Upgrade Of China’s Manufacturing Industry Chain Based On Service Innovation

With the continuous refinement of international division of labor and furtherdeepening of specialization, the relation among industries becomes increasingly close.Since reform and opening up, China has participated in international competition,deepening international division of labor and cooperation and acquiring advancedtechnology and management ability, and further promoting China’s industrialupgrading as well as economic development. At present, the level of industrialstructure does not only depend on a single product, but more of a practitioner’sworking technical content and the added value level on the industry chain. In recentlyyears, China’s manufacturing industry has made rapid development since theparticipation into the international division of labor, but it is still in the low end ofglobal industrial chain, especially with the depletion of the demographic dividend andthe degradation of resources environment, it becomes difficult to maintain higheconomic growth if we only rely on low value-added production. Therefore, thearticle will explore the way how to speed up the upgrade of China’s manufacturingindustry chain in the deepening international division of labor, which is from theperspective of service innovation.Service innovation will impact both purveyance and demand to upgrade themanufacturing industry chain:(1)From provided perspective, On the one hand,service innovation affects the balance between their rate of return as a change in otherfactors of production factors, especially the relative marginal productivity of labor andcapital, so that the use of factors of production between the relative costs will bechanged, and forming the relationship of substituting, thus it will produce impacts ofupgrading the value chain. On the other hand, service innovation can reducetransactional costs and promote the deepening of specialization, increasingproductivity and efficiency of the transaction, thereby affecting the upgrade of thevalue chain.(2)From the view of demand, the role of service innovation on theupgrade of industry chain is realized by promoting changes in the structure of demand.Service innovation will bring new product design, product research, trade,transportation, supply chain management and business services and intermediaryservices, etc to change the structure of consumer demand, and the structure ofproducers, so it promotes the industrial chain upgrading. Combined with our country’s decade data, the article will make an empirical research about how service innovationpromotes the manufacturing industry chain upgrade, then drew an appropriateconclusions.There are four kinds of way about innovation service promoting the upgrading ofindustrial chain:(1) Technical process of upgrade. Through the short-term training ofstaff and the update of management processes to promote industrial chain ofproduction systems and bring the advanced technology, it will improve efficiency ofthe industrial chain, reduce costs, improve the product quality, so that, the time ofresponse to market will be shorting, and the profit margins will be increased.(2)Product upgrade. Through the introduction of new products or transforming theexisting products, the own brands will be established and maintained, so the sales rateof new products and new brands will be improved and the self’s competitiveness canalso be enhanced.(3) Functional upgrade. Manufactures rebuild their own chainsunder their own brands, or find new partners to rebuild their leadership chain. Thedesign and sales of own brands and services can enhance the market competitivenessof product in the process.(4) The chain of upgrade. The industrial chain will climb upthe other chain of higher added value through the innovation of various links ofprocesses, technology, management, the use of resources on the chain.