Fostering the Development of Emerging Knowledge Intensive Industry in China: The role of local governmnet

Paper in proceeding, 2015

How does the local government stimulate knowledge intensive industry, within a regional innovation system? That is the research question for this paper. We analyze the development of the nanotechnology industry in Suzhou and the electrical vehicle industry in Hangzhou. They are used as cases to analyze the role of local government, and we do so from four aspects, namely technology, human capital, market and finance. In these cases, the local government helped the emerging industry not only in stimulating technological collaboration but also in creating market demand. While the local governments stimulated all four aspects listed above, the incentive to create demand has been particularly crucial.