Internet Integration for Manufacturing Upgrading in China
Internet, competitive advantage and
manufacturing upgrading
(Work in progress)
Hesong Yang
University of Illinois at Urbana-Champaign
Yabin Bian
Shandong University of Finance and Economics
Introduction
•
Background Information
Potential problems with the high rate of economic growth from the perspective of
industrial chain
In recent years, manufacturing growth is slowing more quickly than overall
economic growth
Industrial policy from Central Government in Beijing, searching new growth point
Sophistication of consumer’s demand
•
Research questions
How manufacturing firms can reinvent their competitive advantages in the
upstream, midstream and downstream of industry chain through Internet
integration?
With new competitive edges, how these firms can realize the growth and
redistribution of value-added products?
How ‘Smiling Curve’ would respond to this process?
Literature Search
The situation of China’s economic conditions and
Industrial Policy from central government
‘Smiling Curve’ Theory – manufacturing upgrading
Criticism about ‘Smiling Curve’ Theory
Impact of technological change on behaviors of both
firm and consumer
Cases of some pioneer
companies that introduce the
concept of Industrial Internet
Key components
Internet
Competitive advantage
Value-added product
Modification of ‘Smiling Curve’
Internet plus
Source: http://english. gov.cn/2016special/internetplus/
Competitive Advantage
Smiling Curve
Modification of Smiling Curve
•
Assumptions:
Internet encourages enterprises to form new competitive
edges with the external ideas from their customers
New competitive advantages can increase Value-added
product
They can also change the distribution pattern of VAP
The change of both growth and distribution patterns of
VAP could promote industrial upgrading process in
China
Modification of Smiling Curve
Mechanism that drives this modification
Inspiration: law of Communicating Vessel in Physics
Next Steps
Choose specific industry and companies
in
manufacturing field
Learn more in depth about how this policy is implemented in
this industry
Data and indicator system
Model
Econometric analysis
Modify theory
Works Cited
•
Beal. D & E. R . Sabater.
（
2015
）
.
Why Well-being Should Drive
Growth Strategies. BCG.
•
Collier , P & J . Page.
（
2011
）
.
Industrial Development Report
2009. UNIDO.
•
Eloot , K., Huang, A., Lehnich, M. (2013). A new era for
manufacturing in China. Mckinsey Company.
•
McKinsey Global Institute.
（
1998).
Big Data-The Next Frontier
For Innovation, Competition And Productivity. Mckinsey
Company.
•
Porter , M.
（
2015
）
.
How Smart, Connected Products Are
Transforming Competition. Harvard Business Review.
This work explores how manufacturing firms in China can leverage internet integration to reinvent competitive advantages in the industrial chain. It discusses the impact of internet technology on firm behaviors, value-added product distribution, and the Smiling Curve theory. The study delves into key components such as competitive advantage and value-added product modification, aiming to promote industrial upgrading and growth.
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Presentation Transcript
Internet, competitive advantage and manufacturing upgrading (Work in progress) Hesong Yang University of Illinois at Urbana-Champaign Yabin Bian Shandong University of Finance and Economics
Introduction Background Information Potential problems with the high rate of economic growth from the perspective of industrial chain In recent years, manufacturing growth is slowing more quickly than overall economic growth Industrial policy from Central Government in Beijing, searching new growth point Sophistication of consumer s demand Research questions How manufacturing firms can reinvent their competitive advantages in the upstream, midstream and downstream of industry chain through Internet integration? With new competitive edges, how these firms can realize the growth and redistribution of value-added products? How Smiling Curve would respond to this process?
Literature Search The situation of China s economic conditions and Industrial Policy from central government Smiling Curve Theory manufacturing upgrading Criticism about Smiling Curve Theory Impact of technological change on behaviors of both firm and consumer Cases of some pioneer companies that introduce the concept of Industrial Internet
Key components Internet Competitive advantage Value-added product Modification of Smiling Curve
Internet plus Source: http://english. gov.cn/2016special/internetplus/
Modification of Smiling Curve Assumptions: Internet encourages enterprises to form new competitive edges with the external ideas from their customers New competitive advantages can increase Value-added product They can also change the distribution pattern of VAP The change of both growth and distribution patterns of VAP could promote industrial upgrading process in China
Next Steps Choose specific industry and companies in manufacturing field Learn more in depth about how this policy is implemented in this industry Data and indicator system Model Econometric analysis Modify theory
Works Cited Beal. D & E. R . Sabater. 2015 . Why Well-being Should Drive Growth Strategies. BCG. Collier , P & J . Page. 2011 . Industrial Development Report 2009. UNIDO. Eloot , K., Huang, A., Lehnich, M. (2013). A new era for manufacturing in China. Mckinsey Company. McKinsey Global Institute. 1998). Big Data-The Next Frontier For Innovation, Competition And Productivity. Mckinsey Company. Porter , M. 2015 . How Smart, Connected Products Are Transforming Competition. Harvard Business Review.
