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The Asian Model of the Industrial Cluster Policy
For the Global Value Chain
October 10, 2015
Akifumi KuchikiNihon University
1
Only 300 hectares in Iran for Industrial agglomeration!
Iran will start its growth from 300 hectares! (3 Km2)
Objective: In Iran, we will create China’s Shenzhen !!!
Industrial agglomeration in Asia:Kaohsiung in Taiwan in the 1960s.Penang in Malaysia and Eastern Seaboard in Thailand in the 1980s.Shenzen in China in the 1990s Industrial Cluster Policy in Iran!
1. What kinds of the segments of an industrial cluster are built?2. Is it an efficient sequence of forming the segments?3. Who is a leader?
Key words: segment,sequence, leader
Questions:
In other words,
•The segments = The investment environment•Sequence = Prioritization•Leader = Human resource
5
6
Bases1. Segments of industrial cluster
Capacity SegmentInfrastructure Roads Railways Airports Ports Communication Water supply Electricity Industrial zonesLabor Unskilled labor Engineers ManagersInstitutions Liberalization Land ownership Foreign currency exchangeLiving environment Schools Hospitals Entertainment Shopping
Conclusions: The Asian model:Flowchart Approach:
•1. Segments•2. The economies of sequence in forming the segments.
•3. We must find a leader as an initial value of a sequence.
industrial cluster(a bunch of grapes)
7
1. Industrial cluster
6
A bunch of grapes
Kuchiki’s Definition: industrial cluster of the industry
consists of two stages:
Stage 1 is the stage of Agglomeration,
Stage 2 is the stage of Innovation.
9
10
Sequence a b c d
Belly 腹 Breast 胸 Heart 心臓 Head 頭
Anchor firms Water
supplyIndustrial zone Port
2. The economies of sequence
Today’s topics:Industrial clusters in Asia:
1. Automobile : Guangzhou, China
2. Electronics: Thang Long Industrial Park (TLIP) in Hanoi, Vietnam
3. Automobile: Eastern Sea Board in Thailand
11
Automobile Clusters = Global VC
12
Nagoya
Kyushu
Shanghai
Guangzhou
Beijing/Tianjin
Manila
Kuala Lumpur
Jakarta
Bangkok/Rayong
China
ASEAN
India
Delhi
Mumbai[Bombay]
Korea
13
1. Guangzhou’s Automobile Industry Cluster
14
The Asian model:Flowchart Approach:
(a) industrial zones (b) anchor firms (c) the related firms (suppliers) (d) segment building (e) leader
15
16Source: A. Kuchiki and K. Yoshida
Step Ⅰ : (a)
Agglomeration(b)
(c)
(d)
Step Ⅱ : (a)
Innovation(b)
(c)
(d)
Industrial zone
Capacity building(Ⅰ )
3. Human resources
4. Living conditions
Anchor firm
1. Infrastructure
2. Institutions
Related firms
Anchor persons
Cluster
3. Human resources
4. Living conditions
1. Infrastructure
2. Institutions
Capacity building(Ⅱ )
Universities / Research institutes
The Asian Model: Flowchart Approach
(a) Industrial Zones and Segment Building:
6 Industrial Zones
17
18
Source: The Bureau of Foreign Trade and Economic Cooperation of Guangzhou Municipality, A Foreign Investment Guide to Guangzhou Auto Industry , 2005.
Zone East Auto-Industry Belt South of Guangzhou Northwest of Guangzhou
Capacity Guangzhou Economic & Technological Development District
Xingtang Industrial Processing Zone of Zengcheng City
Huangpu District
Nansha International Automobile Industry Park
Panyu Automobile High-tech Industry Base
Huadu Auto City
Infrastructure: ( )Electriciⅰty Supply
A 110 thousand KVA (kilovolt amperes) transformer substation and completed underground electrical network with two-circuit electricity supply.
A 500 thousand KVA transformer substation and 4 transformer substations of 110 thousand KVA.
Electricity Network with 6 of 110 KVA transformer substations, a 220 KVA transformer substation and Huangpu Power Plant of 1.1 million KW (kilowatt).
Several 110 thousand VA transformer substations. Zhujiang Powerplant, with capacity of 1.2 million KW and many thermal power stations with 50-100 thousand KW.
Supplied by Shilou 110 KV Transformer Substation ,and a new 110 KV transformer substation is under construction.
15 transformer substations with 110 KV and a 220 thousand KV transformer substation. Power supply rate to enterprises reaches 100 % with daily supply of 4,760,000 KW/h.
( )Water ⅱSupply
Xinhe Waterworks with daily capacity of 300,000 tons
Four large waterworks, Dadun, Xizhou, Xinhe and Shapu, providing daily water capacity of 1.2 million tons.
Supplied by Guangzhou Municipal Waterworks
3 main water pipes from Shawan Waterworks are serving the whole Park with daily supply of 250,000 tons.
Supplied by Shawan Waterworks with daily capacity of 560,000 tons.
3 waterworks with daily supply capacity of 200,000 tons and the water quality reaches State’s sanitary standards.
( )Sewagⅲe Treatment
A modern wastewater disposal station enabling separate treatment for underground water and sewage water
First stage of 300,000-ton waste water disposal station is under construction
Water and waste drainage system is under construction , which is available with first stage of Da Shadi Wastewater Disposal Station of daily capacity of 200,000 tons
Guangzhou Nansha City Wastewater Disposal Station, with daily handling capacity of the first stage of 100,000 tons
The project of drainage system which adapt the rain water type drainage, capable of 160,000 ton/day wastewater disposal is under way
150,000-ton/day waste water piping system
Human Resource:
Education
Close to Gunagnzhou Zone of High Learning and Guangzhou University City. Various of middle schools, primary schools, kindergartens and Japanese schools are located within the area
Within 30-minute drive to South China University of Technology, Sun Yet-Tsen University, Guangdong University of Foreign Studies, Guangdong Commercial College
Close to Guangzhou University City where many high educational and research institutes are located, capable of supplying rich human resources to enterprises
Yingdong Middle School and Nansha Central Primary School, etc
Located in the southeast of the University City, only 20-minute drive with rich human resource available
Gungzhou Institute of Automobile of South China University of Technology, Gunagdong Transportation Technology College, Guangdong Peizheng Business School
Living Conditions : ( )Environⅰment
A sound environment of green hills and clean water, with villa gardens, noble residences and tourist resorts
Ecological residential areas, such as Country Garden Phonix City, Jinxiu Heung Kong Xinjiang and Xinshijie Residential Area
Residential areas including Wanke City, Huangpu, Jinbi Millenium are within the area with average estate price at 3,500 yuan / ㎡
The area is composed of river and lake with nice natural environment and well-preserved natural ecological zone
Modern residential areas with nice environment, excellent facilities, and convinient transportation network are available
The Sunshine Residential Area is surrounded by favorable environment
( )Food & ⅱEntertainment
A four-star hotel (Foreign Business Center), and a golf court
Two five-star hotels and three four-star hotels and four golf courts
The District is well-known for Nangang Seafood and Bicum Lichi, a delicious fruit exclusively from Guangdong Province
Tourist attraction with Nansha Puzhou Park, Waterside Street, Nansha Golf Court, Sunflower Park, Wetland Park, Nansha Hotel, Clifford Hotel, etc
Lotus Hill, one of the Eight New Scenes of Guangzhou, and golf club, an ideal place for recreation
8 of starred hotels, 2 golf courts and shopping and entertainment facilities in the Sunshine Residential area, Automobile city
( )Medical ⅲServices
GETDD Hospital (322 beds) and more than 10 medical institutes
General hospitals with advanced technology and equipments , several medical institutes
More than 10 hositals are available including Sun Yet-Tsen Huangpu Affiliated Hospital
Nansha Hospital Two A-class hospitals, one international medical institute and the medical institutes at every town
18 hospitals and the world-level Clifford Hospital is under construction
Source: A Foreign investment Guide to Guanzou Auto Industry, 2005
Equipment installation
Examination and approval ofcompleted project
Business operation
Opening of an account with a bank
Registration of finance andstatistics
Registration at the Customs Recruitment of employees
Handling of labor insurance
Procedure for Setting up Foreign-invested Enterprises
Application for the business license
Engraving the seal of the enterprise
Registration at tax authority
Signing of contract on land use /contract on leasing of factory
building
Application for project construction;Construction; Decoration
Registration of foreignexchange;application for opening a
RMB account
Pre-verification of the name of the enterprise
Verification of the project site and its impact on surrounding environment
Submission of projecct feasibility study report, contact, articles of association
Application for the organization code
Acquirement of the Approval Certificate of the Foreign-invested Enterprise
19
Segment: (b) Institutions: One-stop Services
(c) Anchor firms:
20
Toyota Honda NissanJoint venture company Guangzhou Toyota Motor
Co., Ltd.Guangzhou Honda Automobile Co., Ltd.
Dongfeng Nissan Motor Company
Establishment 2004 September
2006 May
1998 2004 May
Joint venture partner Guangzhou Automobile
(JVs with First Automotive Works in Tianjin)
Guangzhou Automobile,
Dongfeng Automobile
(Engines)
Dongfeng Automobile
Main products Camry Accord, Fit Sunny, Tiida
Annual production volume
100,000 (2006)
Production capacity is 300,000.
240,000 (2004).
Second plant is under construction. (Scheduled to complete in 2006.
150,000
Location of headquarters
Southern coast of Guangzhou city (Nansha district:797 ㎢ )
Center of Guangzhou city. (Guangzhou Economic Development Zone)
North of Guangzhou city. (Huadu district: 50 ㎢ )
Agglomeration of components makers
Nansha district (12 keiretsu companies),
Shunde district Foshan city (6 Keiretsu companies).
Guangzhou Economic Development Zone
Huadu district
Main components makers
Japanese makers Japanese makers Taiwanese makers,
Japanese makersSource: Based on Tsukada (2005), Kuchiki arranged partly.Notes: Korea Hyundai Motor and Guangzhou Automobile produce commercial vehicles in Huadu. (Total investment: 135 billion yen) Hyundai Motor and Beijing Automobile Investment Co. produce passenger vehicles.
(d) Related Firms: Suppliers :
Anchor Firms: Honda, Nissan and Toyota => Agglomeration
21
NISSAN’s Agglomeration(2003-06)Company name Investor Products Foundation
1 Dongfeng Motor Corporation Nissan Motor Co., Ltd. Dongfeng Motor Corporation Passenger cars, commercial vehicles 2003
2 Unipres Guangzhou Corporation Unipres Corporation Car body components 2003
3 Yorozu Bao Mit Automotive Co., Ltd.Yorozu Corporation, Shanghai Bao Steel Int. Economics
&Trading Co., Ltd., Mitsui &Co., Ltd.Suspensions 2003
4 Guangzhou Mitsuike Autoparts Co., Ltd. Mitsuike Corporation Metalic dies 2003
5 Dongfeng Passenger Vehicle Research & Development CenterDongfeng Nissan Research and development center 2004
6 Guangzhou Hitachi Unisia Automotive Parts Co., Ltd. Hitachi Automotive Systems Power Steering System 2004
7 Fuzhou Fukwang Rubber & Plastic Co., Ltd. Kinugawa Rubber Industrial Co., Ltd. Body sealing products 2004
8 Guangzhou Hua Jing Automotive Steelparts Co., Ltd. Mitsui & Co., Ltd. Steel plates 2004
9 Kiriu-Lioho Co., Ltd. Kiriu Corporation, Lioho Machine Works, Ltd.(Taiwan)Brake parts 2004
10 Guangzhou Nishikawa Sealing Systems Co., Ltd. Nishikawa Rubber Co., Ltd. Sealing parts 2004
11 Alpha (Guangzhou) Automotive Parts Co., Ltd. Alpha Corporation, Marubeni Vehicle Corporation Key sets 2004
12 Xingguang (Guangzhou) Autoparts Co., Ltd. (*) Hoshi Diecast Kogyosho Die-castings 2004
13 Tacle Guangzhou Automotive Seat Co., Ltd. Tachi-S Co., Ltd. Automobile seats 2004
14 Guangzhou Kasai Automotive Interior Trim Parts Co., Ltd. Kasai Kogyo Co., Ltd. Interior parts 2004
15 Calsonic Kansei (Shanghai) Corporation (Huadu Branch) Calsonic Kansei Corporation Module Products 2005
16 MI Steel Processing Guangzhou Co., Ltd. Marubeni Itochu Steel Inc. Steel plates 2005
17 CAST Autoparts Co., Ltd. (*) Daiichi Kinzoku Co., Ltd. Automobile parts 2005
18 Fuji Autotech Guangzhou Co., Ltd.Shanghai Min Fang Auto Parts Co,. Ltd.
Fuji Kiko Co., Ltd., Tachi-S Co., Ltd.Automobile seats 2005
19 Calsonic Kansei (Guangzhou) Components Corp. Calsonic Kansei Corporation Instrument panels, exhaust products 2005
20 Guangzhou Mahle Filter System Co., Ltd. Mahle Filter Systems Japan Corporation Air filters, motor heat insulation boards 2005
21 Tachi-S Trim Guangzhou Co., Ltd. Tachi-S Co., Ltd. Automobile seats 2005
22 Engine factory of Dongfeng Nissan Dongfeng Nissan Engines 2006
23 Toyo Quality One Guangzhou Co., Ltd. (*) Toyo Quality One Corporation, Nagase & Co., Ltd. Automotive devices 2006
24 Guangzhou Nanjo QuanXing Autoparts Co., Ltd. (*) Taiwan QuanXing, Nanjo Kogyo Automobile seats 2006
25 Guangzhou Kanto Autoparts Co., Ltd. (*) Kanto Auto Works, Ltd. Auto bodies and parts 2006
Source: Inagaki (2004), Huadu District, Guangzhou (2005)
(* ) = Author's translation.
TOYOTA’s Agglomeration(2002-06)Company name Investor Products Foundation
1 Foshan Melx Leather Co., Ltd. (*) Melx Co., Ltd. Leather products for automobile seats 20022 Foshan Nichiwa Co., Ltd. (*) Nichiwa Co., Ltd. Bolts, nuts, pressed parts 20033 Toyota Gosei (Foshan) Rubber Parts Co., Ltd. Toyota Gosei Co., Ltd., Toyota Tsusho Corporation Body-sealing products for automobiles 20044 Aisin Seiki (Foshan) Automotive Parts Co., Ltd. Aisin Seiki Co., Ltd. Engine parts 20045 Aisan (Foshan) Auto Parts Co., Ltd. Aisan Industry Co., Ltd., Toyota Tsusho Corporation Throttle bodies, Engine valves 20046 Foshan Japan Brake Co., Ltd. (*) Japan Brake Industrial Co., Ltd. Brake assemblies 20047 Foshan Shunde Yinhe Motorcycle Co., Ltd. (*) Axle Corporation Motorcycles 20048 Foshan Tokairika Automotive Parts Co., Ltd. Tokai Rika Co., Ltd., Toyota Tsusho Corporation Switches, steering locks 2004
9 Koyo Lioho (Foshan) Automotive Parts Co., Ltd.Koyo Seiko Co., Ltd. ,Koyo Metaltec Co., Ltd.Toyota Tsusho Corporation
Bearings 2004
10 Foshan Yutaka Auto Parts Co., Ltd. Yutaka Giken Co., Ltd. Torque converters 200411 Foshan Summit Nikka Mold & Metal Products Co., Ltd. Sumitomo Corporation Mold and metal products 200412 Toyota Gosei (Foshan) Auto Parts Co., Ltd. Toyota Gosei Co., Ltd., Toyota Tsusho Corporation Interior and exterior parts 200413 Toyoda-Koki Automotive (Foshan) Co., Ltd. Toyoda Machine Works, Ltd. Power steering parts 200414 Takagi Auto Parts (Foshan) Co., Ltd. Takagi Seiko Co., Pla-Net Corporation Plastic components, molds 2004
15 Kobe Wire Products (Foshan) Co., Ltd.Kobe Steel., Ltd. , Metal One Corporation , Kyodo Shaft Co., Ltd.
Sugita Wire, Ltd.Steel bars and steel wires 2005
16 Elastomix (Foshan) Co., Ltd. Elastomix Co., Ltd. Carbon master batch 2005
17 Guangzhou Parkerizing Co., Ltd.Nihon Parkerizing Co., Ltd. ,Asahi Chiyoda Kogyo Co., Ltd.Hamamatsu Netsuhori Kogyo Co., Ltd. ,Parker Netsusyori Kogyo K.K.
Surface treatment for automobile parts 2005
18 Toyota Boshoku Foshan Co., Ltd. Toyota Boshoku Corporation Oil filters 200519 Fujikura Kasei (Foshan) Paint Co., Ltd. (*) Fujikura Kasei Co., Ltd. , Kyokuto Boeki Kaisha, Ltd. Coating for plastics 200520 Foshan Unytite Co., Ltd. (*) Unytite Corporation Bolts, nuts 200521 Tokai Spring Mfg. (Foshan) Co., Ltd. Tokai Spring Mfg. Co., Ltd., Nagase & Co., Ltd. Precision leaf springs, press products 2005
22 Yamasei Automotive (Foshan) Co., Ltd.Toyoda Machine Works, Ltd. , Yamasei Kogyo Co.,The Yokohama Rubber Co., Ltd.
Power steering parts 2005
23 Sanyo Seiko (Foshan) Co., Ltd. (*) San-Esu Mold parts 200624 Foshan Dongrong Xuri Electrics Co., Ltd. (*) Toei Kagaku Kogyo, Xuri Co. Automobile parts 200625 Foshan Nitigura Co., Ltd. Nihon Glassfiber Industrial Co., Ltd. Exhaust manifold covers 200626 Foshan Shunde Yazaki Auto Parts Co., Ltd. Yazaki Corporation Automotive instruments 200627 Hegu (Foshan) Automotive Fuel System Co., Ltd.(*) Nichiwa Sangyo Co., Ltd. Automobile parts 200628 Daiichi Bussan (Foshan) Co., Ltd. (*) Daiichi-Bussan Co., Ltd. Insulators 200629 Usui Automotive Parts Co., Ltd. (*) Usui Kokusai Sangyo Kaisha, Ltd. Brake tubes, power steering tubes 200630 Enkei Aluminum Products (Guangdong) Co., Ltd. (*) Enkei Corporation Aliminum wheels 200631 Foshan Shunde Lefu Hardware Precise Mold Co., Ltd. (*) Osamu Fukui, Tsuneo Imai, Yosuke Fukui, Masaru Nakamura Mold parts 200632 Azimit Auto Parts (Foshan) Co., Ltd. (*) Azimit Mold parts 200633 Sugiyama Kogyo (Foshan) Mold Co., Ltd. (*) Sugiyama Kogyo Co., Ltd., Toyota Tsusho Corporation Mold parts 2006Source: Inagaki (2004), Nansha Development District (2005)
(* ) = Author's translation.
HONDA’s Agglomeration 1997-2006(Suppliers)Company name Investor Products Foundation
1 Guangzhou Showa Autoparts Co., Ltd. Showa Corporation, Kanematsu Corporation Shock absorbers 19942 Guangzhou Stanley Electric Co., Ltd. Stanley Electric Co., Ltd., Honda Motor (china) Investment Co.,Ltd. Automotive lightning products 1999
3 Guangzhou Mitsuba Electric Co.,Ltd. MITSUBA Corporation., Mitsuba China (Hong Kong) Ltd.Auto electrical systems, Two-wheeledvehicle engine support
1999
4 Guangzhou Sanoh Seikan Co., Ltd. Sanoh Industrial Co., Ltd.Automotive parts (brake tubes, fueltubes, other tubular parts)
1999
5 NIPPON LEAKLESS Corporation GZ LEAKLESS Co.,Ltd. Automotive Gaskets 19996 Auto Parts Alliance (China) Ltd. Kikuchi Co.,Ltd., TAKAO KINZOKU KOGYO Co., Ltd. Aluminum structural assemblies 20017 Guangzhou Daiyu Seat Co., Ltd. Daiyu Co.,Ltd. Sewn automotive seat components 20018 Guangzhou Marujun Co.,Ltd. Marujun Co.,Ltd. Automotive stamping parts 20019 NHK-Uni spring(Guangzhou)Co.,Ltd. NHK Spring Co.,Ltd. Coil Springs, Stabilizers 2002
10 Guangzhou NTN-Yulon Drivetrain Co.,Ltd. NTN Corporation, Yulon Group(Taiwan) Constant-Velocity Joints (CVJs) 200211 Guanzhou Vigo Stanley electric company limited Stanley Electric Co., Ltd. Automotive Lightning Products 200212 Guangzhou Nanbu Plastics Co.,Ltd. Nanbu Plastics Co.,Ltd. Plastic products 200213 Guangzhou GKI Car Interior Parts Co.,Ltd. ITOCHU Corporation, Kotobukiya Fronte Co.,Ltd. Automotive upholstery 200314 NHK Spring Precision (Guangzhou) Co.,Ltd. NHK Spring Co.,Ltd. Suspension Springs 200315 Honda Automobile (China) Co., Ltd. Honda Motor Co.,Ltd. Motorcycles, Automobiles 200316 Guangzhou DEMPU Automobile Parts Co., Ltd. N.A. (*1) Plastic products 200317 Guangzhou Shiroki Corporation Shiroki Corporation Doorframes, Moldings 200318 Guangzhou Ahresty Automobile Parts Co.,Ltd Ahresty Corp. Die Casting products 2003
19 Guangzhou You-Ri Automotive Parts Co.,LtdSumitomo Pie & Tube Co.,Ltd., Sumitomo CorporationNippon Steel Corporation
Electric-resistance welded pipes 2003
20 Tokai Rubber (Ghuangzhou) Co.,Ltd. Tokai Rubber Industries Ltd.Anti-vibration rubber parts,Automotive hoses
2003
21 Honda Engineering China Co., Ltd. Honda Engineering Co., Ltd., Honda Motor (China) Investment Co.,Ltd.Mold parts 200422 Guangzhou NEIVE Co.,Ltd. NEIVE Co.,Ltd. Automobile Parts 200423 Decker System China (DSC) Decker Corporation, Chinese United Faith Automobile Parts 200424 Guangzhou Tech Interior Trim Manufacturing Co.,Ltd. TS Tech Co.,Ltd. Sewn automotive seat components 200425 TEIKURO Guangzhou Corporation Teikuro Inc. Surface treatment for mold parts 200426 Guangzhou Bridgestone Chemical Products Co., Ltd. Bridgestone Corporation、Guangzhou Automobile Group Co., Ltd. Urethane foam 200427 Guangzhou Fuji Tool Co.,Ltd. Fujiseiko Limited Carbide Tools 200428 Toyo Automotive Parts (Guangzhou) Co., Ltd. Toyo Tire&Rubber Co.,Ltd Anti-vibration rubber parts 200429 Ring Techs Automobile Products Co.,Ltd. Ring Techs Co.,Ltd., Metal One Corooration Steel wheels for passenger cars 200430 Tsuchiya (Guangzhou) Automotive Components Co., Ltd. Tsuchiya Co., Ltd. Plastic Products 200431 Akebono Corporation (Guangzhou) Akebono Brake Industry Co.,Ltd. Brakes 200432 Ohashi Technica (Guangzhou) Co., Ltd. Ohashi Technica, Inc. Automobile Parts 200433 Ghuangzhou Uchiyama Manufacturing Co.,Ltd. Uchiyama Manufacturing Corp. Gaskets, Seals 200434 Tocalo& Han Tai Co., Ltd. TOCALO Co.,Ltd., HAN TAI Co.,Ltd. Surface modification 200535 Guangzhou Hori Automobile Glass Co., Ltd. Hori Glass Co.,Ltd Plastic parts for windshields 200536 Guangzhou Linjun Automobile Internal Decoration Co., Ltd.HAYASHI TELEMPU Co.,Ltd.,Guangzhou Automobile Group Co., Ltd.Automotive upholstery 200537 Guangzhou Ninomiya Cold Forging Automotive Parts Ninomiya Co., Ltd. Cold forged products 200638 Tigerpoly Manufacturing Tigaers Polymer Corporation Rubber seats, Plastic hoses 2006
Source: Inagaki (2004), Shunde District, Foshan City (2005)
(e) Leader: Local Government
25
Guangzhou AutomobileIndustry Park (GAIP)
Guangzhou municipality
Industrial zones
Guangzhou AutomobileIndustry Group (GAIG)
Guangzhou Automobile Group
Guangzhou State-ownedEnterprise Projects
Honda Nissan Toyota HyundaiIsuzu
Their related companies
(6 companies)
(6 industrial zones)
(21 companies)
(14 component companies)
(30 companies)
Anchor firms
Source: Author’s
Sequence 1: Honda’s effect
26
(e) Leadership of a mayorGuangzhou Economic Development Zone
Foshan Industrial Park
Zengcheng Industrial Park
Capacity buildingⅠ
HONDA
Keiretsu firms : Tier1, Tier2, Tier3
Capacity building Ⅱ
Related firms
Automobile Industry Agglomeration
R&D, Technology transfer
Automobile Industry Cluster
Source: A. Kuchiki and H. Tsukada
Electricity, railway : actors = Guangzhou city, Guangdong Province
1998
2005
Future
20012002
Future (Yonghe Economic Zone), Foshan
(Innovation), Universities, Research Institutes
(Anchor firm) (Decision Making by the president of Japanese Headquarters)
Zengcheng, Zongshan, Foshan
1. Universities and research institutes: university park?2. Local government incentives: one stop service
Human resource management: Japanese interpreters: actors = JETRO
27
Sequence 2:Toyota’s Effect
(e) Leadership of a mayor
Source: A. Kuchiki and H. Tsukada
(Automobile Industry Agglomeration)
Competition between the industrial zones
(Construction of subway: actors=Guangzhou
city )
(Construction of highway: actors=Guangzhou city)
Capacity building I
TOYOTA
Keiretsu: Tier1
Keiretsu: Tier2, Tier3 Chinese local firms
Related manufacturers and service industries I
Automobile Industry Cluster
Capacity building II
Technology transfer
Finance R &D LogisticsMachinery Equipments
(Innovation)
(actors to invite firms=Guangzhou city, JETRO)
Nansha, Shunde, Foshan(a)
(b)
(c)
Cluster
Step I :Agglomeration
Step II :Innovation
Summary:
1 . Segment building for Anchor Firms:
Honda, Nissan and Toyota
2 . Local government: Leadership
28
31
2 . The Electronics Industry Cluster in northern Vietnam:
Segment Building: The effects of ODA:
(a) Highway Route 5, (b) Haiphong Port, (c) Institutional Reform
31
32
Industrial zones and segment buildingContents Items Participation
Development of Land
Industrial zones Site development
Central and local governments
Capacity Building
Tax incentives
Central and local governments
Infrastructure
(a) Roads, (b) ports
ODA
(c) Institutions
Investment Climate
The government and ODA
Human Resource: Technological Transfer
ODA
Living conditions
Restaurants, Shops
Foreign direct investment
33
Sequence 3: Industrial Clusters in Northern Vietnam
Hanoi (TLIP) Haiphong Haiphong Port
Nomura Haiphong IZHighway No.5
Northern Vietnam
A Model of Forming Industrial Clusters
Thang Long IP (TLPI)
Nomura Haiphong IZ (NHIZ) +Segment building
(a)Highway No.5, (b)Haiphong Port(c)Institutional Reform (One stop service, tax)
Anchor Companies Canon, Honda, Panasonic, Galaxy
Related and Other Companies Japanese companies, other foreign and local companies
Industrial Clusters Development of Northern Vietnam
Canon’s Effect
34
Segment: (a) Highway and (b) Port
Type Poduction
Market- Local
Market-Export
Import Hai-Phong Port
Highway No.5
Example
1 Hanoi Hai Phong Hai Phong XX XX Canon
2 Hanoi Local Hai Phong Hai Phong XX XX TOTO
3 Hanoi Local Hai Phong XX X Vietnam Float Glass
4 Hanoi Computer Com Yabashi
5 Hanoi Noi Bai Hai Phong X X Sumitomo Bakelite
6 Hai Phong Hai Phong Hai Phong XX As’ty
7 Hai Phong Local Hai Phong XX X San Miguel Yamamura
8 Hai Phong Local Hai Phong Hai Phong XXX (inc.local
distribution by ship)
XX Han-Viet Heavy Industry & Construction
9 Hai Phong Noi Bai Noi Bai XX ESTELL
10 Vinh Phuc Local Hai Phong X X Honda
Note: X shows frequency of use Source: Company survey
35
Segment: (c) Institutional Reforms
0
50
100
150
200
250
300
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36
Agglomeration : Canon’s effects
Canon(printer)
(Thang Long)
SANTOMAS
(Plastic Products)
(Thang Long)
Inabata Sangyo
(Plastic products)
(Nomura-Haiphong)
Parker Processing
(Surface treatment)
(Thang Long)
ABE Asian Tech
(Users’ manual)
(Thang Long)
Volex
(Power code)
(Thang Long)
Sumi-Hanel
(Writing system)
(Saidon B)
Dragon Logistics
(Transportation)
(Thang Long)
Nippo Mechatronics
(Plastic molds)
(Noi Bai)
Fuji Mold
(Plastic molds)
(Nomura-Haiphong)
Japanese HDQ
Thailand Subsidiary
37
Agglomeration :
Thang Long Industrial Park
LIST OF TENANTS IN TLIPCompany name Date of I / L Nationali
ty Land Rental
Products
1 Mitsubishi Pencil VN Co., Ltd.
29 November 2001
Japan 3.8 Writing implements
2 Vina KDC Wiring Industries Ltd.
15 January 2001
Japan 0.48 (Rental factory)
Wire harness & power supply cord
C3 Parker Processing VN Co., Ltd
8 August 2001
Japan 2.31 Paint & Surface treatment parts
C4 Volex Cable Assembly(VN) Co.,Ltd
9 August 2001
Singapore
0.47(Rental factory)
Power supply cord, Interconnectors
C5 Canon VN Co., Ltd.
11 April 2001 Japan 20 Ink jet printers
38
Agglomeration (continued)
LIST OF TENANTS IN TLIP18 Seed VN Co., Ltd 30 August
2002Japan 0.60
(Rental factory)
Manufacturing and sale of stationery products
19 Hanoi Steel Center Co., Ltd
16 September 2002
Japan 1.89 Processing steel sheet
20 Toho VN Co., Ltd 9 October 2002
Japan 1.36 Design and manufacturing mold for plastic product
21 Kayaba VN Co., Ltd 22 October 2002
Japan 0.56 Manufacuture and sales of part and components for automobile and motorcycle
22 HAV VN Co., Ltd 17 December 2002
Japan 1.97 Production and sales of all types of aluminum castings and casting molds
TOTAL 61.19ha Note: C3, C4 and C9-13 provide parts and components to Canon. Source: Sumitomo Corporation, June 2002.
39
Agglomeration : A List of Tenants
and Nomura Haiphong Industrial Zone (as of April 22, 2003)Company District Products Date of Investment
permit
Vietphong Garment & Textile Co., Ltd. Hong Kong Capital
Standard Factory B - 2nd.3rd floors
ladies’ knitwears
March 28, 2002
R&T manufacturing VN Co., Ltd. Hong Kong Capital
Standard Factory A-2nd floor + Na-16 (1ha)
Textile.sewingknitwears
April 16, 2002
BT Garment Co., Ltd. Hong Kong Capital
Standard Factory A-4th floor
Textile. Sewing knitwears
August 23, 2002
Office ExpressManufacturing Co., Ltd.Hong Kong Capital
Standard FactoryB- 1st floor
staples (ring file)
January 8, 2002
Taiwan Fong Tai Paper Co.,Ltd. Taiwan Capital
F-12b (0.5ha)
corrugated cartons, package materials
Febrary 1, 2002
40
Sequence 3: The electronics industry cluster in northern Vietnam
(Unit: million $: 1$=100\)Year ODA
Highway Route 5 1993, 1995 2.10
Haiphong Port 1995, 1999 1.73
Thanglong Industrial Park 1997 Nomura Haiphong Industrial Zone 1997
Institutional Reform 1999 2.00
Canon 2001 Total amount
5.83 100 suppliers 2008
30 thousand employees
41
1. We found the effects of Canon on the industrial cluster policy in the case of the electronics industry cluster in northern Vietnam. GDP of TLIP = 23%, 80 firms,Labor = 40,000 (2007)
2. We made it clear that ODA played a crucial role in succeeding industrial cluster policy.
41
Conclusion:
43
(1) Detroit in East Asia:
Thailand: Mitsubishi Motors as an Anchor Firm in the cluster of Eastern Sea Board Region:
420 ha and 10 years:the number of the newly employed is about 30 thousands.
44
Sequence 4: Loan contract agreement
Loan completion Loan executed executed
Water/Aqueduct Project 7/1982 4/1987 36.06 36.06
Leamchabang Port 9/1984 6/1993 31.7811/1986 11/1993 48.422/1990 9/1995 58.6810/1985 10/1992 25.769/1987 9/1992 19.89 184.53
Leamchabang Industrial Estate
10/1985 10/1992 25.76
9/1987 9/1992 19.89 45.65
Railway Projects Siracha/Leamchabang 9/1988 7/1996 9.2 Sattahip/Maptaphut 9/1988 1/1997 28.26 Khlong19/Kengkoi 2/1990 12/1999 72.98 110.44
Road Projects Chonburi/Pattaya 11/1988 3/1994 40.74 Bangkok/Chonburi 12/1990 4/1993 134.35 Outer Bangkok Ring 12/1990 4/1993 128.28 303.37
680.05 Mitsubishi Motors (Thailand)
Established in 1990
4545
4. The Asian Model:Flowchart Approach:
Practical
46
1. Segments: roads, port, airport, institutions
2. Flowchart Approach : the economies of sequence
3. Leadership: The government, An anchor
firm
Conclusion:
In other words,
•The segments = The investment environment•Sequence = Prioritization•Leader = Human resource
47
4848
Figure 2-1. Flowchart Approach: Sequence Prioritization: An example
Source: A. Kuchiki and J. Kabir
Industrial ZoneLocal gov. Central gov. Semi-gov. NPOs Private companies Local gov. Central gov. Semi-gov. NPOs Private companies
○ ○ 1 1
(1) Infrastructure: WaterLocal gov. Central gov. Semi-gov. NPOs Private companies
○ 2
Infrastructure: ElectricityLocal gov. Central gov. Semi-gov. NPOs Private companies
○ ○ 2 1
Infrastructure: CommunicationLocal gov. Central gov. Semi-gov. NPOs Private companies
○ 2
Infrastructure: TransportLocal gov. Central gov. Semi-gov. NPOs Private companies
○ 3
(2) InstitutionsLocal gov. Central gov. Semi-gov. NPOs Private companies
○ ○ 4 2
(3) Human resourcesLocal gov. Central gov. Semi-gov. NPOs Private companies
○ 2
(4) Living conditionsLocal gov. Central gov. Semi-gov. NPOs Private companies
○ 1Anchor firms
Find actors
Find actors
Find actors
Find actors
Find actors
Find actors
Find actors
Find actors
Priority of actors to bottlenecks
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Return (after finding actors)
Return
Return
Return
Return
Return
Return
Return
Return
Return
Return
Return
Return Return
No
Return
No
Return
Table 1.Industrialization policies in East Asia
ProtectionManage- Capital policy
ment goods required/ notrequired
J apan 1945- Domestic Domestic Domestic Domestic Domestic Required(LCG) 60 ForeignKorea 1972- Domestic Domestic Domestic Foreign Foreign Required(LCG) 77China 1992- Domestic Domestic Foreign Foreign Foreign Required(Industrial Foreignpolicy)Taiwan 1960- Domestic Domestic Domestic Domestic Domestic Required (SME) 70 (EPZ) 1965- Foreign Foreign Foreign Foreign Foreign Not
70 RequiredChina 1984- Foreign Foreign Foreign Foreign Foreign Not(Economic Requireddepelopment zone)Malaysia 1986- Foreign Foreign Foreign Foreign Foreign Not(FTZ) Required
FTZ:Free trade zoneEPZ:Export processing zoneSME:Small- size and medium-size enterpriseLCG:Large enterpriseSource: Prepared by the author.
PartsPeriod Capital Technology
(3) Anchor firms
1. Firms with high Backward linkage (e.g. Toyota, Nissan) i. Automobile = more than 20,000 parts ii. Electronics (ink-jet printers)= 800 parts
2. Trading corporations (eg. Mitsubishi corporation) bring customers (tenants).
3. Companies in the neighboring counties = lower entry costs: South African firms or other firms
50
A sample:
Flowchart Players (candidates?)
Industrial zone Trading corporations
Infrastructure
Human Resource
Living condition
JICA
JETRO
Trading corporations
Anchor firms Targeting (candidates?)1. Trading corporation
2. Toyota
3. Nissan
4. Local firms
Capacity
building
Candidates:
Iran: next target:Competitors: India, Indonesia, South Africa:Global competition
52
Conclusion:Conclusion:
The Asian Model:Flowchart approach:
(1)(1)Segment Building =Segment Building = the environment of investmentthe environment of investment
(2) The economies of sequence(2) The economies of sequence
(3) Leadership(3) Leadership
Appendix 1:Worksheets!!!
1. Ask ten professionals as you did and fill out “Worksheet 1”.
2. Compile “Worksheet 2” again as you did in FY2008.
3. Find the candidates of anchor firms.
Just do it!54
Candidates of respondents :1. Local government2. Central government3. Research institute4. Research institute5. ODA organization: JICA, JETRO, UNDP, ADB, World Bank6. Researchers of Universities7. Private companies including trading corporations8. NGOs, Others
Let’s apply it to our cases!55
56
Table 1. Questionnaires on industrial cluster policy: Dalat: Agri.
1 2 3 4 5 6 7 8 9 10Results Problems
1. Does industrial zones exist sufficiently?
O O O O O O O O O O 10
Capacity building: Physical infrastructure
2. Does transport infrastructure exist sufficiently?
X X X X X X X X X X 0X
3. Does electricity infrastructure exist sufficiently?
X X X X X X X O O O 3X
4. Does communication infrastructure exist sufficiently?
O O O O O O O X O X 8
5. Does port infrastructure exist sufficiently?
X X O O X X X X X X 2X
6. Do institutions exist sufficiently? X X X X X X X X X X 0XHuman resources 6. Unskilled labor X X X X X X X X X X 0X7. Skilled labor X X O O O O O O O O 8 Living conditions 8. Do hospitals exist sufficiently? O O X X O O X O O X 6 9. Do schools exist sufficiently? O O O O O O O O O O 10 10. Do entertainments exist sufficiently?
O O X X X X X O O O 5X
Source: A. Kuchiki and T. Gokan (interviews in Hanoi on Aug. 28-30, 2008)
57
Figure 1. Nortern Vietnam's FlowchartFlowchart
Prescritions
Roads → ① . Highway 5 for Automobiles
↓Yes No② . Highway to link Hanoi and soutern China③ . Highway to link Noibai Airport and the center of Hanoi
↙Return
Electricity
→ Increase of power supply → Build-Operation-Transfer, Official Development Assistance
↓Yes No↙Return
Ports → Upgrade of Haiphong Port↓Yes No
↙Return
Institutions
→ Customs clearance → ① . The simplification of paper procedures
↓Yes No② . The simplification of exchange in container trucks at the border
↙Return
Unskilled labor
→ Employment of labor from rural area → The end of this flowchart
↓Yes NoNo
↙Return
Entertainments
→ Facilitation of entertainments → Private companies
↓Yes No↙Return
Thefts → Ethical education
Worksheet 2: Find players!
Flowchart Players (candidates?)
Industrial zone JICA, Trading corporations
Infrastructure
Human Resource
Living condition
JICA
JETRO, JICATrading corporations
Anchor firms Targeting (candidates?)
1. Mitsubishi corporation
2. Toyota
3. Vietnamese firms
4. Other Asian firms
Capacity
building
Work 3: Find the candidates of anchor firms!
Examples:1. Firms with high Backward linkage (eg. Toyota, Tata)
i. Automobile = more than 200,000 parts
ii. Electronics (ink-jet printers)= 800 parts
2. Trading corporations (eg. Mitsubishi corporation) bring customers (tenants).
3. Companies in the neighboring counties = lower entry costs: Vietnamese firms, Other Asian firms
59
Appendix 2Definition:
Economies of Sequence
The order of A: { s1→s2→s3 }
Thank you very much for your attention!
References:Kuchiki, A . & M. Tsuji (2004) Industrial clusters in Asia, Palgrave Macmillan. Kuchiki, A & M. Tsuji (2008) Flowchart approach to industrial cluster policy, Palgrave Macmillan. Kuchiki, A & M. Tsuji (2010) From agglomeration to innovation, Palgrave Macmillan. Kuchiki A. and M. Tsuji eds. (2011) Industrial Clusters, Upgrading and Innovation in East Asia, Cheltenham: Edward Elgar.
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KUCHIKI AkifumiKUCHIKI AkifumiNihonNihon UniversityUniversity
Production function of a cluster
The production cost: YA , YB
Total cost of period i to implement sk: Ci ( sk ) ( k=1 , 2 , 3 ; i=1 , 2 , 3 )
YB<YA