Research On Local Innovation And Industrial Upgrading Of Industrial Value Chain

Since the reform and opening up, China’s economy has been growing rapidly, and the industrial base has got stronger. Due to the lack of core technology and independent brands, local industry is still at the low side of the global value chain. With nowadays economy stepping into ‘the new normal state’, what different from past is slower growing speed meaning that we are faced with new opportunities, thus the continuous optimization of economic structure, the development of innovation, and promotion of opening up to a high level is coming into urgent demand. Innovation, transformation and upgrading will become the main theme of economic development in the period of ‘new normal state’. Besides, the "Made in China 2025" strategy has been put forward recently, which means that our country will make effort to transform to the manufacturing power, and focus on the upgrading of the manufacturing sector to improve innovation ability. There is no doubt that the industry makes great contributions to economic prosperity, which draws concerns of the academic field to consider the industry as the core sector with technological upgrading.Therefore, this paper takes the industrial value chain in Yangtze River Economic Zone as the research object, studies the way innovation and industrial structure changes impact on the local industrial transformation and upgrading, and the effect of space spillover in order to provide a theoretical support with the government to achieve balanced development among industries in Yangtze River Economic Zone.Based on the research purposes above, this paper systematically reviews the domestic and foreign industrial value chain analysis. Based on the industrial structure and the global value chain theory, we analyze the industrial structure from the perspective of quantity and regional industrial innovation, and analyze profoundly the situation of industrial structure and innovation activities in Yangtze River Economic Zone.Furthermore, we explore the mechanism of the route of industrial upgrading. Then, based on the theory model set up, the spatial correlation factor was introduced, and we established the spatial panel regression model considering the contribution of different sources using the 11 provinces(cities) data from 2005 to 2013. Applying Matlab7.0 software and relevant spatial tool to carry out regression analysis and empirical test of sample data, then we discussed the experimental results. The results showed that the indigenous innovation factors and the absorption and re innovation elements had a significant effect on the local innovation ability, and the effects of the industrial structure and speed had different directions. With the weight of social economic distance applying in the model, there is a significant spillover among target places.Finally, in the context of China’s economy stepping into ‘the new normal state’, we provide government with new ideas of innovative and industrial structure adjustment policies to promote industrial restructuring and upgrading. We also suggest that strengthening regional interoperability to promote coordinated development of the Yangtze River Economic Zone, plays a positive role in promoting the local industry innovation and further embedding local industry into the highly sophisticated level of global value chain.