Research On The Development Of Environmental Industry Based On Industry Life Cycle Theory And Its Application On China

Recent years, with increasing attention paid to environmental protection bygovernment, rapid development has come to China’s environmental industry.Currently, environmental industry has been identified as a strategic emergingindustry, which means it not only has to undertake the responsibility to protectenvironment, but also considered as a new economic growth point. With vigoroussupport from government, environmental industry is bound to go throughremarkable development in the future. However, the research on the law ofenvironmental industry’s development and the identification of China’senvironmental industry stage is still not enough, which make it difficult forgovernment to formulate scientific and effective industrial planning and policies,it also lays obstacles for enterprises and investors to set the appropriatedevelopment strategies based on industrial development trend. These all havenegative effects on the development of China’s environmental industry.Regarding to these problems, this study identifies the general form ofenvironmental industry life cycle by combining industry life cycle theory with theanalysis of environmental industry’s characteristics and influencing factors. It isconcluded that environmental industry’s development is countercyclical, showinga medium growth speed and mutant typed industry life cycle. There is also adiscussion on the trends of important indicators (e. g. environmental investment,output growth vs. GDP, environmental quality) in different stages ofdevelopment.Based on the data analysis of environmental industry’s development inUnited States and Japan, this study empirically verifies the theoretical deducedlaw of environmental industry’s development. The similarities and differencesbetween USA and Japan on the variation trends of industry life cycle’s relevantindicators (e.g. growth speed, domain structure, foreign export) are also discussed,the results are summed up as a valuable international experience.On this basis, the study systematically elaborates the development process ofChina’s environmental industry, analyzes the development relevant data such asenvironmental industry’s output and growth rate. The results indicate that China’s environmental industry is in the growing stage, and its development iscountercyclical. In five or more years, China’s environmental industry will stayin this stage and get accelerated growth. With curve fitting method, this researchuses scenario analysis to predicate the industry life cycle of China’senvironmental industry. It shows that China’s industry cycle time is about17-18year and the growth speed is in medium level. The formation stage of thisindustry is before2008, the growing stage is in2008-2020, and the mature stageis after2020. Combined with the theoretical deduced law and the internationalexperience, there is also a discussion on the trends of important indicators indifferent development stages of China’s environmental industry.Finally, this study analyzes the development process and current situation ofthe listed companies of environmental protection as a sample in enterprise level.It is found that the characteristics on the overall development of environmentalenterprise have strong correspondence with the industry level, which furtherverifies the conclusions of research on the stages of China’s environmentalindustry. The developments of different sub-domain are also analyzedrespectively. In addition, the research inductively analyzes the developmentstrategies of the listed companies of environmental protection. The results showthat these companies’ development directions (e.g. business content and model,concentration, export) correspond with the law of environmental industry’sdevelopment, accord with the prediction on the trends of China’s environmentalindustry, meanwhile provide some meaningful supplementary.