Suzhou has been a prosperous place since ancient times, and enjoys the reputation of "a paradise above and a summer and a Hangzhou below". In the early days of the founding of New China, Suzhou's industries were waiting to be developed. In 1952, Suzhou's secondary industry accoun

Author | "Financial Think Tank" China's Real Economy Suzhou Research Group

Suzhou has been a prosperous place since ancient times, enjoying the reputation of "a paradise above and a Suzhou and Hangzhou below". In the early 6th period of the founding of New China, Suzhou's industries were waiting to be developed. In 1952, Suzhou's secondary industry accounted for only 24.8%, manufacturing enterprises were small and scattered, and the industrialization process was just beginning. Since the reform and opening up of , Suzhou's industrialization process has accelerated significantly. So far, Suzhou has formed a complete advanced manufacturing cluster, becoming a major industrial area across the country and even the world.

40 years, Suzhou has gone from the initial "agricultural transformation to work" to "internal transformation to outside", insisted on reform and innovation and internal opening up, made full use of all external resources, actively accepted the radiation from the Yangtze River Delta and Shanghai, and gradually formed an inclusive development pattern of "internal and external linkage, symbiosis and win-win". For more than 40 years, Suzhou's manufacturing industry has taken meeting domestic and foreign demands and transformed and upgraded as the driving force, and has taken industrial clustering and "specialization and innovation" in subdivided fields as a breakthrough point, continuously optimized the industrial structure, promoted intelligent manufacturing and industrial chain clustering and high-end. Today, Suzhou has 160,000 industrial enterprises, covering 35 major industrial categories, 171 medium industrial categories and 505 minor industrial categories, making it one of the cities with the most complete industrial system in my country. In 2021, Suzhou City's total industrial output value of 4.2 trillion yuan will reach 4.2 trillion yuan, ranking second in the country (only 3.3 billion yuan lower than Shenzhen). Among them, the four major industrial clusters of electronic information, equipment manufacturing, biomedicine, and advanced materials have already been at the forefront of the country. At the same time, Suzhou adheres to the concept that green waters and green mountains are gold and silver mountains, actively promotes industrial-city integration and green industrial transformation, and has achieved outstanding results in the harmonious development of economy, society and nature. The construction of a modern industrial system has entered the forefront of the world, garden-style cities have become more beautiful, and beautiful cities have reached a new level.

01 Three stages of Suzhou's manufacturing development since the reform and opening up

1. 1978-1992, " Southern Jiangsu Model " promoted the rapid start of manufacturing

At the beginning of reform and opening up, Suzhou put the development of township enterprises in an important position, give full play to the important role of township governments in the development of enterprises, and formed the "Southern Jiangsu Model" of "the government actively participates, first industrialization and then marketization". Bathed in the spring breeze of reform and opening up, Suzhou, on the one hand, comprehensively rectified and improved the existing community enterprises (i.e., the industry founded during the People's Commune after the founding of the People's Commune, which was renamed township enterprises after 1984), and actively explored and implemented reforms in the business management model, so that the business management of township enterprises gradually embarked on the track of standardization and institutionalization. On the other hand, make full use of favorable location advantages, vigorously establish new enterprises, organize horizontal alliances with great fanfare, and achieve leapfrog development of township enterprises. The targets of Suzhou's joint development include large enterprises in Shanghai and other places, county-owned enterprises in local towns, scientific research institutions in local colleges and universities, and even "third-tier" enterprises in other provinces and cities. After 10 years of great development, by 1988, the number of township enterprises in Suzhou had exceeded 15,000, the total number of employees exceeded 1.2 million, and the total industrial output value reached 23.86 billion yuan, accounting for nearly 1/2 of the city's total industrial output value. Township enterprises have become the "half of the land" of Suzhou's industrial economy. By 1991, the total industrial output value of township enterprises reached 45.01 billion yuan, about double the increase from 1988.

2.1992-2012, the outward-oriented "Suzhou model" leads the manufacturing industry to continue to leap over

Taking the opportunity of the country's promotion of Pudong's development and opening up and Deng Xiaoping's speech in the southern tour in 1992, Suzhou relies on the huge processing and production capacity formed by the rise of township industries, and proposed the "from five lakes and four seas to five continents and four oceans" strategy. Foreign trade, foreign investment, and foreign economic "three foreign countries are flying together", cooperation, joint ventures, and sole proprietorship are carried out at the same time, and development zones at all levels and types are progressing together, vigorously developing outward-oriented economy , gradually embedded in the global industrial chain, realizing the fundamental transformation of "internal to external", and forming the "Suzhou model" of outward-oriented development.In 1992, more than 2,000 new "three-investment" enterprises were approved in the city and 630 new overseas investment enterprises were approved; in 1994, China and the Singapore government jointly developed and built the Suzhou Industrial Park , fully learning from Singapore's experience, planning at a high starting point, building at a high standard, and investing at a high level, actively creating a world-class business environment, and vigorously attracting world-class enterprises to settle in and develop; all counties under Suzhou showed their magical powers, and Kunshan City "inducing Taiwan with Taiwan" and "inducing business with business", quickly became a gathering place for Taiwanese capital, and 100,000 Taiwanese businessmen and compatriots lived and worked in peace and contentment here; Taicang City carried out in-depth cooperation with Germany, becoming the first "China-Germany Small and Medium Enterprise Cooperation Demonstration Zone" in the country. In the 20 years from 1992 to 2012, Suzhou approved a total of 33,450 foreign-invested projects, and actually used foreign capital of US$101.6 billion. More than 140 Fortune 500 multinational companies in the world (border) have investment projects in Suzhou, with exports increasing from US$960 million to US$174.7 billion, imports increasing from US$220 million to US$131 billion, and export dependence increased from 14.7% to 92.27%.

External economy has driven Suzhou's manufacturing industry to achieve an upgraded transformation from labor-intensive dominance to accelerated shift to capital-intensive and technology-intensive leading in just 20 years. From 1992 to 2012, Suzhou's industrial added value increased from 20.98 billion yuan to 619.3 billion yuan, with an average annual actual growth of 15.5%, 3.3 percentage points higher than the national average. In 2012, the total output value of the large-scale communication equipment and computer and other electronic equipment manufacturing industry in Suzhou reached 980.2 billion yuan, accounting for 34.1% of the total output value of the large-scale industries. If the output value of office equipment manufacturing, pharmaceutical manufacturing, medical equipment and instrument manufacturing, information chemical manufacturing, aerospace and equipment manufacturing, etc. is added to the statistical scope of high-tech manufacturing, the proportion of high-tech manufacturing in Suzhou reached 38.6% in 2012.

3. Since 2012, "internal and external linkage + innovation cluster" has driven the high-quality development of manufacturing

2 After the 18th National Congress of the Communist Party of China, my country's economic development has shifted from high-speed growth to a new stage of high-quality development, and promoting quality, efficiency and driving force transformation of economic development have become inevitable requirements in the new stage. Suzhou has leveraged its advantages of high development level and early transformation and upgrading, accelerated the development of the private economy of , strengthened the integration of domestic and foreign investment, deepened the pace of integration in the Yangtze River Delta, and made improving the ability of science and technology innovation as the top priority, embarking on the road of high-quality development from a "world factory" to a "innovation highland".

seized the opportunity of rapid expansion of the domestic market, and Suzhou opened a new stage of taking off and developing the private economy through "internal and external linkage". During this period, Suzhou fully utilized the spillover role of foreign-invested enterprises, supported private enterprises to accelerate transformation and upgrading in traditional industries, guided private enterprises to seize the commanding heights of the development of emerging industries, encouraged private enterprises to create brands, strengthen product quality, and promote the "match-win situation" between private and foreign capital. Suzhou also actively promotes the reform of the integrated domestic and foreign trade system, supports export products to enter the domestic market, and promotes in-depth cooperation between domestic and foreign-funded enterprises. In 2020, Suzhou's added value accounted for 51.1% of GDP, surpassing foreign capital and state-owned economy and becoming the main body in the economy.

Suzhou has invested heavily in actively building scientific and technological innovation carriers, attracting and cultivating high-end innovative talents, providing high-quality innovation services, focusing on gathering innovative elements, improving the innovation ecology, and helping the innovative development of the industrial economy. In 2021, Suzhou's research and experimental development (R&D) funds accounted for 3.9% of the regional GDP, 1.5 percentage points higher than the national average. As of the end of 2021, Suzhou has built a total of 1,193 provincial-level engineering technology research centers, 919 provincial-level enterprise technology centers, 24 provincial-level academician workstations and 78 municipal-level new R&D institutions. There are 320,000 high-level talents and 824,000 high-skilled talents. The total number of entrepreneurial talents selected for national major talent projects ranked first in the country for nine consecutive years. A large amount of innovation investment has achieved remarkable results. In 2021, there were 11,165 high-tech enterprises in Suzhou , and the output value of high-tech industry achieved a total output value of 2168.65 billion yuan, accounting for as high as 52.5% of the total output value of large-scale industries.In 2021, Suzhou won 8 National Science and Technology Awards in 2020 (persons), including 1 first prize in scientific and technological progress, 4 second prizes, and 2 second prizes in national technological inventions.

02 Domestic and foreign locations made in Suzhou

1. Suzhou is the core node of China's manufacturing industry and an important pioneer in high-quality development

Over the past 40 years of reform and opening up, Suzhou has laid a core node in the national manufacturing industry and a forward-looking forward in the transformation and upgrading of the country with its continuous upgrading industrial cluster construction and high-tech industry development.

Suzhou is the development base of many important industrial chains in the country. Suzhou's industrial system is relatively complete, and the industrial chain has strong ability to vertically integrate . It is the starting point and connection point of many industrial cycles in the Yangtze River Delta and even in China. Many sub-sectors, especially some key and basic areas, maintain a leading position in the country (Figure 1). For example, the electronic information industry has the leading domestic comprehensive manufacturing advantages in the research and development and manufacturing of integrated circuits, new displays, new generation mobile communications, sensors and other products. In 2021, there were 1,372 large-scale enterprises, achieving an industrial output value of 120.96 billion yuan above the designated size, and is in the first echelon of the country with Shenzhen and Dongguan. The total output value of the equipment manufacturing industry has exceeded 1.2 trillion yuan, of which, the operating income of general equipment manufacturing industry reached 320.1 billion yuan (2020 data), which is only slightly lower than that of Shanghai (340.3 billion yuan) among cities across the country. The scale of special equipment manufacturing industry is the highest among all cities in the country. Suzhou's equipment manufacturing industry has gathered 4,218 enterprises above designated size and 21 academicians (expert teams), introduced 20 national-level talents, built 16 national-level innovation carriers, and has already owned a number of high-end manufacturing enterprises with core technologies. The Taicang auto parts industry has gathered more than 300 well-known companies including Schaeffler, , Muber, and Hexing. The global market share of these multinational companies' automotive electronic control systems, fuel injection systems, and other has exceeded 60%.

Figure 1 Important industrial products in Suzhou occupy an important position in the country [1]

Suzhou is an important source of development of high-tech industries and emerging industries, and is a forerunner of the transformation and upgrading of China's industrial structure . Suzhou's manufacturing industry has a large proportion of high-tech industries, and its industrial structure is highly advanced. In 2020, Suzhou's computer, communications and other electronic equipment manufacturing industry had operating income of 106.97 billion yuan, accounting for 29.5% of the city's manufacturing industry, which is 18.1 percentage points higher than the national average, second only to Shenzhen and Dongguan in the country (Figure 2). In recent years, Suzhou has foreseeably laid out four leading industries: "biomedicine, new generation information technology , nanotechnology application, and artificial intelligence ", and is committed to accelerating the development of emerging industries. In 2021, the four major pilot industries achieved output value of 962.3 billion yuan, accounting for 23% of the total industrial output value above the designated size. The output value of biomedicine reached 130.5 billion yuan, and it was successfully selected as a national strategic emerging industry cluster. The comprehensive competitiveness of Suzhou Industrial Park biomedicine industry has jumped to the top in the country, and the three individual competitiveness of industry, talent and technology are ranked first in the country. The nano-new materials industry has become one of the eight largest clusters in the world and has been selected as one of the country's first batch of advanced manufacturing clusters.

Figure 2 Comparison of the operating income of major high-tech industries in Suzhou in 2020 with other industrially strong cities

Suzhou's manufacturing industry has high basic capabilities and rapid progress in intelligent transformation. It is an important innovator in the upgrading of my country's industrial chain. In recent years, Suzhou has focused on the "five basic" fields such as core basic components (components), key basic materials, advanced basic processes, industrial technology basics and industrial basic software, and has implemented 17 national industrial base reconstruction and industrial foundation strengthening projects. In recent years, Innovent Biologics' PD-1/PD-L1 monoclonal antibody drugs, Hengtong's submarine optical cable , Sudaweig's micro-nano lithography, and Navi's large-size gallium nitride substrates have been the first to break the monopoly of the foreign market. Suzhou vigorously carries out digital transformation and upgrading projects to promote the in-depth application of digital technology and intelligent technology in the manufacturing industry. The city has obtained a total of 26 national intelligent manufacturing and industrial Internet pilot demonstration projects, 26 industrial Internet benchmark factories, and 503 provincial demonstration intelligent workshops (as of early January 2021) (Figure 3).In 2021, Suzhou has 3 national-level intelligent manufacturing demonstration factories, 13 provincial-level intelligent factories, and 5 "lighthouse factories" around the world, accounting for about one-seventh of the country's number.

Figure 3 Suzhou’s intelligent transformation results, data source: Draw

2 according to reports. Suzhou's manufacturing industry is in the global value chain.

1) Compared with other countries with similar population sizes, Suzhou's manufacturing industry is in the leading position.

Suzhou's permanent population is about 13 million, with a per capita GDP of 178,200 yuan in 2021, a discount of US$27,600. Although Suzhou is only a city within a country and is not suitable for direct comparison of manufacturing development with other countries, from a global perspective, economies of similar scale still have certain similarities and comparables in many aspects. In 2019, Suzhou's industrial added value was 831.95 billion yuan, of which the added value of manufacturing was about 813 billion yuan, which was about 117.7 billion US dollars based on the average exchange rate of that year. Among the more than 200 economies around the world, we focused on selecting 20 economies with a per capita GDP of between 10,000 and 70,000 US dollars in 2019 and a population size of less than 5-32 million, focusing on comparing the size of the manufacturing industry, as shown in Figure 4. Among economies with a population of about 10 million, there are Hungary, Greek , Portugal and Czech , which have lower development levels than Suzhou, as well as the UAE, Israel, Belgium, Sweden , Austria, and Netherlands (the per capita GDP in 2019 was higher than US$40,000). Compared with these economies, Suzhou's manufacturing added value in 2019 was about US$120 billion, not only higher than Sweden (population 10.28 million, manufacturing added value of US$68.4 billion) and Austria (population 8.88 million, manufacturing added value of US$73.6 billion), but also higher than the Netherlands (population 17 million, manufacturing added value of US$98.1 billion), and even higher than the larger population of Malaysia and Australia (both about US$78.2 billion).

Figure 4 Comparison of the manufacturing scale of Suzhou and other economies (the size of bubbles represents the added value scale), data source: World Bank and Suzhou Bureau of Statistics

2) From the perspective of the internal industrial structure of the manufacturing industry, Suzhou is at a better level in the world

An important part of improving the position of the value chain is the transformation from labor-intensive to capital-intensive and technology-intensive. Generally speaking, in the early stages of development, due to the lack of capital and technology, late-developed countries usually first develop labor-intensive industry . However, due to sufficient supply, labor-intensive industries face the most fierce competition and have the lowest added value level. Therefore, when they reach a certain stage of development, they must transform to capital-intensive industry and technology-intensive industry .

From the perspective of global economies, the proportion of high-tech and high-tech manufacturing in various countries is relatively different (part of which is related to the definition of high-tech industries, such as The electronic information industry of in developing countries actually belongs to the low-value-added OEM or assembly process). For example, the proportion of Southeast Asian countries such as India and Vietnam is about 40%, while Greece, Portugal and Australia, which have higher development levels, is only about 20%. However, from the perspective of major manufacturing countries, the proportion of medium and high-tech and high-tech industries generally shows a trend of significantly increasing with the development of per capita GDP. For example, Japan, South Korea and Germany are all above 50%. In 2020, the sales output value of Suzhou's manufacturing industry was 3.38 trillion yuan, of which low-tech, medium-tech, medium-high-tech and high-tech manufacturing industries were 4475, 5683 and 23613 billion yuan, respectively, of which medium-high-tech and high-tech manufacturing industries accounted for 69.9%, which is only lower than Singapore among major countries. This shows that from the perspective of the internal industrial structure of the manufacturing industry, Suzhou is already at a good level.

Figure 5 Suzhou and other economies have a proportion of medium and high-tech industries. Data source: United Nations Organization for Industry and Development and Suzhou Statistics Bureau. Note: Classification of medium and high-tech industries is based on the standards of the United Nations Organization for Industry and Development [2]

3) From the perspective of the international competitiveness of industries, Suzhou is also at a higher level. In the international economy, explicit comparative advantages, export proportion, price level, etc. are commonly used in the international economy to compare the international competitiveness of industries. As a domestic region, it is difficult to compare international competitiveness. This is because there is a division of labor between regions in China. For example, some inland areas may not have international trade , which mainly trades with other domestic regions, but this does not mean that international competitiveness is very low. But considering that Suzhou is a frontier city in foreign trade, we still use the most commonly used indicator, and the proportion of exports to output (total output value) for a rough comparison. A comparison of three types of manufacturing industries, low technology, medium technology, medium and high technology, was also conducted.

Figure 6 Comparison of Suzhou's export dependence in high-tech industries with other countries. Note: Export dependence refers to the ratio of the total export value of the industry to the total output value. Data source: United Nations Organization for Industry and Development Database and Suzhou Statistics Bureau

In 2020, the export dependence of Suzhou's medium-high and high-tech manufacturing industries was 49.3%, similar to South Korea, the United Kingdom, Italy and Germany, and at a relatively high level (the dependence of medium-high-tech and high-tech exports in South Korea, the United Kingdom, Italy and Germany in 2019 were 44.8%, 46.5%, 46.9% and 50.2% respectively), which was significantly higher than the levels of Singapore, the United States and Canada. This shows that compared with the manufacturing power, Suzhou's international competitiveness in medium and high-tech and high-tech manufacturing is at a relatively high level.

4) Compared with other countries, Suzhou's per capita manufacturing added value is at a low level

Per capita industrial added value is a comprehensive indicator reflecting the manufacturing value creation ability of various countries. If a country is at the high end of the global value chain, the per capita added value will inevitably be higher. In 2019, there were about 2.669 million manufacturing employees among large-scale industrial enterprises in Suzhou, and the per capita manufacturing added value was about 44,000 US dollars per person. This figure is significantly higher than the national average of China that year (US$36,600 per person), but compared with other countries, this figure is at a lower level. For example, Greece's per capita GDP in 2019 was US$19,100, significantly lower than Suzhou's US$27,600, but Greece's per capita manufacturing value was US$45,000 per person, which was slightly higher than Suzhou. Among other developed countries, the per capita manufacturing added value of the UK in 2019 was US$87,000, France was US$92,000, Japan was US$125,000, South Korea was US$167,000, and the United States reached US$222,000. Compared with these developed countries, Suzhou has a significant gap in manufacturing production efficiency.

Figure 7 Suzhou compares manufacturing productivity with other countries, source: United Nations Organization for Industry and Development data

Overall, compared with major international developed economies, Suzhou's manufacturing industry has a relatively advanced industrial structure, and the proportion of medium and high-tech manufacturing is at a relatively high level in the world. The export proportion of medium and high-tech and high-tech manufacturing industries is relatively large, indicating that its international competitiveness is also strong. Especially compared with economies with similar population sizes, Suzhou's manufacturing industry is significantly larger than that of other countries, indicating that Suzhou's manufacturing industry is strong in overall strength and its industrial structure is also relatively high-end, but the per capita added value of Suzhou's manufacturing industry is significantly lower than that of other countries. The main task of industrial upgrading in the future is to further improve production efficiency, especially to upgrade to high-value-added links within high-tech industries.

03 The distinctive characteristics of Suzhou manufacturing

As an important core of the Yangtze River Delta and a leading city in the country, Suzhou has formed its own distinctive characteristics compared with other regions or cities in the country during the development of the reform and opening up over the past 40 years (in this regard, we mainly compare Suzhou and cities that are both manufacturing cities, but are not municipalities or provincial capitals - Shenzhen, Wuxi , Ningbo , Qingdao and Foshan for comparative analysis).

1. Foreign capital and domestic capital symbiosis and win-win

Suzhou is a typical example of my country making full use of the wave of globalization and China's accession to the WTO, integrating into the global industrial chain in all aspects and large-scale, and achieving leapfrog development based on an extroverted economy dominated by foreign trade processing. Suzhou was once regarded as the "world factory". Due to the withdrawal of a few foreign capital, it was once questioned that the industry was hollowed out into . To this day, there is still the view that "Suzhou has nothing to do without foreign capital." However, through research, it can be concluded that since the 2008 financial crisis, under the combined guidance of the market's "invisible hand" and the government's "visible hand", Suzhou's endogenous driving force has been continuously strengthened, and Suzhou's industrial structure has formed a pattern of internal and external linkage, and domestic and foreign capital symbiosis and win-win situations.

Suzhou's private economy has accounted for half of the land. In terms of enterprise types, Suzhou's private economy accounted for 51.1% of GDP in 2020, more than ten percentage points lower than Wuxi, Ningbo and Foshan (the proportion of the three cities was 65.8%, 65.1% and 62.8% respectively), similar to Qingdao (53.5% in 2013), and higher than Shenzhen (43.8% in 2018). In 2021, the private economy completed private investment of 339.3 billion yuan, accounting for 660% of the city's fixed asset investment, private enterprises contributed more than 60%, the total number of employment absorbed exceeded 80%, and private high-tech enterprises accounted for more than 85% of the total number of high-tech enterprises in the city. Suzhou has 23 top 500 private manufacturing enterprises in the country, ranking second in the country. The important position of the private economy in economic and social development, entrepreneurship and employment, technological innovation, tax contribution and employment absorption is highlighted, which also shows that Suzhou has achieved remarkable results in vigorously promoting the development of the private economy in recent years.

Table 1 Comparison of the proportion of added value of the private economy to the total economic volume

Note: 1. The data comes from the official release of statistical bulletins of each city and other channels [3].

2. Due to the suspension of the private economic statement system in Guangdong Province in 2020, Foshan and Shenzhen only had data before 2020.

3. Qingdao has not released this data since 2013. You can refer to the "Qingdao's "14th Five-Year Plan" Private Economy and Small and Medium Enterprises Development Plan" released in September 2021: By 2025, the added value of Qingdao's private economy will reach more than 50%, and it can be considered that Qingdao's current private economy accounts for less than half of the total economic volume.

Despite this, Suzhou's characteristics of being dominated by an outward-oriented economy are still very prominent, and foreign capital still plays an important supporting and leading role in Suzhou's manufacturing industry. As of the end of 2021, Suzhou has used more than US$140 billion in foreign capital, of which 68.6% of the manufacturing industry is currently in Suzhou. There are currently 17,000 foreign companies, including more than 9,000 manufacturing industries. The industries that use foreign capital in the manufacturing industry mainly include communications, electrical machinery, equipment manufacturing, and chemical industry; the main countries come from Hong Kong, Japan, Singapore, the United States, etc. Kunshan , industrial parks, high-tech zones, Taicang and other sectors, foreign capital accounts for more than 50% of the total industrial output value above the designated size. Since 2016, the total amount of foreign investment has shown a downward trend year by year, but the proportion of technology-intensive industries such as automobile manufacturing and pharmaceutical manufacturing has expanded year by year.

Suzhou has quickly improved the level of manufacturing and established a solid manufacturing foundation through the implementation of foreign capital. This is a certain difference from the Pearl River Delta manufacturing industry represented by Foshan, which has grown up all the way through private economy.

Although foreign capital in Suzhou was a typical "two-end" model, foreign capital still brought a lot of positive externalities to Suzhou's development.Through the investigation, it can be concluded that foreign capital mainly produces spillover effects on Suzhou's local manufacturing industry through the following channels: First, it drives more local enterprises to provide supporting services to foreign-invested enterprises, such as Kunshan electronic information industry cluster, which improves its basic production and manufacturing capabilities; Second, many entrepreneurs from foreign-invested enterprises started their businesses in Suzhou, bringing foreign capital's relatively advanced technical level, business philosophy and management model to Suzhou's private economic circle; Third, foreign capital and Hong Kong, Macao and Taiwan-invested enterprises to transfer local manufacturing industries to local manufacturing industries; Third, foreign capital and Hong Kong, Macao and Taiwan-invested enterprises to the local manufacturing industry , such as Bosch, Wistron , , AUO Optoelectronics and other output solutions and management experience, provide Suzhou enterprises with professional digital transformation services; fourth, in terms of institutional innovations such as government governance and opening up to the outside world, it will give Suzhou a reference, such as Kunshan opens the door to foreign investment introduction, that is, the experience from Taiwan capital; the concept of a service-oriented government is inseparable from the experience of jointly building an industrial park with Singapore.

It can be said that foreign capital has laid a software and hardware foundation for the rise of Suzhou's private economy. At the same time, the development of private enterprises has also provided important support for foreign-funded enterprises to enhance their competitiveness. Suzhou private enterprises have already reached the international advanced level in some key areas, and more and more foreign-funded enterprises have developed and produced products and technologies locally in the international market. Private enterprise Huguang Automobile has provided high and low voltage wiring harness assembly for German Volkswagen, Daimler-Benz and other companies; Beckman Coulter Biotechnology (Suzhou) Co., Ltd., a subsidiary of Danaher , launched flow cytometer , which is a local R&D and manufacturing.

Figure 8 The development stage of Suzhou's investment promotion, source: Shen Ning "Research on the current situation, problems and countermeasures of the use of foreign direct investment in Suzhou" (2022)

Figure 9 Suzhou actually uses foreign capital (unit 100 million US dollars), data source: Suzhou's annual statistical yearbook and other official releases, etc.

2. Traditional industries and emerging industries are coordinated to advance together. In order to cope with the risks of rising costs of production factors, shortage of resources, environmental capacity constraints, and labor-intensive industries being evacuated due to decline in competitiveness, various parts of the country are pursuing emerging industries and not paying enough attention to traditional industries. However, traditional industries are not synonymous with backward production capacity. Suzhou has achieved a good balance in the development of traditional industries towards high-end development and cultivating emerging industries.

Suzhou's traditional advantageous industries such as steel, chemicals, and textiles break the original development model and path, and shift from factor driving to innovation-driven, transforming to advanced steel materials, advanced polymer materials, high-end textile materials, high-end equipment, etc., and continuously improve the overall level and competitiveness. The government strongly supports traditional industries. For example, under the pressure of environmental protection and energy consumption indicators, Zhangjiagang still makes every effort to ensure the construction of Shagang Group's project. Shagang has also achieved innovation-driven development through active transformation, breaking people's inherent impression of "traditional industries". The independently developed new material products such as salt bath line bridge cable steel, ultra-thin belt structural steel, ultra-thin belt high-strength steel and other new material products have filled the domestic gap.

At the same time, Suzhou actively promotes the intelligent transformation of traditional industries and the transformation to service-oriented manufacturing . Focusing on the problems of enterprises not daring to transfer solutions, not being able to transfer technology, not being able to transfer data, not being willing to transfer funds, through free diagnosis, technology output, platform empowerment, interest subsidy and other measures, we will create a full-process service ecosystem to help enterprises transform.

In order to optimize the industrial layout and improve the industrial level, Suzhou has actively cultivated and developed emerging industries including biomedicine, advanced materials, new energy, artificial intelligence and other emerging industries, and has now achieved considerable results. For example, after more than ten years of deep cultivation and development, the biopharmaceutical industry has now become Suzhou's advantageous and characteristic industry. As of the end of 2021, Suzhou added 11 new listed companies in the biopharmaceutical field and 6 new innovative drugs that year, all of which ranked among the top in the country. The industrial output value above the scale of the biopharmaceutical industry is expected to exceed 200 billion yuan in 2021.

Traditional industries and emerging industries should be a relationship between inheritance and iteration, rather than replaced. The cross-border link between traditional industries and emerging industries can also generate new momentum. It is precisely because of the manufacturing foundation accumulated in Suzhou that these emerging industries have become possible to take root and thrive. For example, the development of the biopharmaceutical industry relies on Suzhou's fine chemical industry foundation, and the development of high-end medical devices relies on Suzhou's lean production capacity. The development of new energy industries such as hydrogen energy and lithium batteries cannot be separated from the deep accumulation in the fields of steel and chemical industry.

Figure 10 A list of policies for cultivating some emerging industries and pilot industries in Suzhou, source: Suzhou Municipal Government and related media

3. Clustered development and mutual benefit and promotion of large, medium and small enterprises

After experiencing the "second entrepreneurship" in the late 1980s and early 1990s, Suzhou township industry has gradually achieved industrial agglomeration. The development and construction of township industrial communities has completely changed the previous pattern of scattered development, saved land resources, and achieved good results in "building a nest to attract phoenixes", investment promotion and intensive development. Afterwards, with the completion of the reform, an industrial agglomeration format with the private economy as the main body was gradually formed.

2000, Suzhou's economy grew rapidly, and in 2004, it surpassed Shenzhen to rank fourth in the GDP rankings of all cities in the country. The "Suzhou Model" [4] is well known for its "Suzhou Model" [4], which is known for its export processing, development of an outward-oriented economy and the development zone economy under the guidance of the government. The development of the development zone economy under the guidance of the government, especially the "embedded" industrial clusters [5], has brought about earth-shaking changes in Suzhou's industrial structure, and the proportion of the output value of the original dominant industries has dropped sharply, and industries such as electronic information have grown strongly. Although the development method of this industrial cluster has brought about rapid growth of the industrial economy, it lacks rooting and is mostly located at the low end of the smile curve, which also brings many hidden dangers to the later transformation of Suzhou's manufacturing industry.

Table 2 Changes in Suzhou's pillar industries, Source: Suzhou annual statistical yearbook

In the past decade, with Suzhou's manufacturing industry shifting from labor-intensive production to technology-intensive intelligent manufacturing, and from production-oriented manufacturing to service-oriented manufacturing, on the one hand, more and more technologies and processes are integrated into the industrial cluster. Taking the traditional advantageous industry textile as an example, Suzhou has formed multiple textile industry cluster centers with obvious special characteristics, including the Wujiang Silk section, Zhangjiagang Wool Sweater section, and Changshu Clothing section.

On the other hand, more and more leading industry clusters are also growing. At present, in addition to nationally renowned industrial clusters such as electronic information, automobiles and parts, high-end equipment, Suzhou also has strong cluster advantages in biomedicine, integrated circuits, energy conservation and environmental protection, new materials and other fields. Among them, there are more than 3,000 biomedical enterprises and 50,000 employees, and they are selected as national strategic emerging industry clusters; the industrial park has become one of the eight largest nanotechnology industry clusters in the world, and is the area with the most concentrated nano talents and the highest industrial cluster in the country.

From the industrial agglomeration represented by the Southern Jiangsu model in the 1980s and 1990s, based on spontaneous promotion by the people and gradually formed cooperation and supporting industrial agglomeration with Shanghai. By the mid-to-late 1990s, large-scale introduction of foreign capital, from small industrial agglomerations to large industrial clusters, Suzhou gradually had extremely strong manufacturing capabilities. During the investigation, there was a passage that was repeatedly mentioned, which was impressive. "For any component, if the materials are not limited, we can make it in just two weeks."

In recent years, Suzhou has attached great importance to the integration of industrial cluster construction and innovation capacity cultivation, and recently proposed to build an industrial innovation cluster - inject innovation capabilities into industrial clusters to gather innovation resources into the cluster.

Figure 11 Suzhou City Industrial Map Source: Based on the research shorthand, documents provided by the governments of each district and municipal government, news released by the statistical bureaus of each district and municipality and the official website, the number of large and specialized and new enterprises in Suzhou City also shows the characteristics of the coordinated development of large, medium and small enterprises in Suzhou. Leading enterprises with large scale and strong comprehensive capabilities are the pillars that drive industrial development, and specialized and new enterprises are the basis for enhancing industrial competitiveness and mastering the key core links of the industrial chain. The number of leading private enterprises in Suzhou is higher than that in Wuxi, Ningbo and Foshan. In the 2022 Fortune World Top 500 list, Suzhou has three companies on the list - Hengli, Shenghong and Shagang. Although this data is less than that in Shenzhen (Ping An, Zhengwei Group, Huawei, Tencent, Vanke, China Electronic Information Industry Group, BYD and SF Express, a total of 10), it is more than that in Foshan (Country Garden, Midea, a total of 2), Qingdao (Haier, a total of 1), Wuxi and Ningbo. In terms of the number of national-level specialized and new "little giant" enterprises, Suzhou lags behind Ningbo and Shenzhen, and is higher than the other three cities. However, from the perspective of the provincial comparison, Suzhou has 172 national-level specialized, specialized and new "little giant" enterprises, and 804 specialized, specialized and new "little giant" enterprises in Jiangsu Province, ranking first in Jiangsu Province.

Table 3 Comparison of the number of national specialized and new "little giants" enterprises (four batches in total), data source: Direct to the Beijing Stock Exchange

4. Industrial upgrading and the integration of "industry and urban people" are progressing step by step

In the process of high-quality development, Suzhou pays attention to the integration of "industry and urban people" and urban-rural integration, organically integrates urban renewal and ancient city protection with the layout of "one body and two wings", and explores a path of coordinated promotion of industrial development and urban functional upgrading. At the same time, Suzhou's profound humanistic heritage and beautiful urban environment have become one of the important reasons why many entrepreneurs choose Suzhou, providing momentum for the sustainable development of the industry.

"Industry, city and people" integrated development is supported by cities, providing development space, economic carrier, system and service guarantee for industries; based on industries, drive urban renewal and employment structure transformation, and lead the future economic development direction; with people as the core, promote effective interaction and integration between industries and cities, promote industrial upgrading, enhance urban competitiveness, and form a coordinated development model of the three.

"Industry and Urban People" integrated development can be regarded as the urban soul of Suzhou. Suzhou Industrial Park has abandoned the single industrial development model from the very beginning and focused on the positioning of "industry-city integration and people-oriented". Under the guidance of active and advanced park planning, through market-oriented investment and financing models, we will actively absorb and cultivate innovative industries, fully develop the local industrial chain, and actively lay out modern service industries, from developing the city through industry to prospering together with industry and prospering together. At the same time, the park fully attaches importance to "people" as a key connecting factor, builds an internationally competitive talent attraction and use system, builds a talent development system and an industry-university-research innovation community, learns from and successfully promotes the Singapore neighborhood center model, and provides factor support for the integrated development of "industry-city-civilians" with good public services and the scientific layout of the overall ecological environment of the city.

Today, the industrial park and the original development plan have basically achieved "a blueprint to the end". It has perfect industrial and urban functions, the industrial cluster driving effect is outstanding, the industrial structure continues to be updated, and always maintains a high economic growth rate. With 3% of Suzhou's land and 9% of the population, it has created about 15% of the city's total economic output, achieving organic updates at multiple levels of industries, cities, population and environment.

The development of the new urban area is also an opportunity for the old urban area. In the 1980s, Suzhou took the lead in proposing "comprehensively protecting the appearance of the ancient city" in urban planning, and then formed the urban spatial development concept of "one body and two wings". Suzhou Industrial Park and High-tech Zone are the organic "two wings" of the "one body and two wings" ecology. While improving the urban energy level and industrial structure, it relieves the population and transportation pressure of the ancient city and makes sufficient space for the protection and restoration of the ancient city.At the same time, within the "integration" of the ancient city, Suzhou fully planned, learned from, and demonstrated, took small steps, prudently piloted, and continuously optimized ideas and methods, and took the lead in exploring a set of experiences in the transformation and revitalization of ancient cities. It not only retained the pattern and style of the ancient city, but also formed appropriate business formats and improved the living standards of the residents of the ancient city.

The idea of "comprehensively protecting the ancient city and actively developing new cities" allows modern cities to develop and renew, while the urban cultural context can be preserved, and cultural factors such as "respecting culture and education" and "Su Work and Su Work" can be inherited. Its connotation is a reflection of the quality of precision, perfection and innovation, and it is the embodiment of the spirit of contract, the sense of rules, and the steady style. It is also the instinctive pursuit of Suzhou, as the frontier of openness, constantly absorbing new things, new processes and new knowledge in internal and external exchanges. This urban spirit has played an indispensable role in Suzhou's previous transformation and upgrading. The inheritance of urban spirit in modern Suzhou's commercial culture is not only a long-term deep cultivation and precipitation in subdivided fields, but also a spirit of continuous open learning and active exploration and innovation while sticking to it.

"Industry, Urban and People" integrated development also provides a positive spillover effect for rural development. Suzhou's township economy not only has a high level of development, but also has its own characteristics and rich business formats. Entering the new era, Suzhou took the lead in exploring and implementing urban-rural integration reform measures such as "three major integrations", using the "small town strategy" as a key link, using park construction as a carrier to absorb townships into the division of labor system, the level of agricultural and rural modernization is constantly improving, the allocation of urban and rural factors is constantly optimizing, the added value of rural cultural and environmental products is increasing, the rail transit network is becoming increasingly mature, and the integration of the three industries is constantly improving. Suzhou has now become one of the regions with the smallest urban-rural income gap in the country, and the integrated development of cities and rural areas has achieved high-quality development.

04 Development path of Suzhou manufacturing

1. From automated production to intelligent manufacturing

Since China formulated "Made in China 2025" in 2015, after years of practice, the path of transformation and upgrading of China's manufacturing industry has gradually been clear, that is, by promoting intelligent manufacturing to promote the transformation of production models, and through the introduction of industrial Internet and industrial digitalization, it will promote the transformation of commodity models and the development of productive services, thereby completely changing the existing production methods and industrial organization forms.

Suzhou's manufacturing industry has gone through the processing stage of township enterprises and foreign capital incoming materials. It has traditionally focused on labor-intensive production, and has transformed from labor-intensive to technology-intensive. It is an important way for Suzhou to cope with the rise in manufacturing production costs and improve the efficiency and benefits of manufacturing. As early as 2010, Suzhou began to try to promote processing trade enterprises to change production technology and improve production processes. After 2015, Suzhou has vigorously promoted the transformation of manufacturing enterprises to technology-intensive intelligent manufacturing through a series of policy measures such as creating smart workshops, promoting Internet of Things applications, creating intelligent manufacturing ecosystems, and developing industrial clusters.

Table 4 Suzhou has relevant policies on the transformation and upgrading of manufacturing industry and intelligent manufacturing. Source: Suzhou Municipal Government official website

At present, Suzhou has 3 national intelligent manufacturing demonstration factories, 13 provincial intelligent factories, and 576 demonstration intelligent factories. By 2021, Suzhou will complete 10,600 digital transformation projects, and the city's intelligent transformation enterprises will achieve an output value of 1.4 trillion yuan, accounting for 34% of large-scale industries.

Table 5 The situation of "lighthouse factories" in various parts of China (eight batches in total), source: compiled based on the relevant online news of the World Economic Forum and McKinsey

Developing the digital economy and exploring digital empowerment are also one of the important paths to promote the transformation of intelligent manufacturing. As a manufacturing market, Suzhou is committed to promoting the digital transformation of industrial enterprises, using measures such as interest subsidy rewards, diagnostic services, and benchmark output. It plans to achieve full coverage of digital transformation of about 12,000 industrial enterprises above the designated size in three years, and expand the digital popularization of small and medium-sized enterprises.In terms of "benchmark output", in addition to the 5 "benchmark factories", Suzhou has selected 30 municipal-level benchmark enterprises for intelligent transformation and digital transformation, driving local enterprises to actively transform production lines, targeting digital pain points, reducing production costs, improving product quality, and helping enterprises transform. In terms of platform construction, 12 of the 15 dual-cross-platforms in the country have been established in Suzhou, and local industrial Internet platforms have also continued to grow and grow, continuously promoting the popularization and application of small and medium-sized enterprises from point to surface.

Suzhou's manufacturing industry has many business formats, providing rich application scenarios for digital technology and helping digital technology iteratively update. For example, during the investigation, the expert group noticed that Bosideng had joined hands with domestic companies to develop clothing technology in intelligent transformation, fully integrate digital technology and down jacket industry craftsmanship tips, lead industry standards in subdivided fields, and comprehensively enhance brand influence through digitalization of the supply chain and marketing end. For example, Changshu Switch Manufacturing Co., Ltd., established in 1981, was a small factory on the verge of bankruptcy before its transformation. After 20 years of digital transformation exploration, it not only solved the most complex assembly problems of discrete manufacturing enterprises in intelligent manufacturing, but also transformed into a leading enterprise in the industry. As a fully digital product, its new generation of CW6 and CM6 series circuit breakers have been at the international leading level in overall technology, which is a comprehensive reflection of Changshu switch's continuous integration of process improvement and intelligent manufacturing. Changshu Switch invested 130 million yuan in R&D in 2021, with a R&D intensity of about 4.78%.

There are two characteristics worth paying attention to in Suzhou's transformation path to technology-intensive intelligent manufacturing.

First of all, intelligent manufacturing does not exclude people, but reduces the proportion of labor in the production system, reduces artificial factors during the production process, and increases the proportion of knowledge and technology in the entire production system.

Second, Suzhou intelligent manufacturing is not blindly pursuing "intelligence", but is effect-oriented, that is, whether through intelligent manufacturing, it can improve production efficiency and comprehensive resource utilization rate, reduce R&D cycle, operating costs and product failure rate. In Kunshan, where the electronic information industry accounts for half of the market, the product iteration and update speed of the electronic information industry is accelerating. If modular and flexible manufacturing cannot be achieved in intelligent transformation, the production line will easily fail to adapt to the speed of product iteration. Therefore, even for many large enterprises, digital transformation is carried out from a certain key link, such as component management, logistics links, etc.

2. From production-oriented manufacturing to service-oriented manufacturing

The new generation of industrial revolution has brought a series of major changes to industrial development, and service-oriented manufacturing has become a new trend in the manufacturing industry. Automation brings reduced costs and profit margins for large-scale production. Enterprises extend from simply focusing on product production to product + services, providing value-added services to customers during use. Manufacturing enterprises need to continuously increase the proportion of service factors in input and output ratio by innovating and optimizing production organizational forms, operation management methods and business development models, so as to continuously extend and enhance the value chain.

Developed countries often have "two 70%" phenomena - in addition to the increase in the output value of the service industry to 70% of GDP, productive services also account for 70% of the service industry. Productive services are a key link in the integration of the secondary and tertiary industries and an important driving force for the transformation and upgrading of manufacturing industries. Relevant studies show that the development level of productive services can be increased by 1%, and the efficiency of manufacturing can be increased by 39.6%. For Suzhou's industrial transformation, developing productive services, developing extension and supporting industries, and extending manufacturing to both ends of the smile curve is very important for improving the comprehensive competitiveness of urban manufacturing.

Suzhou's production-oriented manufacturing industry has made early transformation and achieved remarkable results. As early as 2003, Suzhou City explored the service-oriented transformation of manufacturing [6]. Since 2014, Suzhou City has issued important policy documents every year to clearly support the development of service-oriented manufacturing, and regularly organizes enterprises to participate in service-oriented manufacturing training every year. In 2018, Suzhou became one of the first six "service-oriented manufacturing demonstration cities" in the country. By 2021, it was rated as 11 national service-oriented manufacturing enterprises, accounting for half of Jiangsu Province.

However, according to the data, the added value of Suzhou's productive service industry in 2020 was 575.1 billion yuan, accounting for about 28.5% of GDP, which is still more than ten percentage points away from cities such as Beijing, Shenzhen, and Hangzhou [7]. In 2020, Suzhou proposed to build a "benchmark city for productive services", layout the productive services industry in a high-standard system, and issued a series of policy measures, focusing on supporting nine major productive service enterprises such as R&D design, supply chain management, inspection and testing and certification services. It is planned that the added value of the productive services industry will exceed 1 trillion yuan by 2025.

Customized production is one of the typical methods of service-oriented manufacturing. Although Bosideng has experienced several brand transformations, it still faces the problems of brand aging and weak innovation. It is regarded as the key to breaking the situation by Bosideng. In 2010, Bosideng began to introduce intelligent production equipment and invested nearly 100 million yuan to introduce internationally leading intelligent production lines to improve workers' production efficiency and production flexibility, laying the foundation for achieving rapid response to the supply chain. Bosideng's intelligent manufacturing production base innovatively promotes the flow model of clothing processing parts, achieving a highly automated and intelligent production, creating basic conditions for small batch, multi-variety and rapid response production. Chery Jaguar Land Rover in Changshu has also formed a relatively mature flexible production capacity, and cars of different specifications and configurations can be produced on the same production line.

There are also many Suzhou manufacturing companies that have gradually transformed from exploring their own intelligent manufacturing transformation and building smart factories to intelligent manufacturing solutions providers. Wistron Group, Bosch, AUO Optoelectronics, Hengtong Group, Yonggang Group, Bozhong Precision and other companies have separated branches such as software development, system integration, and information services, established independent legal entities to export professional services to the outside world.

Wistron Zitong (Kunshan) Co., Ltd. has established a service agency Weiji Intelligent to provide intelligent transformation solutions from diagnosis to final implementation results, as well as long-term services throughout the whole cycle. For example, Bozhong Precision, which started with consumer electronics OEM, has made consumer electronics intelligent solutions and new energy intelligent manufacturing solutions its main business areas by combining the accumulation of underlying industrial automation technology and the technical know-how of production process in related fields.

3. From scale expansion to specialized and specialized development

As an important support for my country's economic resilience and a key entity to improve the modernization of the industrial chain and supply chain, cultivating specialized and specialized enterprises and stimulating the innovation and development vitality of small and medium-sized enterprises is receiving great attention. At the 2022 National People's Congress and the Chinese People's Political Consultative Conference, "specialized, specialized, and innovative" was written into the "Government Work Report" for the first time.

Suzhou currently has 172 national specialized, specialized, and specialized, small giant enterprises, and the fourth batch of national specialized, specialized, specialized, and specialized, specialized, and specialized, and specialized, and 123 shortlisted, ranking first in the province. Suzhou's specialized and new enterprises have formed an overall driving force for small and medium-sized enterprises with their outstanding comprehensive evaluation of quality and efficiency, stable status in subdivided industries, obvious advantages in scientific and technological innovation, and a high level of integration of industrialization and industrialization. They have played a positive role in the high-quality development of Suzhou's economy

Changguang Huaxin was recently selected into the fourth batch of national specialized and new "little giant" enterprises. Since its ten years of establishment, Changguang Huaxin has insisted on independent control and has completed everything from chip design to chip manufacturing independently. Faced with the technological gap with foreign competitors, Changguang Huaxin chose to focus on specific fields, insist on striving for excellence, make breakthroughs one by one, and win the market with technology and quality. At present, Changguang Huaxin ranks second in the world and first in the country in the market segment of high-power semiconductor laser chips, and is expanding into optical communications, vehicle-mounted lidar and other fields.

Another example is the Guangda Special Materials, which has fully transformed into special steels after its establishment two years. Through long-term and gradual technological innovation accumulation, it has continuously explored and made breakthroughs in various core key processes that determine material performance and stability such as smelting, molding, heat treatment, and industrialized applications in gear steel, mold steel, precision mechanical parts, special stainless steel and special alloys.The Guangda Special Materials continues to invest in R&D and improve new core technologies, and the proportion of R&D to operating income has remained at 3%-4% for many years, reaching 4.78% in 2021.

The development of Suzhou's specialized and new enterprises cannot be separated from Suzhou's systematic planning and overall promotion, and also from the active service and strong support for enterprises. In summary, Suzhou City cultivates specialized and special enterprises with a combination of goal-oriented and problem-oriented approach, taking into account short-term support and medium- and long-term development, and systematically makes efforts from the three dimensions of "short, medium and long".

In the short term, we will strengthen personal assistance based on enterprises and help enterprises take a stable and practical path of specialized and specialized development. Suzhou City focuses on the difficulties and bottlenecks in the development of small and medium-sized enterprises, actively increases financial and tax support, optimizes credit policies, and smooths financing channels. It implements policies according to enterprises and industries, effectively solving the core problems of the development of a number of specialized and new enterprises, and ensuring the stable development of specialized and new enterprises. For example, Suzhou's "Policy Calculator" integrates policy documents at all levels, starts from the needs of enterprises, interprets and sorts out policies and digitally dismantle them in combination with business of different lines, and reconstructs the standard policy content from the enterprise's perspective so that enterprises can find and understand them; on the other hand, it is for enterprises to build households and files, and through dynamic gathering of various types of data information, it forms a multi-dimensional "customer portrait" to lay the foundation for the accuracy and personalization of policy services. Achieve accurate policy push and solve the problem of "last mile" of policy services.

in the medium term, accelerate the development space of specialized and new enterprises to supplement chains, extend chains, stabilize chains, and expand and widen specialized enterprises. In addition to relying on policy support and breaking through development bottlenecks such as capital and technology, the market is the key to the survival and development of enterprises. Relying on the manufacturing foundation, Suzhou City accelerates the promotion of the existing industrial chain to supplement, stabilize and consolidate chains, and continues to promote small and medium-sized enterprises to enhance their hematopoietic capabilities, actively integrate into the city's industrial chain and supply chain development pattern, and expand market segments. For example, Kunshan relies on 13 leading enterprises (groups) as the center to extend, supplement and strengthen chains, and drive scientific and technological innovation and specialized and innovative development of upstream and downstream small and medium-sized enterprises. At the same time, build a financial supply and risk assessment system that integrates core enterprises and upstream and downstream enterprises that dominate the supply chain, and use the "big and strong" core enterprises to achieve "fast and intact" financing for upstream and downstream small and medium-sized enterprises.

, in the long run, we will continue to promote business quality improvement and brand forest cultivation, and cultivate a strong soil for innovation and development of specialized and innovative enterprises. In the final analysis, the competitiveness of urban industries is inseparable from the ecological environment and business environment of industrial innovation clusters, and even more so from the shaping and empowerment of urban brands. In recent years, Suzhou has actively promoted the construction of an innovative ecosystem, continuously optimized the business environment, implemented the "Suzhou Manufacturing" brand forest cultivation project, accelerated the quality, efficiency and power transformation of "Suzhou Manufacturing", and made every effort to launch the "Suzhou Manufacturing" brand, and cultivated the development soil for specialized and new enterprises. For example, Suzhou Industrial Park issued the "Implementation Plan for the Special Action of Suzhou Industrial Park's "Speciality, Special, Special, and New" Plan", proposing to use five major categories of resources in industry, finance, talents, services, and technology to help small and medium-sized enterprises embark on the path of "Speciality, Special, Special, and New" to strengthen government guidance and gather resources from all parties, and provide professional, refined, distinctive and novel services for "Speciality, Special, and New" enterprises.

In the new journey of firmly grasping the "strong city in the industrial chain", shaping new development advantages, and achieving high-level breakthroughs in development, Suzhou still needs to strengthen the demonstration effect, take the initiative, actively explore, strengthen the three combinations, improve the "Suzhou experience", run out of "Suzhou speed", and launch the "Suzhou brand" in the cultivation of specialized and innovative ideas. First, we must promote the combination of strong enterprises and strong chains to enhance the driving force of specialized and specialized enterprises. The second is to promote the combination of enterprise digitalization and cluster digitalization to enhance the competitiveness of specialized, specialized and new clusters. The third is to promote the combination of county leadership and industrial-city integration to enhance the radiation power of specialized and specialized enterprises.

4. From a single R&D investment to aggregation of innovation factors

In terms of leading economic development in science and technology, Suzhou is at a relatively advanced level in the country. The ratio of R&D investment to GDP in the whole society in 2021, Suzhou was second only to Shenzhen, reaching 3.9%, and grew rapidly in the six years from 2016 to 2021, significantly higher than that of several other manufacturing markets.Shenzhen, which has multiple "technology giants" companies, has a figure of 5.36%.

compares Suzhou across the country. Although there are relatively few universities and scientific research institutions in Suzhou, Suzhou, which integrates industrial cluster construction and innovation capabilities, ranks fifth in the four first-tier cities in the R&D investment rankings of the whole society with its rich industrial system and huge high-tech industries (see Figure 12).

In recent years, Suzhou has been committed to developing high-tech industries. In 2021, the city's high-tech manufacturing output value was 1406.22 billion yuan, an increase of 11.9% over the previous year, accounting for 34.0% of the total output value of large-scale industries.

As of July 22, 2022, the number of listed companies on Suzhou Science and Technology Innovation Board reached 46, second only to Shanghai (65) and Beijing (59). The competition between Suzhou and Shenzhen is quite fierce - as of the end of 2021, Shenzhen, which ranks third, is still the number of 29 listed companies.

Figure 12 Ranking of R&D investment in various cities in China (2020) Source: Tencent News Penguin https://new.qq.com/rain/a/20220718A01VUC00

According to Suzhou City's deployment, the next step is to focus on industrial innovation clusters. The most important task is to promote cooperation between actors and increase the collective efficiency and synergistic effects of actors [8]. Suzhou is transforming from a production cluster mainly based on industrial supporting facilities to an innovation cluster mainly based on cooperation and interaction, which involves issues such as industry-taxi integration, industry-education integration, industry-financial integration, and industry-innovation integration.

Industrial innovation cluster should not be just an economic process for the government to simply "build an industrial chain", but an important carrier for government, industry, academia and research to work together to improve the quality of industrial development and improve local competitive advantages. In this regard, the development of Suzhou's industrial innovation clusters particularly reflects the vitality of the local economy. In addition to industrial innovation clusters based on government planning parks or "large courtyards and large offices", private enterprises in Suzhou also play an important role in creating cluster innovation resources. For example, the leading enterprise Shenghong Group and Donghua University have established an advanced functional fiber innovation center to establish a technology innovation system that integrates production, education, research and application. This is also the first national innovation center in the country led by private enterprises. For example, Hengtong Group has invested in basic research and has set up 5 national and provincial key laboratories.

5. From industrial structure adjustment to modern industrial system construction

In the first decade of the 21st century, Suzhou's industrial structure adjustment has gradually accelerated. Especially since the 2004 Service Industry Promotion Conference, Suzhou has promoted the "leapfrog development of the service industry" and proposed the development plan of "in the next 35 years, the proportion of the added value of the service industry to regional GDP will strive to increase by 12 percentage points per year."

Suzhou requires the development of the service industry to achieve a "leapfrog" approach, which is Suzhou's forward-looking judgment on the sustainable development of the secondary industry, especially the shortage of economic resources, and hopes to create advantages for the secondary upgrading of the manufacturing industry through the development of the service industry.

In actual development, the increase in Suzhou's tertiary industry's share of GDP was not a rash progress, but achieved steady progress within a relatively suitable range, gradually rising from 31.3% in 2004 to 40.1% in 2010, and rose to 50.4% in 2016 (Figure 13). In addition to a series of government support policies for the service industry, Suzhou mainly activates the internal vitality of industrial development by introducing market mechanisms in various fields of the service industry, forming a virtuous cycle towards the market. For example, in 2003, Suzhou first proposed to fully open the service industry to Hong Kong.

Figure 13 The proportion of Suzhou's three major industrial structures changes, data source: Suzhou City Statistical Yearbook

In the second decade of the 21st century, Suzhou once again actively promoted industrial adjustment, changing from focusing on the upgrading of the industrial structure to focusing on the shaping of the modern industrial system. Suzhou has further clarified its development goals and no longer focused on changes in the proportion of industrial structure, but has paid more attention to the overall competitiveness of the urban economy.

uses strategic emerging industries to cultivate economic growth points, gather factors with the improvement of urban functions and the improvement of urban humanistic spirit, and win the advantages of innovation, competition and development advantages with the advantages of talents.We will focus on solving problems such as excessive proportion of foreign capital, dependence on foreign capital development paths, and insufficient vitality of the private economy, so that economic development will shift from raw to innovation-driven, and from extensive growth to intensive development.

In terms of strategic emerging industries, Suzhou proposes to leapfrog development of eight strategic emerging industries, including new energy, new materials, biotechnology and new medicine, energy conservation and environmental protection, software and service outsourcing, smart grid and the Internet of Things, new flat panel display and high-end equipment manufacturing. Under the long-term cultivation and guidance of the government, Suzhou has gradually formed the current four major leading industrial structures: electronic information, equipment manufacturing, biomedicine, and advanced materials. By the end of 2021, the proportion of the output value of emerging industries in Suzhou's manufacturing industry to the total output value of large-scale industries has reached 54%.

In the construction of the modern industrial system, Suzhou has always adhered to the principle of "manufacturing to build a city". While promoting the development of the dominant industries, it has laid out scientific research institutions, innovation carriers, financial services, and training institutions. The concept is that these institutions need to develop around serving the needs of the industry, and advocate the integration and coordination of science and technology, finance, talents and manufacturing. The fundamental purpose is to enhance the rooting and competitiveness of the manufacturing industry.

6. From industrial needs to drive application-oriented innovation development

lacks basic innovation breakthroughs from "0-1" and is the main concern of people about the weak momentum of Suzhou's future development. The number of universities and research institutes in Suzhou does not match their economic size. In the 1980s and 1990s, Suzhou township enterprises used the "Sunday Engineers" to overcome technical problems, but now they rely on Suzhou City and various districts to attract universities and scientific research institutions to settle down. 34 branches including the Institute of Nanotechnology and Medical Engineering of the Chinese Academy of Sciences have settled in Suzhou, accounting for 20% of the national research institutions of the Chinese Academy of Sciences.

Objectively speaking, it is not realistic to make Suzhou take on too much basic research tasks due to the influence of urban energy levels, Shanghai siphon effect and economic structural characteristics. Solving the R&D problems of enterprises in "1-100" applied technology is the core goal of Suzhou to introduce "big courts and large institutes". Foreign capital, which accounts for half of Suzhou's economy, is difficult to integrate into the local innovation environment. The number of leading private enterprises that can actively drive the development of the innovation chain is still limited, and the Suzhou government needs to provide forward-looking guidance to graft scientific research and industry. Through the investigation, we can find that the mechanism of Suzhou's industry-university-research cooperation has been established around the four major industries of Suzhou. This has created good conditions for the transformation of scientific and technological achievements.

Materials Science Gusu Laboratory, established in 2020, was jointly invested by Suzhou City and the Industrial Park. The original intention of establishing it is to "serve application", requiring that technological innovation must be closely integrated with industrial needs, and design a mechanism for "pre-ordering results transactions". The "three-dimensional overlap" model of international frontiers, national demand and market demand can guide enterprises to intervene in scientific research earlier and get more exposed to basic science. At present, the three key material breakthrough directions of Gusu Laboratory are concentrated in the field of electronic information, which is highly consistent with Suzhou's industry advancing to high-end and solving the "bottleneck" problem of key raw materials and core components. The creation of permanent scientific research institutions in

has supplemented the basic research force in Suzhou. For example, the Yangtze River Delta Materials Research Institute has both fixed scientific researchers and can mobilize top academicians and professors in related fields in China. At the same time, through innovative system design, a market-oriented incentive mechanism is used to encourage the technology transformation of local R&D teams. In addition, scientific research institutions also undertake the task of sharing resources of common technology platforms. Across the city, there are currently 54,970 instrument facilities including Shanghai Light Source Large Science Equipment, Fudan University's National Laboratory for Special Integrated Circuits and Systems, Nanovacuum Interconnection Laboratory and other high-end scientific research facilities, with an original value of 40.5 billion yuan, providing 24,800 services, and solving 5,861 various needs of enterprises.

Suzhou's innovative development model is mainly demand-driven.Combining Suzhou's industrial characteristics and development needs, introducing "big courts and large offices" can not only help Suzhou's manufacturing enterprises transform and upgrade, form a complete industrial service chain, but also help Suzhou's park economy achieve new breakthroughs, build an industrial cluster with innovative resources as the core, and provide support to enterprises with industrial funds on this basis.

7. From serving the needs of entities to building a new ecosystem of industrial and financial integration

Suzhou has built a new type of industrial and financial cooperation ecosystem to fully expand financial functions and optimize the effect of financial service entities. This is also the core "grabbing tool" of Suzhou Finance. This is in line with the current local financial reform in my country from one-sided pursuit of factor aggregation to attaching importance to complete financial functions and sound ecology. In 2021, Suzhou's financial industry achieved an added value of 197.1 billion yuan, accounting for 8.7% of the city's GDP. At present, Suzhou has a total of 292 licensed financial institutions, 309 local financial organizations, and 455 private equity fund managers registered with the China Securities Investment Association. Suzhou's industrial and financial integration includes the following characteristics:

first, comprehensively promoting industrial finance innovation and development. Suzhou has resource endowments and industrial layout with unique characteristics and outstanding comparative advantages, and its financial development naturally needs to be based on helping industrial optimization. In recent years, Suzhou has based on the development needs of manufacturing enterprises and fully played the leading role of the market. The government has built platforms and aggregated resources to guide and promote financial innovation to serve manufacturing enterprises, helping to build a demonstration city of "innovation clusters leading industrial transformation and upgrading" and promoting the leap of the industrial economy to the innovative economy. By the end of June 2022, there will be 162 registered venture capital enterprises in the city with a cumulative registered capital of 68.67 billion yuan and a cumulative paid-in capital of 43.13 billion yuan.

Through the investigation, it was found that most sectors in Suzhou have established guidance funds and direct investment funds in the form of state-owned assets, forming several representative models such as policy investment platforms, guidance fund platforms, capital + industrial park collaboration, etc., and cooperate with government investment promotion and talent attraction, forming strong state-owned assets leverage and market participation in strategic emerging industries. Focusing on core themes such as biomedicine and scientific and technological innovation, a large number of key industrial projects have been accelerated with strong financial support.

Second, attach importance to the interaction and integration of finance and technology. Suzhou continues to deepen its R&D and innovative achievements and builds the core driving force of "financial + technology". On the one hand, from the perspective of financial technology, Suzhou has orderly undertaken and promoted the pilot of financial technology innovation supervision, becoming the first batch of digital RMB pilot cities, and strived to be implemented by the Yangtze River Delta Digital Currency Research Institute. It has exploratoryly formed a number of application scenarios, and its pilot demonstration role is at the forefront of the country, initially forming the extension and agglomeration of the upstream and downstream of the industrial chain, strengthening the deep integration of finance and technology, and is expected to form a new business model. On the other hand, from the perspective of science and technology finance, in recent years, Suzhou's finance, science and technology, industry and information technology and other departments have strengthened coordination and linkage, improved policy chains, unblocked information chains, leveraged capital chains, and optimized service chains, guided financial institutions to increase support for scientific and technological innovation, forming a four-chain-linked "Suzhou model".

Third, practice "internal strength" well to improve the policy environment and basic elements. In recent years, Suzhou has issued a series of important policies such as the "Suzhou City Financial Support Enterprise Independent Innovation Action Plan", "Several Specific Policies for Financial Supporting the Development of Manufacturing Industry", "Opinions on Implementing the Project for Financial Services for the Financing of the Real Economy", "Suzhou City Financial Supporting the Development of Industrial Innovation Clusters", "Guiding Opinions on Promoting the High-Quality Development of Suzhou's Financial Industry" and "Several Measures", and actively build a benchmark city for financial services for the real economy, a benchmark city for digital financial innovation, a benchmark city for industrial capital agglomeration, and a benchmark city for financial open cooperation, and strive to build a functional financial center with good synergistic enhancement effect with the Shanghai International Financial Center.At the same time, the basic elements represented by credit reporting services have been continuously improved. Suzhou has successfully created the first batch of demonstration cities for social credit system construction in the country, carried out pilot projects for the construction of digital credit experimental zones for small and micro enterprises, and maintained the top two prefecture-level cities for a long time in the monitoring of urban credit status in the country. It has won the first place in the special assessment of provincial social credit system construction many times, and actively participated in the construction of the "national + local" double-layer credit reporting system promoted by the central bank.

Fourth, make full use of the "three-dimensional functions" of the multi-level capital market. Over the years, Suzhou has insisted on the overall work idea of "reserving a batch, cultivating a batch, tutoring a batch, applying for a batch, and listing a batch" to establish a reserve echelon for sustainable listing, and has initially formed a good atmosphere of "supporting enterprises to go public and supporting listed companies". According to statistics, in the first half of 2022, Suzhou added 14 new A-share listed companies, ranking second in the country, and 25 new companies under review; in the first half of the year, major major indexes in the market fell generally, 32 Suzhou stocks (excluding new stocks) rose. In addition, Suzhou's venture capital industry has embarked on a unique "new industrial and financial model". According to the "2021 China Mainland Province and Municipal Venture Capital Strength List" released by Securities Times and China Capital Market Research Institute, Suzhou's venture capital strength ranks sixth in the country and first in Jiangsu, especially in terms of venture capital institutions, innovation strength, government support, etc.

Fifth, use policy financial means to improve market risk management. The complementary support of policy-based finance and commercial finance is another feature of Suzhou's financial development. For example, the "Credit Insurance Loan" established in 2015 uses the credit insurance fund to leverage the loan scale and support the development of small and medium-sized enterprises. As of the end of May 2022, a total of 10,376 enterprises have obtained credit grants, exceeding 100 billion yuan. For example, in recent years, Suzhou has set up special reward and subsidy fund pools such as technology loan risk compensation funds, credit guarantee funds, and technology loan interest subsidies. The "Notice of Suzhou Science and Technology Financial Plan Project" has been updated and issued every year to compensate for the risk losses of technology credit through the "government compensation + bank credit" risk sharing model. In addition, Suzhou Industrial Park launched "Yuanyirong" in 2020. Currently, 10 policy-based financial products and 152 inclusive financial products have been listed, with a total of 7,377 demands and a credit limit of over 40 billion yuan.

Compared with Suzhou, the sixth-ranked urban economic scale in the country, its finance still has huge room for development. It is expected that Suzhou will rely on a strong manufacturing and trade foundation to amplify the existing innovation advantages of financial services to the real economy, continuously break through development bottlenecks, and truly build it into a benchmark city for financial services to the real economy.

8. From optimization of the business environment to building the industrial ecosystem

Influenced by the construction experience of industrial parks and high-tech zones, Suzhou is leading the country in creating the business environment. Since the 1990s, the concept of a service-oriented government, the efficiency of business approval, and the predictability of policy brought about by "drawing a blueprint to the end" have been implemented in Suzhou. This process began with the establishment of the Suzhou Industrial Park, the first Sino-foreign cooperation open zone. The successful experience of the industrial park was summarized as "After all, it is the success of us learning from Singapore's experience and building a service-oriented government." [9] According to the concept of the Singapore government, the economic growth rate is closely related to the quality of government services. Good economic institutions, especially the public sector, are crucial to attracting foreign investment and promoting economic growth. The concept of

was soon popularized throughout Suzhou. In the "Opinions on Promoting Government Reform and Accelerating Functional Transformation" issued by Suzhou City in 2002, Suzhou proposed to promote the transformation of administrative behaviors and management methods from regulatory to service, from micro to macro, and from direct intervention to indirect regulation; adhere to administration according to law, perform statutory duties in a standardized and efficient manner; cultivate and develop various industry associations and intermediary institutions, and build a social service system with standardized management and efficient operation. Since 2012, Suzhou has proposed to "make the rule of law an important symbol of Suzhou's core competitiveness", with the intention of summarizing and sorting out reform measures in the construction of the business environment and elevating effective measures to local laws and regulations.

During the survey, all enterprises recognized Suzhou's business environment of "no trouble and no need to respond to all requests", and also mentioned that the process of applying for financial subsidy projects is simple and proactive, so that "recommended policies will be found in enterprises." In particular, it should also be pointed out that the initiative and responsibility of the grassroots are willing to help enterprises solve practical problems and do not adopt a "one-size-fits-all" approach when governing.

However, the basic operating needs of an enterprise are to obtain continuous profit and expand development space. The thoughtful service of the "waiter" alone cannot fundamentally meet the development needs of the enterprise.

Suzhou has begun to build an industrial ecosystem half a step ahead of other cities. A good business environment can reduce the costs of market entities, enhance investment incentives for market entities and stimulate innovation motivation for market entities. The construction of the industrial ecosystem can continuously generate systematic integration rewards, truly forming the industry "cannot be moved away, cannot be crushed, or broken down." Under the construction of the industrial ecosystem, foreign-invested enterprises in Suzhou have formed an internal and external linkage with local enterprises, giving full play to the positive externalities of the outward-oriented economy; the endogenous driving force has been increasing year by year, and batches of specialized and innovative "little giant" enterprises in subdivided fields have grown vigorously. Therefore, Suzhou's manufacturing industry chain is resilient under the epidemic, which is of particular significance in both the current international and macro environments.

Medical Device Industrial Park is a typical example of Suzhou's industrial ecological construction. The Hi-tech Zone Government has developed and operated the first medical device industrial park in China by establishing a district-owned state-owned enterprise. In addition to the carrier development and property operation functions of the industrial park, the medical device industrial park also provides technical service platforms and public service platforms. The technical service platform provides a basic common platform. The park has introduced a medical device availability testing platform, the Suzhou Branch of the Jiangsu Medical Device Inspection Institute, the First Institute of Engineering of the Chinese Academy of Sciences, the Southeast University Medical Device Research Institute, etc., to provide inspection and testing, technical services and other support for park enterprises. The public service platform helps enterprises, especially small and medium-sized enterprises, connect with provincial and municipal government resources, such as drug supervision and evaluation agencies, solves the problems of enterprises in registration, approval and listing, and strives to quickly bring medical device companies in the park on the right track, quickly launch products, and achieve profitability. After 10 years of development, the park has more than 300 enterprises, and the industrial scale has reached an explosive period.

The government is the manager of society. It takes solving public and social problems as its responsibility, and serving the people as its purpose. It is responsible for safeguarding the interests of all kinds of groups. In addition to service-oriented concepts and efficient operation, it should also have a long-term vision. In this regard, the Suzhou government has shown forward-lookingness and regards scientific prediction and effective prevention as one of its core functions. While doing a good job in attracting investment, Suzhou has begun to actively guide and focus on cultivating emerging industries more than 10 years ago, and insist on long-term investment and support.

Industrial Park was the first to actively carry out industrial cultivation. Since 2006, it has anchored the three emerging industries of biomedicine, nanotechnology application, and artificial intelligence, and explored and accumulated the "ten ones" characteristic cultivation mechanism, namely, focusing on a characteristic industry, formulating an industrial plan, forming a state-owned assets company, building a functional park, introducing a large compound and a large institution, setting up an industrial fund, establishing a service agency, gathering a number of leading enterprises, building a number of cooperation platforms, and creating a grand event. Taking the most representative biopharmaceutical industry as an example, by July 2022, there were 23 listed companies in the biopharmaceutical industrial park in the industrial park, most of which were introduced and cultivated by the park. Now this industrial cultivation model has been replicated in many sectors in Suzhou.

In addition to the biopharmaceutical industry, in the field of advanced materials, through building scientific and technological innovation carriers, introducing high-end innovative talents, forward-looking deployment of new nanofunctions, nanobiome, nanomaterial macros, etc., a full industrial chain layout from raw materials to applications has been formed in Suzhou City. It has more than 200 enterprises and institutions including the Institute of Nanotechnology, Chinese Academy of Sciences, and output value exceeds 28 billion yuan.

05 Challenges and leaps in Suzhou Manufacturing

Standing on the new level of the total industrial output value exceeding 4 trillion yuan, Suzhou Manufacturing has become a leader in the country and even the world. However, on the road to further climb, there are still many problems and challenges.For example, in terms of innovation capabilities, high-end innovation resources are still insufficient; in terms of coordination between districts and counties, the lack of centripetal force in the main urban area has been caused by historical evolution and industrial layout; in terms of industrial integration, the cross-border integration of different industries is still insufficient; in terms of development environment, there is a high risk of accelerated restructuring of the supply chain industrial chain. Faced with these new challenges, Suzhou needs to further grasp the general trend, seize opportunities, resolve risks, further enhance the international division of labor status and international competitiveness, and achieve "both big and strong".

1. Challenges faced by Suzhou's manufacturing industry

(1) Global industrial chain and supply chain reconstruction

Suzhou's outward-oriented economy has a strong color. In the field of industrial economy, foreign-invested enterprises account for nearly 60% (57.3%) of the total industrial output value above the designated size of Suzhou in 2021, and foreign investment still plays a ballast role in Suzhou's economy. At present, the comparative advantages of China's manufacturing industry are weakening with the complementarity of developed countries, and the international division of labor and industrial chain adjustment have already begun. Against the background of anti-globalization trend, supply chain contraction, slowing trade and investment, and the long-term strategic game between China and the United States, the external conditions on which Suzhou relied for prosperity in the past are undergoing major changes.

After the last round of economic structure adjustment, Suzhou's ability to resist external risks has been significantly strengthened, but due to geopolitical influence, the global supply chain industry chain may suffer an unexpected impact in the future. In this regard, Suzhou should plan and make arrangements as soon as possible. The following factors are promoting the accelerated reconstruction of the global supply chain industry chain:

First, risk costization. For a long time, the layout and adjustment of the industrial chain have mainly followed the economic law of "factor cost-benefit". However, the risk costs caused by non-economic factors are now included in the enterprise spatial decision-making function, and the industrial chain is linearly adjusted according to economic laws and turns to a non-linear jump, and the trend of localization, diversification and friendly straitization is obvious.

The second is the digitalization of knowledge. In recent years, with the increase in the penetration rate of digitalization of manufacturing, localized "hidden knowledge" has been digitized and explicitly employed by industrial software, and knowledge overflows have become faster, convenient and low-cost, reducing the technical threshold for industrial transfer.

The third is the business environment park-basedization. For example, Singapore is implementing a park model similar to the China-Singapore Suzhou Industrial Park in ASEAN countries such as Vietnam. This will quickly improve the level of hardware infrastructure, accelerate the optimization of the institutional environment in specific areas of developing countries, and create a better environment for them to undertake industrial transfer.

If Suzhou's manufacturing industry develops according to the original international division of labor, it will not be able to keep up with the pace of global restructuring. For example, among Apple's top 200 supplier factories in the world, there are 75 Suzhou companies (more than 120 in Dongguan, Shenzhen, Shanghai and other places in China), and only more than 20 in Vietnam and India, ranking first in major cities around the world. However, in the context of the global industrial chain fluctuating and reorganization, as a member of the supply chain of multinational chain leaders such as Apple and Samsung, many manufacturing companies in Suzhou with a high market share will face the risk of being replaced or being required to be transferred abroad.

Figure 14 Number of Apple factories in some regions, Source: Zhuo Xian, 2020: "China's manufacturing chain protection is fundamentally strengthening the chain"

(2) International and domestic innovation competition accelerated

The epidemic has been in continuous turmoil in the international situation, the world's economic development has slowed down, and major industrial developing countries are facing the risk of economic recession. History shows that when the risk of an economic recession increases, innovation often accelerates, breaking through risk pressure with technological changes, and laying the rapid speed after recession with innovation. Many years ago, major industrial countries observed the trend of accelerated technological change, increased labor costs and increased resource and environmental constraints, and have formulated various strategies and plans, and now they have shown their due role. Today's international landscape has undergone tremendous changes, and these major industrial countries have accelerated their pace and increased their efforts.

Table 6 Related plans for technological changes in major industrial countries since the outbreak of the epidemic, Source: Ge Chunlei and Li Hong, "Where does the international scientific and technological innovation strategy go?" Guo Yujuan and Hao Jiaxing "The United States releases a new version of the "List of Key and Emerging Technologies""

Suzhou Manufacturing still needs to face the pursuit of other cities in China to accelerate innovation. Under the requirements of power transformation and high-quality development, cities with developed manufacturing in China have increased R&D investment, accelerated intelligent transformation and digital transformation, and strengthened the construction of innovation systems, creating a situation of chasing each other. In the 2021 innovative city innovation capability ranking released by the China Institute of Science and Technology Information of the Ministry of Science and Technology, the top ten cities are Shenzhen, Hangzhou, Guangzhou, Nanjing, Suzhou, Wuhan, Xi'an, Changsha, Hefei and Qingdao. Among them, Hangzhou, ranked second, has ranked first in the country for many years, and the R&D expenditure and effective invention patents in the whole society have increased strongly. Nanjing, which also belongs to Jiangsu Province, was approved to build the first leading national innovative city in the country in 2021. The fastest-progressing city is Hefei, which has successfully risen from 13th to 9th in the country, occupying four seats among China's ten major technological breakthroughs in 2021 sorted out by the Science and Technology Daily.

Compared with the top cities in the above list, Suzhou still has a gap in some fields, which is manifested as the conversion rate of scientific and technological achievements is relatively low, the source innovation is relatively small, and there are few large private enterprises with technological leadership. During the investigation, the expert team found that even the biopharmaceutical industry focused on building in Suzhou Industrial Park, many high-tech enterprises are still in the stage of local innovation and imitation. Improving innovation capabilities and putting a lot of effort into the business environment, innovative policies and government supervision will be one of Suzhou’s important tasks in the next few years.

First of all, improving innovation capabilities is a systematic project. A complete innovation ecosystem should consist of 6 chains, namely, the close integration of innovation and enterprises, the connection between innovation and basic research, the transformation of innovation and results form an industrial chain, the connection between innovation and talent construction, innovation and financial capital, and innovation and government public services, etc. When building innovation capabilities, Suzhou is prone to introduce scientific research institutions and institutes according to the inertial thinking of attracting investment. Many institutions exist as nodes, and the interaction and links between institutions need to be strengthened, and it is necessary to build an innovation ecosystem "from point to line" and "from line to surface".

Second, there are still shortcomings in the innovation ecosystem. In the field of basic research and technical research, Suzhou lacks major innovation carriers, large scientific devices, and first-class key common technology research and development platforms. In terms of talent construction, the construction of a modern innovation system requires especially comprehensive talents. During the survey, many institutions and enterprises reported that they lacked talents who were familiar with international production and management experience, technical leaders engaged in top-level design, talents who were familiar with international capital operations, talents who were cross-industry and cross-field, and talents who were integrated with general markets, technology, economy and even policies.

Third, small and medium-sized enterprises have difficulties in the transformation of results. Research in Zhangjiagang, Wuzhong and other places found that small and medium-sized technology enterprises face some common problems, such as difficulty in introducing high-end talents, difficulty in project financing, difficulty in obtaining technology, weak external support capabilities for enterprises, limited market expansion channels, and lack of ability to cultivate high-value patents. Even companies that have been approved to become specialized and innovative "little giants" face the above bottlenecks. It is necessary to conduct in-depth research on the characteristics, pain points and difficulties of the scientific and technological innovation needs of various small and medium-sized enterprises, and find out the paths and methods to help enterprises achieve the transformation of scientific and technological achievements and complete transformation and upgrading.

(3) Cross-border integration of industries, resource integration and reorganization

With the deep integration of high-tech and manufacturing, the boundaries and industrial forms of manufacturing are constantly changing. The cross-border integration of manufacturing and other industries has gradually become a trend.

From the breakthrough of the southern Jiangsu model, to the outward-oriented economic driving that began in the 1990s, to the accelerated development and transformation of the industrial zone economy of "industry concentration in parks" [10], Suzhou has gradually laid an extremely deep industrial foundation, has many advantageous and characteristic industries, and has the ability to achieve supporting facilities within the industrial chain. However, the interaction between industries in Suzhou still needs to be strengthened. In the modern industrial system, the boundaries of industries are becoming increasingly blurred, and cross-border integration between industries has become the key to innovation, and new business forms and new models are also produced in the integration. This is very important for Suzhou, which needs to improve endogenous motivation and find new growth points.

In addition to promoting better interaction between industries from a micro perspective, and exploring how to promote urban economic integration from a macro perspective, it should also be Suzhou’s key task in the next few years.

Suzhou needs to coordinate the development of the urban economy and enhance the comprehensive competitiveness of urban manufacturing. Suzhou has a developed economy. In the latest list of the top 100 counties in 2022, Kunshan, Zhangjiagang, Changshu and Taicang ranked first, third, fourth and seventh respectively. In terms of regional GDP, the sum of the four county-level cities even exceeds half of the city's GDP. This is not only the advantage of Suzhou's economy - it avoids the "big city disease", and the city is more efficient and more humane, but it also indirectly proves that the centripetal force in the main urban area of Suzhou is relatively weak, and the six districts and four cities are prone to homogeneous competition. For example, in the Suzhou City industrial map above, industrial parks, Zhangjiagang City, Taicang City, Wujiang District and other places have proposed to focus on the development of the biopharmaceutical industry. Only by leveraging the comparative advantages and filling in the gaps can we truly enhance the comprehensive competitiveness of the city's biopharmaceutical industry and give full play to the industrial synergy effect.

Table 7 The GDP of Suzhou districts and cities accounts for the whole city, data source: 2021 Suzhou Statistical Yearbook

How to achieve coordinated development of the urban economy under the guidance of the market's "invisible hand" and the government's "visible hand", so that the industrial economy has its own focus, thereby improving the overall supply chain scale and efficiency of the manufacturing industry is a major challenge that Suzhou needs to face in the future.

2. Suzhou's manufacturing industry leap

After years of hard work, Suzhou manufacturing has become the highlight of China's manufacturing. At present, Suzhou Manufacturing is in a critical stage of development. In order to maintain Suzhou Manufacturing's competitive advantage, cope with the challenges brought about by major changes that have not been encountered in a century, and plan for the future, Suzhou Manufacturing must leap forward on the existing basis. To this end, it can make in-depth arrangements in terms of industrial driving force, industrial breakthrough force, and industrial coordination force, and do three major articles well.

(1) Strengthen the driving force of the industry: Do a good job in "1-100" and entering "0-1"

Planning innovation is planning development, and planning innovation is planning the future. An industry driven by innovation is a vibrant industry, an industry with strong vitality and winning the future. Against the backdrop of accelerated international and domestic innovation competition, Suzhou Manufacturing must solve the links such as the lack of high-end innovation resources and weak endogenous innovation capabilities, and do a good job in the big article of entering "0-1" from "1-100".

First of all, we must focus on the construction of the innovation system. Focus on the "two ends", focus on the construction of national laboratories and major scientific facilities on the one hand, solve the source and foundation of innovation driving force, grasp the initiative and seize the initiative in cutting-edge technology fields; focus on the bridges and channels of the technology transformation industry on the other hand, solve the technology source and supply of industrial development, and inject continuous vitality and momentum into the industrial economy.

Second, we must focus on three changes in the focus of innovation:

First, "from back to forward". The focus of innovation has shifted from "applied victory" to "seeking roots and exploring the source"; from "reverse development" to "positive advancement"; from focusing on "market share" to mastering "technical sources".

At present, many domestic industries are suffering from "bottleneck" problems. Shifting from reverse development to positive development, from meeting the market and paying attention to market applications to innovation in technology sources should be the next key issue in the manufacturing industry. Suzhou has a deep manufacturing foundation and has many manufacturing companies that are capable of exploring innovation from the source.How to "from back to forward", reshape innovation concepts, improve basic scientific research capabilities, cultivate locally rooted innovation networks, and build an independent, controllable, safe and efficient modern industrial system, and achieve the transformation from efficiency improvement to value creation will be one of the important directions for Suzhou Manufacturing to win the future.

The second is "from the surface to the inside". From technological empowerment to industrial capacity improvement; from "externalization in form" to "internalization in heart", from enterprise operations to industrial core.

In the era of digital economy, local governments have vigorously promoted industrial digitalization and digital industrialization, and achieved digital empowerment and helped enterprises transform through the development of new technologies such as artificial intelligence, industrial Internet, and 5G. The "transformation" of digitalization and intelligence is to deeply integrate various new technologies into the industry, become the organic core and soul of the industry, create new principles and new processes, develop new products, and open up new tracks. Compared with many manufacturing cities across the country, Suzhou has a strong industrial foundation in the development of "from the surface to the inside" and will create a new technological engine for Suzhou manufacturing.

third is "from the surface to the foundation". From focusing on whole machine products to focusing on key components at the same time; from industrial scale to industrial foundation-based.

In the past, China's manufacturing industry often paid more attention to "industry on the ground" and its scale, but did not pay enough attention to "underground foundation" and its strength. The industrial foundation mentioned here refers to basic parts/components, basic materials, basic processes and equipment, industrial basic software and industrial technology foundation. This type of "five-based" industry is the foundation of thousands of industries. The "five basic foundations" are not down-to-earth or solid, which is the main reason why all industries suffer bottlenecks and even risks that threaten national economic security. Suzhou has a large-scale electronic information, equipment manufacturing, chemical industry and other industries, and has a group of local high-tech enterprises committed to catching up with technology. The exploration of "from surface to basic" will also become a key task for Suzhou manufacturing to enhance its comprehensive strength.

Third, we must focus on the construction of industrial innovation clusters. Gather innovative resources in industrial clusters and create innovation networks. The industrial chain, innovation chain and capital chain are organically integrated in industrial innovation clusters, continuously improve the vitality and sustainable development capabilities of the cluster, and strive to build several industrial clusters with world influence.

Fourth, we must focus on building an innovative team. In terms of introducing innovative talents, we must change the past investment promotion ideas, not only introduce them, but also take root, blossom, bear fruit, grow and reproduce. We must cultivate good soil and moisture for the growth of the innovation team in orderly competition in the industry and intellectual property protection, and create a good environment and atmosphere.

(2) Tempering industry strength: Do a good job in "D" to move towards "G" (global)

Specialized and specialized enterprises are a highlight of Suzhou's manufacturing. Many manufacturing companies in Suzhou are located in a key link in the industrial chain and are leading the industry in China. Suzhou Manufacturing has achieved a leap, and specialized and new enterprises must move from the domestic market to the international stage, and must form and continuously hone the strength to seize the commanding heights as soon as possible, and do three things: technology upgrade, business extension, and market leap.

First, it is a specialized and new technology upgrade. Over the past decade, many companies have achieved domestic substitution with their low cost advantages and even expanded to the global market, which is a kind of growth of "fatness". Once the relevant technologies are disruptively upgraded by international leading companies, these companies will soon lose competitiveness.

technology is the source of life for the development of specialized and innovative enterprises. Through technological upgrades, more new scientific and technological achievements can be transformed into products, and the technical content of products can be improved, thereby achieving a leap in products and services. Manufacturing enterprises need to strive for excellence, make products and thoroughly understand the technology, and be small and beautiful, small and refined, and small and strong.

The second is a specialized and new business extension. Regarding the limitations brought about by the professional development of enterprises, Professor Simon from Germany once pointed out that "the overall scale of the industry we focus on determines the scale of the enterprise. If a company chooses to be an invisible champion, it is to choose to be a big fish in a small pond." Professional business operations that account for 70% of the total sales revenue of a single business need to be wary of the trap of over-specialization.

Business extension can be extended from one component down to the entire system, from a product up to key materials, and from a technology to related technologies. The extension of specialization and newness is not blind expansion, but gradually eliminating technological blind spots in the field, solving the "bottleneck problems", and moving from technical expertise to the technical matrix; it is to seize growth opportunities along the upstream and downstream of the industrial chain, breaking through product boundaries, and even moving from providing products to output solutions.

The third is a specialized and new market leap. From a domestic specialized and innovative little giant, they have grown into a world stealth champion. More than 60% of my country's specialized and new "little giant" enterprises belong to the basic industrial field, and more than 70% have been deeply engaged in the industry for more than 10 years. A group of enterprises have emerged that have "make up for shortcomings", and the proportion of corporate R&D personnel has basically reached 25% [11]. However, my country's specialized and new enterprises are still weak compared with the hidden champion enterprises in Germany and Japan, including a far-reaching scale difference, a small global market share, and a low added value for product technology.

Suzhou can cultivate enterprises with outstanding main business, strong competitiveness and good growth in the "five-based" industries and other fields, guide them to become a single champion of manufacturing and an innovation pioneer in industrial clusters, and gradually move from domestic to global, reach the commanding heights, and become a world-renowned "hidden champion". When doing a good job in "D" (domestic) to move to "G" (global), specialized and new enterprises should accelerate digital transformation and be the new force and leader of industrial digitalization. Use digital transformation to achieve cost reduction and efficiency improvement, and use digital transformation to help business growth, technological innovation, and industry breakthroughs.

(3) Enhance industry synergy: Do a good job in "4+6 greater than 10" 6

First of all, make breakthroughs in coordination and coordination. Focus on promoting urban integration and do a good job in manufacturing in six districts and four cities.

Six districts and four cities need to break through administrative divisions and thinking restrictions, give full play to the role of market mechanisms, break down industrial coordination barriers, and do a good job in industrial innovation cluster layout. On the basis of "multiple blossoming" and common development, scientifically promote regional spatial structure adjustment. Under the guidance of the "invisible hand" of the market,

, give full play to the comparative advantages of the six districts and four cities, make up for their respective shortcomings, and do not blindly pursue the construction of the entire industrial chain, but form dependence and linkage with surrounding areas, reduce waste of funds and resources, promote integration and reorganization, smooth the channels for urban technology transactions and resource circulation, and achieve coordinated development of industries, so as to truly improve the entire industry The comprehensive competitiveness of the city's manufacturing industry has achieved "4+6 is greater than 10".

Secondly, we have made great efforts in connection and interaction. Give full play to the advantages of Suzhou's manufacturing industry with a wide range of categories and many characteristic industries, and explore key points that can be combined and interacted. Do a good job in linking related pillar industries and characteristic industries to build a stronger industrial chain and supply chain.

For example, automobile parts are a characteristic industry in Changshu, which is quite distinctive in automobile interior and power systems. Among them, interior parts require a lot of fiber materials, and textiles and clothing is another characteristic industry in Changshu. It can guide and explore the connection points between the automobile parts industry and the textile fiber industry, nurture and produce new industries to promote lightweight, low-carbon and environmental protection of automobiles, and realize the green coordinated development of the industry and the new characteristics of Suzhou manufacturing.

Another example, Suzhou is vigorously developing emerging industries such as nanotechnology and artificial intelligence, which can empower existing industries. The government needs to provide a better platform to promote cross-border cooperation in the industry. For example, nanotechnology can empower textiles and clothing, artificial intelligence can empower equipment manufacturing, etc.

In the context of domestic and foreign dual circulation, the integration and interaction between different industries and the coupling interaction between manufacturing and productive services are the key to improving the core competitiveness and risk resistance of urban industrial economy. Let more innovation and creativity be born on the boundaries of the industry and transform it into practice in communication and interaction.

Third, do a good job in docking and radiation. Actively integrate into the integrated development of the Yangtze River Delta led by Shanghai, and plan a larger and faster development path.

China's economic growth pole is transforming from point to surface. The high-quality development of metropolitan areas or urban agglomerations such as the Yangtze River Delta region has become an important path to build a new pattern of dual circulation at home and abroad and create a new growth pole of economic development. If Shanghai is compared to the leader of the Yangtze River Delta urban agglomeration - rich in financial resources and technological resources, and the manufacturing production links are moved out year by year, then Suzhou is the dragon neck of the urban agglomeration - manufacturing is at the core position in the Yangtze River Delta region, radiating to other regions, and is the starting point and connection point of many industrial cycles. In addition, Suzhou should become a central city serving the integration of the Yangtze River Delta, connect Shanghai's financial resources and scientific and technological resources with the real economy of other cities in the Yangtze River Delta, play a good radiation and driving role, thus forming a resource sharing mechanism and optimizing the spatial allocation of factor resources.

Suzhou has not only embarked on the path of steady development through its clear positioning in the integration of the Yangtze River Delta and its good at leveraging the advantageous resources of other regions, but also proves that coordinated development among regions can develop in a staggered manner and complement each other's advantages. In the future, we need to actively participate in the construction of the Yangtze River Delta G60 Science and Technology Innovation Corridor by accelerating the in-depth integration of concept consensus, infrastructure, resource elements, industrial economy, public services, government policies and other fields, and plan a larger and faster development path.

Suzhou explores the transformation and upgrading of manufacturing industry with a systematic thinking, and responds to the future challenges of manufacturing industry with a forward-looking vision, which is of great reference significance for many cities across the country.

Comments:

[1] "Suzhou Manufacturing Strong City, Forge ahead and Start Again", Suzhou Municipal Bureau of Industry and Information Technology

[2] https://stat.unido.org/content/learning-center/classification-of-manufacturing-sectors-by-technological-intensity-%28isic-revision-4%29

[3] The data in Shenzhen is obviously low. The author consulted the Shenzhen Bureau of Statistics and learned that there are problems of inconsistent statistical calibers.

[4] "Make full use of the opportunity of international IT industry transfer, give full play to its own advantages, build a development zone with complete facilities and adequate services, and gradually form a supporting industrial chain through investment promotion, so as to achieve sustainable and rapid development of the regional economy." Anna Grandori, Corporate Networks: Organizational and Industrial Competitiveness (2005).

[5] Wang Xiaoyan, Zheng Jingshu, "A brief analysis of the 'Suzhou model' under industrial clusters", "Economics and Management" (2007)

[6] Suzhou: Manufacturing + service "New Suzhou Manufacturing" is in full swing, https://baijiahao.baidu.com/s?id=1677886198597520488&wfr=spider&for=pc

[7] Planning a productive service industry, how can the manufacturing strong cities in Suzhou, Ningbo, Qingdao and Wuxi learn to "walking on two legs"?

https://baijiahao.baidu.com/s?id=1731352785555666215&wfr=spider&for=pc

[8] Wang Jici, "Space of Innovation, Industrial Clusters and Regional Development (Revised Edition)" (2018)

[9] Taizhou Daily, "Look at how Suzhou builds a service-oriented government (III)", July 17, 2008.

[10] Suzhou's "three concentrations" in coordinated urban and rural development: farmers concentrate in communities, contracted arable land concentrate in large-scale operations, and industrial enterprises concentrate in parks. Through the "three concentrations", the original low level and low industrial level are concentrated into the park, and then the saved land is used to develop the service industry and high-end industries.

[11] my country's specialized and new small giant enterprises have the characteristics of "5678". More than 50% of the R&D investment is more than 10 million yuan, more than 60% belong to the basic industrial field, more than 70% have been deeply engaged in the industry for more than 10 years, and more than 80% rank first in the province's market segment.