Bringing Innovation Home: Indigenous Development in Kunshan, China

Access to technology and expertise remains a fundamental issue in global economic integration. China has been an exception among developing economies, pursuing successful strategies for indigenous innovation in tandem with massive foreign investment in production. Among development zones, Kunshan has emerged as China’s richest county, succeeding Guangdong’s Shunde two years ago with a per capital GDP of thirty thousand U.S. dollars. Supported with extensive Taiwanese capital and technology, the county has prospered as an electronics manufacturing platform and exporter. How have they integrated into foreign knowledge circles while cultivating local expertise? This paper focuses on the local state role in mediating global capital and knowledge flows in the Development Zone of Kunshan County. Building on theories of the developmental and the entrepreneurial state, we track strategy and performance. A survey of 180 foreign-invested firms provides a profile and highlights problems for foreign investors, while the Five Year Plan of Jiangsu Province outlines Party-State technology policy. The local Party Committee oversees both foreign and local inputs, as well as planning and implementation of urban industrial development strategies. Interviews with the local Party Committee provide critical detail on industry-state relations in a development zone. Working between firm and state, we couple strategy and current R&D status, with a focus on effective patterns for indigenizing knowledge networks from abroad. We conclude with a refinement of the developmental state thesis, highlighting how a strong state can also play an entrepreneurial role in global capitalism.