It is a daunting task to build institution and infrastructure over a short time period in developing countries. But in the absence of sound institutions and adequate infrastructure, it is difficult for economic transformation to take place. An alternative is to facilitate existing industrial clusters or build industrial parks by creating an enabling environment in a limited place. This paper reviews the commonly used strategies to build effective clusters and industrial parks. Clusters and industrial parks are location specific. Because they have an informational advantage, local governments are in a better position than the central government to identify and solve the bottlenecks that affect clusters and industrial parks. As clusters and industrial parks evolve, new bottlenecks emerge, thereby requiring new solutions. This in turns calls for continuous tinkering by local governments. It is important to place local governments and business communities in the driver’s seat of local economic growth so that they can watch out for and adjust to the bumps in the road ahead.

This book reveals fascinating insights into the two remarkable engines fueling China's economic success: special economic zones (SEZs) and industrial clusters. Douglas Zeng provides an excellent overview of China's SEZs and clusters, their background, success factors, challenges, and possible solutions. The five well-written case studies delve into the rich detail of the evolution and success of SEZs and clusters in key growth regions of China. The views on the distinctions and convergence of SEZs and clusters are fresh and in-depth. As China celebrates the 30th anniversary of its SEZ policy, the publication of this book could not have been more timely. With growing interest in China's experience, this book is a must-read for policy makers, development practitioners, business leaders, and scholars worldwide who are eager to learn from China's success.---Eric Roll Hansen President of Economic Transformations Group, Inc. China's economic rise continues to amaze. This book provides important new insights into two dimensions that, when combined, are emblematic of the nature of China's economic transformation. The creation of special economic zones (SEZs) has been a core element of the government's strategy to drive growth through a process of selective reforms in specific regions. The emergence of clusters has been a market-driven response to the new opportunities opening up in China. The case studies in this book suggest that Chinese SEZs and clusters have often been successful precisely because pragmatic policies allow them to become mutually reinforcing. This book will help researchers and policy makers better understand China's growth, past and current, as well as the lessons the country holds for the effective use of SEZs and clusters in organizing economic policies.---Christian Ketels Principal Associate of the Institute for Strategy and Competitiveness at Harvard Business School and Director of the Competitiveness Institute (TCI)

They are being hailed as the new Holy Grail of economic development. The success of special economic zones (SEZ) in general and specialized ones in particular (industrial and technology parks) in countries as diverse as Australia, Denmark, Sweden, Germany, Switzerland, Ireland, Japan, the United Kingdom, the United States, and more recently, China; Korea; Taiwan, China; or Mauritius, has led several African leaders to launch new similar initiatives. This paper establishes a common point of reference for those who believe in the virtues of SEZs, explains why the many existing ones have not delivered the expected outcomes, and summarizes the key issues on the agenda. It then suggests cluster-based industrial parks as the most effective tool for developing competitive industries and generating employment, and provides some practical guidance to development practitioners and policymakers on the road ahead.

Richards; 7.

This book provides a theoretical framework to explain the formation and growth of economic agglomerations and industrial clusters from the viewpoint of spatial economics, and goes on to present current examples of clustering and policy in different economies.