on China’s actual situation and the recent findings of international management academia. In view of the new challenges posed by the manufacturing globalization to Zhejiang’s manufacturing companies, studies were conducted on the non-linear relationship and dynamic suitability between the dynamically evolving rules of “secondary innovation” and corporates’ organizational learning modes. Analysis was made on the internal mechanism adopted by Zhejiang’s manufacturing companies to win the “latecomer’s advantages” in globalization process. Such analysis can establish a strategic management framework focused on improving the international competitiveness of China’s manufacturing industry.
In the context of strengthening global integration in the era of information-knowledge economy, the manufacturing industry is undergoing worldwide strategic adjustment and reorganization, to enhance international competitiveness and try to stand out in the face of new historical opportunities. The development of manufacturing industry is a decisive force that determines whether the Chinese economy can continue to develop in the 21st century. From the dynamic perspective, being the key innovation makers in the open system, manufacturing companies need to secure the dynamic suitability between their development strategies and internal and external environments if they want to gain competitive advantages in globalization process, at different development stages and in competitive environments. One of the key factors in achieving this suitability is to promote companies’ secondary innovation and win the latecomer’s advantages through secondary innovation. This is the fundamental way for China’s manufacturing industry to win in the global competition.
The following chapters of this book are organized as follows: Chapter 2 introduces the theoretical background and practical background of the construction and development of the secondary innovation theory; Chapter 3 elaborates on the dynamic model of secondary innovation; Chapter 4 presents the evolution and development of the dynamic theoretical model for secondary innovation; Chapter 5 dwells upon the dynamic pattern of secondary innovation and organizational learning; Chapter 6 focuses upon the cultivation of technological innovation capabilities in the dynamic process of secondary innovation; Chapter 7 is about constructing
