Competitive advantage in an industry cluster: The case of Dalian Software Park in China

This paper explores the competitive advantage of Chinese software parks for promoting industrial development. These industry clusters provide competitive advantage because they are rooted in local institutional systems. Taking the case of Dalian Software Park in China, this analysis is conducted qualitatively based on Porter's “diamond” model, SWOT framework and interview results. Industry clusters, which encompass a series of interconnected firms in designated geographic concentrations, show competitive advantages for industrial development with substantial resources rooted in local institutional systems including government, industry and academia aspects. In order to successfully navigate the economic paradigm shift from mass manufacturing production to innovative new product development in China, it is essential that the competitive advantages of industry clusters are strengthened and sustained in order to enhance industrial development, generate innovation and increase regional economic growth.