Jan van der Borg and Erwin van
Tuijl
Upgrading of Symbolic and Synthetic
Knowledge Bases: Analysis of the
Architecture, Engineering and
Construction Industry and the
Automotive Industry in China
ISSN: 1827/3580 No. 25/WP/2011
W o r k i n g P a p e r s D e p a r t m e n t o f E c o n o m i c s C a ’ F o s c a r i U n i v e r s i t y o f V e n i c e N o . 2 5 / W P / 2 0 1 1
ISSN 1827-336X
Upgra di ng of Sym bol i c and S ynt het i c K no w l edge B ases: Anal ys i s of t he Archi t ect ure, Engi neeri ng an d Co n st ruct i on i ndust ry an d
t he Aut om ot i ve I ndus t ry i n C hi na.
Jan van der Borg
Department of Economics, University Ca’Foscari of Venice Erwin van Tuijl
IHS and RHV, Erasmus University Rotterdam
Abstract The degree and the w ay of upgrading d iffer w idely per indu stry. This art icle t ries
to give some new in sights in these d ifferen ces by linking th e conce pt of upg rad ing to tha t of the knowledge ba se. M ore ove r, we try t o ident ify b ar riers to upg rad ing as well a s t he app rop r iate spat ia l sca le o n which u pgr adin g takes place, aga in fo r diffe rent know ledge bases. We sup po rt ou r a rgum ent by an aly sing the p ro cess of upg rading in two indust rie s in China: the AEC indust ry (in Beijing and Sh ang ha i) an d the automotive indust ry (in Shan gha i). W ith in the se indu strie s we focu s on u pgr adin g o n two le ve ls: with in f irm s a n d within pr ojects. Ou r f inding s fo r both industr ie s sug ge st that the pr inc ip al w ays of upgr ading of the symbo lic kn owledge b ase are jo int br ain st orming in inter na l and exte rn al pro ject teams and labou r mo bility. Major facto r s that hin der the upgrad ing of symb olic know ledge inc lude the development stage of China, the Chine se educatio na l sy stem and tension s about duplicat io n of wester n de sign s. Upg rading of the sy nthetic knowledge b a se take s mainly place via inte r- company t ra in ing p ro gr ammes of for eig n firms, tech no lo gy tran sfer and lab our mo bility on the lo ng ru n. A po ssib le b ar rie r fo r upg rad ing of synthet ic kn owledge, espec ia lly in the automot ive indust ry , is that fore ign firms tend to keep certa in eng ine er ing activit ies in the ir home ba se bec ause of the r isk of know ledg e lea kage. Howe ver, this is c ha ngin g qu ickly a s ma ny fo re ign ca r ma ker s and th eir supp lie rs in vest in e nginee ring cent r es in Ch ina due to an in crea sing demand fo r c ar s, to gove rnment al regu lation s a nd to inten sifyin g compet itio n.
Keywords Urban development, upgrading, automotive industry, AEC industry, knowledge economy, China.
JEL Codes L2, R00, R3, O3
Address for correspondence:
Erwin van Tuijl
IHS and RHV Erasmus University Rotterdam Burgemeester Oudlaan 50 – Room H12-31 3062 PA Rotterdam, NL Tel +31 (0)10 4081578 e-mail: vantuijl@ese.eur.nl
This Working Paper is published under the auspices of the Department of Economics of the Ca’ Foscari University of Venice. Opinions expressed herein are those of the authors and not those of the Department. The Working Paper series is designed to divulge preliminary or incomplete work, circulated to favour discussion and comments. Citation of this paper should consider its provisional character.
1. Introdu cti on1
Chin a is on e of t he fast es t growi n g economi es o f th e wo rl d. The eco nomi c drago n is alread y th e s eco nd l argest econom y i n the wo rld . Sin ce 19 80, the average an n ual GDP growt h was 8%, real GDP growt h quadrupl ed in th e 1980 -2001 p eriod (Li and Ob erh eit mann, 2009), and b etween 1985 -2 005 its ex ports ros e from $5 0 billi o n to $7 98, m aking i t the wo rld ’s l arges t tradin g n atio n (Kapli nsk y and M es sner, 200 8). Besides ‘qu ant itativ e’ gro wt h of th e econom y, C hin a increasin gl y ai ms to reali se ‘qu alit ati ve’ growt h, expres s ed in its ’ ambi tion to ch an ge from t he mere ‘m ad e in Chi na’ to ‘d esi gn ed and devel op ed in Chi na’. Therefore, it in vest s heavil y i n R &D an d hum an capi tal and has v ari ous st rat egi es t o ‘up grade’ i ts econo m y. In fact , it s annual spendin g on R &D has increas ed more th an 20 % sin ce 1999 , and in 200 5, i t reach ed 1.3 % of th e GDP from 0.7 % in 1998 (Wilko nsdon and Keel e y, 2007 ). Alread y i n 20 06, i t took over J apan t o beco me t he wo rld ’s largest i nv esto r in R &D (Gereffi, W adh a & R isin g, 2006).
A ke y con cept to anal ys e ‘quali tat i ve d ev elop ment’ i s up gradin g. Up gradi n g was fi rst introdu ced in busi nes s literatu re, wh ere up g rading is anal ys ed within in divi du al firm s (Po rter, 199 0; Kaplins ke y, 2 001), and th e t echno lo gi cal up gradin g an d th e technologi cal capabilities ap proach (e. g. Lall , 19 92; Bell and Pavitt, 1992 ) whi ch pa ys at tentio n ho w local s uppl iers i n d ev elo ping co unt ri es increase t echn olo gical skills i n o rd er to su ppl y t o gl ob al m ark ets. Nowad a ys , it i s a comm on con cept in regional econ omi cs as well , wh ere i t is used t o an al ys e up gradi n g of indust ri al clust ers in sert ed wit hin gl ob al v alu e ch ains and p ro du ction netwo rks (e.g. Gereffi, 1999; Hu mph re y & S chmitz; 2002; Giuli ani et al. , 20 05; C oe et al, 20 04 S chmi tz, 2 0 04).
Up gradin g h as b een discuss ed i n man y empiri cal en th eo retical studi es. M ajo r fi ndi n gs includ e th at in man y cases the d egree of up gradin g is limit ed t o p ro cess and p rodu ct u p gradin g (e. g . Coe et al, 2 004 ). Wi del y dis cuss ed has b een th e gov ern an ce in Glob al Valu e C hai n s (GVC ) and Glob al Productio n Net wo rks (GP N) as an ex pl anati on fo r t h e degree o f upgradin g (e.g. Gereffi, 19 99 ). It i s al so acknowled ge that t he d egree of up gradin g differs p er ind ust r y (Guil iani et al , 20 05 ). Howev er, less wid el y i nsi ght s hav e b een gi ven how th e proces s of up gradin g di ffers p er indust r y. We ai m to fill t his gap b y
linkin g th e co ncept s of upgrad ing wi th kn owl ed ge b as es. Therefore, we add ress th e following m ai n questi on: How does
upgr adin g ta ke p la ce regar ding t o diff er ent knowl ed g e bas es ?
In oth er wo rd s, we will show h ow upgradin g m echanism di ffer per k no wled ge b as e. In additi on, we will giv e som e n ew insi ghts i n th e maj or up grading d ri vers and b arri ers as well as the sp ati al s cale on whi ch upgradi ng t ak es pl ace for di fferen t knowled ge b as es .
The con cept o f kn owl ed ge b as es h as been us ed to anal yse differen ces i n th e geo graph y o f in novation for different indus tri es . Th ere are three t yp es of kn owl ed ge bas es: an al yti cal (s cien ce b as ed ), s ynth etic (en gineerin g bas ed) and s ym bo l ic (aest h etic b as ed ) k n owl ed ge base (As heim and Gertl er, 200 5; Ash eim and C oenen, 2005; Ash eim et al, 2006 ). The domi nant kno wled ge b as e di ffers p er i ndustr y as well as p er proj ect stag e in produ ct d evel opm ent process es , and can thus b e u sed as a suit abl e tool to an al ys e how up grad ing d iffers p er in dust r y and withi n p rod uct d ev el opm ent proj ects . We argu e th at differences in kn owl ed ge b as es are d ep end ent fo r th e wa y o f up gradin g.
We hav e tri ed t o an al ys e t h e upgradi ng process o f th e s ym bol ic and s yn t heti c k nowl ed ge bas es in t wo in dust ri es in Chi na: t h e aut omoti ve in dust ry in Sh an ghai and the archit ect ure, en gin eerin g an d co nstruction (AEC) indust r y in Beijin g and Shan gh ai. Chin a is an ex t rem el y i nteresti n g cas e, not onl y fo r its up gradi n g ambiti ons in both m an ufacturi ng in dust ri es (like aut omoti ve) as well as i n creativ e ind ust ries (e. g. archit ect ure), but al so b ecaus e of a powerful st at e that can influ en ce global-local i nteraction and thus it mi ght st i mulat e up gradin g of Chin es e fi rms b y west ern fi rm s. In add ition, t he co n cept of kno wled ge b as es h as been co nst ru ct ed with evid en ce from dev el op ed co unt ri es, an d th ere is a need t o s ee if th e argum ent s also hol d in in dust ries and citi es in devel opin g eco nomi es (Ch amin ad e, 20 11 ).
The p ap er h as been struct ured as follo ws. S ect ion 2 d is cuss es the co mpl ex relat io nship s b et ween di fferen t kn owl ed ge b as es and up gradi n g an d tri es to lin k the s . In s ectio n 3 th e case studi es will be i nt ro duced and th e res earch m ethod ex plain ed . In th e empi ri cal part of the paper (s ectio ns 4 and 5), we des crib e th e t wo cas es an d the princi pal result s regardi n g t he process o f up datin g, whil e in the las t section (s ection 6) we draw s ome final conclus ions and give polic y im pli cat ions and direction s for further res earch
2 Up grading and kn owledg e ba ses 2.1 Wha t is upg radi ng?
The co ncep t of up gradin g st ems fro m busines s literatu re (Porter, 19 90; Kaplins k y, 20 01 ) an d the t echn olo gical up gradin g an d th e techn ologi cal capab ilities ap proach (e.g. Lall , 199 2; Bell and Pavitt , 199 2 ). Th e first app ro ach an al ys es up gradin g wit hin i n dividual fi rms , whil e the l att er focus es on how l ocal s upp li ers in d evel opin g cou ntries increase techn olo gi cal skills in o rd er to sup pl y to glob al mark et s. Up gradin g can b e d efi n ed as “m akin g b ett er produ cts , m aki n g them mo re effi ci ent , or movi n g into m ore skill ed acti viti es” (Schmitz, 2 004 , p1 ). Gereffi and Th an (1998) m ention t hat indus tri al up gradi n g incl ud es organizat io nal learni n g n eeded t o improv e th e posit ion of fi rms o r n atio ns in intern ati on al trad e net wo rks . Simil arl y, Humph re y and S chmitz (2 002 ) sp eak abo ut activit ies whi ch en able fi rm s in dev elo pin g coun tri es to com pet e on th e gl o bal level. Thes e act iviti es, in clud in g th e increase o f sk ill co n tent of th es e fi rms and th e mov e t oward s niche m arkets wit h ent r y barri ers, are s imilar to the p revious definit ions . Fou r t yp es of u p grading are distin guis hed: p ro cess up gradin g (usi n g m o re effi cient p ro du cti on p ro cess es ), prod uct up gradin g (makin g hi gher val u ed products ), fu nction al up gradin g (doi n g hi gher ad ded functi ons , lik e R &D an d d es i gn inst ead o f produ cti on) and int er-s ectoral up gradin g (fi rm s mov e into n ew pro duct activi ties) (Humphre y an d Schmit z, 2002 ). Ho wever, t his t yp olog y can be crit icis ed as th e di fferen t t yp es are relat ed wit h each oth er, and t h erefo re, in man y cas es it is diffi cul t to dis t in gui sh th em s eparat el y (Pont e and Ewart, 2009 ). Fo r in st an ce, the u se o f LEED certi ficati on in t he AEC indus tr y, wh ich fo rces const ruct ors to us e sust ai nabl e buil ding mat eri al s and t o buil d en erg y efficient bu ildin gs, in cl ud es b ot h pro du ct as well p ro cess u p grading at th e sam e tim e. Mo reo ver, empi ri cal resul ts are mixed. In m an y cas es t he degree of up gradin g is limit ed to proces s en and prod uct upgradi n g (e. g. Coe et al., 2 004 ) and upgrading in p racti ce is o ft en mo re diffi cult to reali se than i n theo r y ( Lorentz en an d Barnes, 2004 ).
In con cept ual terms , up gradin g h as been link ed with vari ou s oth er con cepts th at deal with the geograph y of in nov ati o n, incl udin g cl ust ers (e. g. Gi uli ani et al, 20 05), regi o nal innov ati on s ys tem s (e. g. Vang an d Ashi em, 20 06 ), GVC (e. g. Hump hre y and Schmitz, 2002; Gereffi et al ., 2005; Gi uliani, 2005 ) and GPN (Ernst and Kim, 2002; Coe et al ., 2004). However, it is not li nked with the concept of knowl edge bas es yet . We argue t here i s a need to do so, in order t o give i nsi ght s
in di fferences in t he up grading process of d ifferent ind ust ri es and with in p rod u ct d ev elopment proj ects. Before d oing t his , we first ex plai n t he di fferen t knowled ge b as es i n m ore det ail . 2.2 Kn owledg e bas es
The con cept o f k no wled ge bas es (Ash ei m an d Gertl er, 20 0 5; Ash eim an d Co en en, 2005; Ash eim et al, 2007; M ood ys so n et al, 200 8; Gertl er, 2 008; As heim and Hans en , 2 009 ) presu m es that t here are v ari ations i n the geo graph y of in novati on for different firm s and indus tri es . Thus , it is possi ble to an al yse the rol e of p rox imit y fo r innovat ion. Th e domi nant knowl ed ge bas e di ffers p er ind ustr y. There are three t yp es o f kn owl ed g e bas es: an al yti cal (sci en ce bas ed), s yn theti c (en gi n eerin g based) and s ymb oli c (creat ivit y b as ed) knowl ed ge. Th e k no wledge bas es di ffer in th e wa y o f learni n g; the mix of t acit and codifi ed kno wl ed ge; codifi cation pos sibiliti es; i nno v atio n barri ers, req ui red qu ali fi cati ons and ski lls; innovati on ch all en ges and pres s ures; and comm uni catio n modes used an d the rel ev ant sp ati al s cale o f in teract ion .
The kno wl ed ge b as es hav e b een d ealt in v ari ous co ncep tu al an d empi ri cal st udi es . In a concept ual wa y, th e k no wledge bas es have b een link ed wi th regional i nnovat i on s yst ems (Coenen et
al., 200 4; Ash eim and Coenen, 200 5; 2006; Co en en et al .,
2006 ), th e comm u nication m od es face-t o-face an d bu zz (As h eim et al, 20 07 ; Van Tuijl and C arval ho, 200 9) and t h e creativ e cl as s (As h eim and Hans en, 2 009 ). Empi ri call y, t he kno wled ge b ases h av e been test ed i n different ind ust ri es biot echnol o g y, food and ICT realms (e.g. Ash eim et al ., 2 007 ; Mood ys so n et al., 2008; Mood yss on, 2008; Gertl er, 2 008 ), el ect ro ni cs, furnitu re (Asheim and Coenen, 200 6), car d esi gn (Van Tuijl and Carv alh o, 2009) an d the medi a ind ust r y (Mart in and Mo od ys so n, 20 1 0). With ex ception o f t he l att er two, mos t of th e an al ys ed ind u stri es rel y o n the s ynth etic and an al yti cal kno wled ge b as es an d not on t he s ym bo lic on e. Sim ilarl y, i n thei r stu d y th at li nk s kno wledge bas es with th e creativ e class, Ash eim and Hans en (200 9) anal ys e several jo b fun cti ons , but onl y o ne o f th es e (‘writ ers and creativ e or p erfo rmi n g arti sts ’) rel ies on th e s ymb o lic kn owl ed ge b as e. Moreov er, this is t he onl y st ud y t hat co mp ares t he s ym b oli c kn owl ed ge bas e with th e oth er t yp es . S ym bo lic, just lik e s ynt heti c, kno wl ed ge pl ays also a cru cial ro l e in t he aut omoti ve in dus tr y and t he arch itect ure, en gin eerin g and con structio n indust r y. An al yt ical kno wled ge –t hat is especi all y relevant in s cience bas ed indus tri es (such as bio-t echnology)- pl a ys a maj or rol e in earl y stages o f innovation process es, whi ch are oft en done in ‘the West’ an d J ap an, b ut is assum ed les s rel evant in our case
studi es. Th erefo re, we fo cu s on the s ymboli c and s ynt heti c kno wled ge bases and li nk t h es e k nowled ge b as es with t he con cept wit h up gradin g. In order t o do so, we firs t dis cuss thes e two k nowled ge bases in more d et ail .
Syn th eti c knowl ed g e bas e
The s yn th eti c k no wl ed ge base is domi nant in en gin eering b as ed indus tri es , su ch as t he aut omoti ve i ndus tr y, ship buil ding an d machin er y ind ust ri es. It i n cludes economic acti viti es where innov ati on t ak es pl ace b y ap pli cation or new combin atio ns of ex istin g k nowled ge. Kno wl edge d ev elop ment t ak es pl ace in an indu ctiv e p ro cess i n order to s olv e p robl em s an d ai ms to ans wer t he ‘k no w how questio n’. T yp ical acti viti es in cl ude trail-an d-error p rod u ctio n, experim ent s, custom producti on an d com put er-b as ed sim ulati on, and th e out come of th e kno wl ed ge dev el opm ent p ro ces s is hi ghl y con cret e an d visibl e, for inst an ce in t he form of protot ypes . Ex ampl es are t he dev el opm ent of n ew shi ps, adaptation of cars for sp ecific mark ets an d ch an gi n g machi n es for oth er appli catio n s. Altho u gh t he kno wled ge is partl y co difi ed , th e domi nant kno wled ge t yp e is t acit and is b as ed on kno w-ho w, craft an d practical s kills . Coo peration fo r th e s yn t heti c k no wled ge b as e tak es o ften place between di fferent d ep artm ents of a fi rm (for inst an ce b etween t h e m arketing depart ment an d p ro du ction) and wi th sup pli ers and cus tom ers. Uni versit y coo peratio n t ak es also pl ace, but con cerns m ainl y coll abo rat ion i n th e fiel d of dev el opm ent and ap p lied res earch.
Symbol ic knowl ed ge bas e
The s ym boli c k no wled ge base h as b een d ev eloped for t he cult ural ind ust ri es, such as medi a, advert isin g, d esi gn and fashio n, whi ch gai n impo rt ance and wh ere competit ion is increasin gl y b as ed o n th e ‘s i gn valu e’ o f (i nt an gi bl e) bran d s inst ead o f th e us er-v alu e o f t angi bl e p roducts . It s acti viti es are innov ati ve and d esi gn in tensive and are relat ed to aest het ic att ribu tes of produ ct s, creat ion of desi gn s an d im ages and t h e econo mic use of v ari ous form s of cult ural art efacts . Innov ati on tak es pl ace t hro u gh the recom bin ation of ex istin g k no wledge i n new wa ys an d kn o wled ge d evelo pm ent is a creative p ro cess whi ch impli es reusi n g or ch all en gi ng ex istin g con vention s. In st ead of an swerin g th e know-how q uestion , kn owi n g who is rel evant in th e s ymbo lic kno wl edge b as e. Kno wled ge dev el opm ent is b as ed on learni n g-b y do in g, an d t ak es o ften place i n p roj ect team s in stu dios . Learnin g t ak es als o place vi a interact ion with the profes sional com munit y (for i nst ance duri ng fairs and events) and ‘border’ professi onal comm uniti es . ‘Underground’ (st reet and yout h) culture pl ays also a m ajor rol e i n l earning, just li ke ‘fi ne’ cult ure. Simil ar t o
the s yn th eti c k no wl ed ge b as e and because its st ron g cult ural emb ed dedn ess , kn owled ge has a s trong t acit comp on ent and is bas ed on craft, practical skil l and s earchi ng skill s. The kno wled ge inv olv ed is incorpo rat ed and t ransmitt ed in aesth eti c s ym bol s, i mages, desi gns, artefacts, s oun ds, si gn s and narrati ves with stron g s emioti c knowl ed g e con tent.
Tab le 1 provi des a s ummar y of th es e two kn owl ed ge b as es . It shoul d be n oted that the kno wl edge b as es are stereot yp es an d that i ndus tri es in realit y are dep en dent on co mbinati ons o f all three kno wl ed ge b as es. Therefore, there is roo m fo r d eb ate and it is dep end ent on the pu rp os e o f t he indivi du al studi es i n whi ch kno wl ed ge b ase indust ries are cat ego ris ed . For inst an ce, Ash eim an d Hans en (2 009 ) cl assi f y architecture as s ynt heti c kno wled ge, b ut con fess th at archit ect s rel y on a com binati on of s ynth eti c and s ym b olic k no wledge. Th e domi nant kn owl edge bas e also differs p er t yp e of archit ecture and per st age in t he arch itect ure d esi gn pro cess . In t he b egi nnin g, th e conceptu al desi gn stage, con cept d esi gners pl a y a majo r rol e an d rel y mostl y o n artist b as ed knowl edge, while in l at er s tages engin eerin g d esi gn ers and consult an ts gai n import an ce with t he fo cus o n en gin eerin g b as ed kn owl ed ge. Simil arl y, th e aut omoti ve ind ust r y is m ainl y an en gin eeri ng b as ed indust ry (Mo od ys son et al, 2008), but s ym b olic kno wl ed ge gai ns impo rtance, an d th erefore Van Tuijl and C arv alh o (2 00 9) unp ack th e car desi gn proces s in order t o anal ys e the int erpl ay bet ween s ymb oli c and s yn theti c knowled ge bas es . In thi s art icl e, we p a y at ten tion t o process es of up gradin g in fi rms as wel l as in project s t hat deal with the d evel opm ent of cars and buildi n gs . We anal ys e ho w upgradin g of th e s ynth eti c and s ymbo lic kn owl ed g e b as es actu all y t ak es place, and p a y att enti on to p ossi bl e b arri ers that ma y hind er up gradin g of thes e two k nowled ge bases.
Table 1 Differen tia ted knowl edg e bases
Synth eti c Symboli c Ratio nale o f
kno wled ge creati on
Appl yi ng o r
com binin g existin g kno wled ge i n n ew wa ys ; know h ow
Creati n g m eani n g, desi re, aest het ic qualiti es, affect, intan gib les, s ymbols, images:
know who
Wa y o f kno wl edge devel opm ent
Probl em sol ving b y experim ent ation and
Advanced desi gn bas ed on vi rtual
tri al-and-error; cust om producti on
ex peri en ce and art isti c s kills (creativ e process ) Wa y o f learnin g
and act ors in volv ed
In t eractiv e learni n g with custom ers an d suppl iers
Learning-b y-doi n g in st udio , proj ect teams
Kno wl ed ge ch aract eri sti cs
Ex perience based practical/t echnical kno wled ge; stron g tacit com pon en t; contex t s peci fi c
Kno wl ed ge ad apt ed to
co gnitiv e insti tut es (e. g. percepti on ); impo rtance of interpretation , creativi t y, cultu ral knowled ge, si gn val ue; st ron g contex t s peci fi cit y
Meanin g Various
subst ant ial l y bet ween pl aces
Hi ghl y v ari abl e bet ween pl aces, cl ass an d gend er Main
comm uni cation mod e
Face-to -face interact ion
Buzz and face-t o-face i nteraction Spati al con fi gurati on of interact ion Mainl y l ocal , alth ou gh gl ob al rel ati ons are als o rel evant
Lo cal and
temporar y l ocal
Bas ed on : Ash eim a nd Hans en (2009 ), Ash eim et al (2 007 ), Gertler (20 08 ), Mar tin an d Mood ys son (2010 ); Van Tuij l an d Carvalho (200 9 )
2.3 L inking knowl edge b as es wi th upg rading
The con cepts of kno wledge b as es an d up gradi n g have vari o us thin gs in commo n, maki ng it p ossi bl e t o lin k t hem . Both d eal with m aj or issu es in the economi c geo graph y li terature, s uch as innov ati on, l earni n g, k no wledge creation, t rans fer an d abs orptio n. The k nowl edge bas es deal wit h knowledge creatio n, d evel opm ent and us e, and criteria for s uccess ful out com es, and th e s t rat egies t o turn knowledge i nto innovati on to promot e competi tiveness (As hei m, Boschm a and Cooke, 2007 ). This is ex act l y t he core of upgrading, whi ch refers t o
‘inn ov atin g to i ncreas e valu e added ’ (Giuli ani et al, 200 5, p522 ). Up gradi n g i ncl udes acti viti es of fi rms i n d ev elo pi ng cou ntries to imp ro v e t hei r pos ition in i ntern atio n al n et works and in clu des th e in crease of s kill co ntent of t hese fi rms and the mov e to ni che m arkets wit h entr y barriers (Hump hre y an d Schmitz, 20 02 ). Furth ermo re, m aj or con ditions t o reali s e up gradin g o f fi rm s in developi n g count ri es are b esid es con necti on t o glob al net wo rks , that firms h av e su ffi ci ent abs orptiv e cap acit y and receive polit ical suppo rt to ex ploit t he ben efits of netwo rk parti cip ation (Ernst and Kim , 20 02 ). Thi s requi res th e int erpl ay b et ween di fferent acto rs in t he pro cess of creatin g, t ransmitti n g and abs orbing kno wled ge, whi ch is on e of th e m ajo r asp ects in t he concept of kn owl ed ge bas es (As h eim, Bos chm a and Co ok e, 200 7).
Moreo ver, both co n cepts hav e been u sed to link global wit h local d ev elo pments. Kno wl ed ge bas es ex plore th e geograph y of innov ati on an d th e rol e o f prox imi t y, whil e up grad in g inv esti gat es t he rol e of local suppli ers i n devel opi n g countri es in Gl ob al Val ue C hains (e.g. Gereffi , 19 99) and and/ or glo b al pro du ctio n netwo rk s (e. g. Ern st and Ki m, 200 2; Co e et al ., 2004 ). Fi nal l y, th e d egree of up grad ing d ep end s on th e t yp e of chain gov ern an ce (e. g. Hump hre y and S chmitz, 2 002; Gi uli an i et al ., 200 5) and t he t yp e of i ndus tr y (Gi uliani et al. , 20 05 an d Piet rob elli an d Rabellotti, 2005). Th e k nowl ed ge bases fo cus on th e di fferences b etween ind ust ries, and th erefore, we argue that t he co n cept can fun cti on as a us efu l tool to anal ys e th e wa y o f up gradin g p er in dust r y in mo re d etail.
To s umm ari se, b ot h con cepts d eal wi th the geograph y of innov ati on. Up gradi n g is narrowl y rel at ed with i nno v atio n. Morris on et al (20 08 ) q u estio n wh ether up gradi n g is a s ynon ym of i nno vati on or t he result of it. Co nfus ion m a y als o becom e cl ear from Guili ani et al ’s d efiniti on (2 00 5, p5 52 ): ‘Innovat ion to in creas e val ue added’. Kaplins k y et al (2 005 ) sho w t hat innov ati on d o es no t necess ar y l ead to u p gradin g as competit o rs can b e mo re inn ov ative, and thus, up gradi n g can b e s een as rel ati vel y inn ov ativ e performance. So, up grading is equal to innov ati on as lon g as it gen erates hi gher value add ed . Cru ci al fo r inno vation (and thus fo r up gradi ng) is the acquis itio n of new kn owl ed ge an d skills . An i mpo rt ant questio n is n ew for whom: a sin gle fi rm, a region or cou ntr y, the worl d or a sector (Dahlm an, 20 08; Althenbu rg et al , 2008)? In oth er wo rd s, up gradin g can o ccu r on di fferent sp ati al scales: wit hin fi rm s, withi n ent erpri se net works, wit hin l ocal or nati onal economi es and wi thin regi ons (Gereffi, 1999), and more recent l y withi n val ue chains and bet ween clust ers (Oliver et al , 2008). New t o a sect or is eq ual t o inter-s ect oral upgrading i n whi ch case
curren t skills and kn owl ed ge hav e been appli ed in other secto rs (Humph re y and S ch mitz, 200 2). Regardin g th e newness to a region (o r coun tr y) or th e wo rl d, it is useful to disti ngui sh three di fferent sou rces of innov ati on . Th e fi rst i s th e acquis itio n of tech nolo g y an d skill s whi ch al read y ex ist abro ad. A seco nd i s dom esti c creatio n o f new knowled ge. The third is t he effecti ve use and d iss eminati on o f n ew kn owl edg e thro u gh out t he l ocal econom y, wh ether it has been im po rt ed from ab ro ad or creat ed lo cal l y (Dah lman, 2008).
Up gradin g is not eas y ( Lorentzen and Barn ess, 20 04 ) an d variou s condit ion s n eed to b e met t o realis e up gradin g. Fi rs t, local firms n eed to be con nect ed wit h net works of glob al operatin g fi rms . Ho wever, t his i s not a suffi ci ent con ditio n, as local firm s als o n eed to have s uffi ci ent abs orptive cap acit y t o hav e access to new k nowl edge and capabi lities (Ernst and Kim , 2001 ). In additio n, the degree of up gradin g d ep end s on ho w firms o rgani se l earnin g and innovatio n activities in t heir organiz ati ons an d how t he y empl o y speci fi c region al and nati on al ass ets. ( Is aksen and Kal saas , 2 009 ). For the l att er, it is imp ort an t th at ass ets of local s upp liers and glob al op erati n g firms are compl ement ar y (Coe et al, 2 004 ). Mo reov er, gov ernm ents are abl e to set developm ent and up grad in g cri teria in cas e the y have control ov er uniq ue l ocal ass ets, whi ch i s also k no wn as obli gated embeddedn ess ( Liu and Di ck en, 2 006 ). Second , p oli cies an d lo cal in stitut es are requi red t o su ppo rt local firm s in ex plo itin g b enefits t hat s tem fro m int eractio n with gl ob al o peratin g fi rms (Ernst and Kim, 2 001 ). Fi nall y, oth er facto rs t hat i nflu ence upgrading are t h e t yp e o f ch ain gov ernance (Hump h re y and S chm itz, 2 002 ) and t he t ype of indus tr y (Gui liani et al, 2005).
Moreo ver, and as an ex plan ation for di fferen ces i n u pgradin g bet ween indu stri es , we argue th at the wa y o f up gradi n g is dep en d ent o n th e k n owl ed ge bas e used. Knowl ed ge b as es differ in th e wa y o f l earnin g; th e mix o f t acit and codi fi ed kno wled ge; codi fi cation possibil iti es; barri ers, qu ali fi catio ns and s kills; in nov atio n chall en ges and p ress ures; an d comm uni cation m od es us ed and th e rel evant s patial scal e of interact ion (s ee t abl e 1 ). Di fferen ces in thes e el em ents ex pl ain how (and wh y) u p gradi ng d iffers per knowl ed ge b as e. Esp ecial l y, di fferences i n t he wa y o f l earnin g an d th e p ro ces s of kn owl ed ge dev elopm ent are import ant for an al ys is o f up gradin g.
S yntheti c kno wl edge devel ops vi a a proces s of probl em solvi n g, t ri al -and-error product ion and experim ent ation, and learnin g t akes pl ace via i nteractive communi cat ion with
suppl iers and custo mers, while s ym boli c kno wl ed ge h as been con structed vi a a creati ve brai nstorm process an d learni ng tak es pl ace vi a learnin g-b y-d oing i n stu dio project t eams. On the j ob t raini n g and face-t o-face con tacts are cru ci al for learnin g in archit ect ure fi rms due to t he high tacit com ponent of k no wl ed ge as it i s em piri call y sh own b y a recent stud y o f Kloo sterm an (201 0).
In last th ree s ection s, after d et ailin g our res earch m etho d in sectio n 3, we sh o w empiri cal evid ence t hat s upp ort ou r argum ent; i .e. we show how t he up gradi ng pro cess of t he s ynth eti c k no wled ge bas e di ffers from t he s ym bol ic on e. The empi ri cal evi den ce con sists of two cas e stud ies i n whi ch we an al ys e th e p ro cess of upgradi n g in t wo indust ri es in Chi na: the AEC i ndu st r y (in Beiji ng and S han ghai) and th e aut omot i ve indus tr y (in S han gh ai).
3 Selection of th e Cas es (Automoti ve and AE C in Beijin g and Shangha i) and theRes ea rch Method
The d at a fo r thi s p ap er have b een gath ered th rou gh int ervi ews that were con du ct ed in Beijin g and Shan gh ai d uri n g t wo intern ati on al co mp arativ e res earch proj ects and a retu rn vi sit t o Chin a for t his art icle speci fic. The fi rst proj ect concerns a stud y to ward s th e d ev elo pment of m anufact uri n g i n a gl ob al-local p ersp ectiv e wi t h a cas e st ud y of th e autom otiv e ind ust ry in Sh an gh ai (Van W ind en et al , 2010; Van Tuij l et al, 2 011 ) The second pro ject is a st ud y towards the rol e of d esi gn i n citi es wit h a cas e st ud y of th e dev elop ment of (archit ectu re) desi gn i n Beijin g (Van der Bo rg an d Van Tuijl, 201 0; Van Tuijl and Van d er Bo rg, 2011).
Aft er th es e stu di es, Shanghai was visit ed again i n o rd er t o gat her d at a for bot h the autom otive as well as th e AEC indus tr y. In additi o n, more d at a for t he AEC in dust r y was gat hered i n Holl an d b y vi sits of two co n gress es as well as fi ve add ition al int ervi ews wit h int ernatio nall y operat in g archit ect s. Mod ern Du tch d esi gn is worl d famo us and man y o f them are clus tered i n th e Rot t erdam and Amst erdam regio ns wh ere t here are al so v ari ous s peci alis ed ins titut es (s ee Kloo sterm an 2 01 0). Man y archit ect s o p erat e on an int ernatio nal s cal e and are als o invol ved in p roj ects in Chi na.
In tot al, sixt y t hree i ntervi ews were conduct ed of whi ch twent y seven in t he autom otive indust r y, twent y ei ght in the AEC indus tr y and ei ght in other creative fi rms . The int erviews each took b et ween one and two hours and we foll owed a s em
i-stru ct ured in tervi ew sch edu le fo cuss in g on the d ev el opm ent pro cess o f cars respecti vel y bui lding s or n ei ghbo urhoo ds (st ages o f th e p ro cess; acto rs in volv ed and th eir t asks ; locatio ns o f activit i es; t ype of workers us ed ); d riv ers an d barri ers for devel o pment; HR poli c y and t raini ng; linkag es with uni versi ties, oth er firms an d lo cal an d hi gher gov ernm ents . We did n ot au diot ape the int ervi ews for con fid enti alit y reas o ns, bu t not es were tak en duri n g and aft er the in tervi ews. Add ition all y, all quot at ions h ave b een m ade ano n ym ous to protect th e p rivac y of th e i ntervi ewees .
The op en ch aract er of th e i nt erviews gave ris e to un ex pect ed info rm atio n and yi elded impo rt ant new insi ght s. We cross -check ed ou r res ults with th e int ervi ewees b y sendi n g t hem b y e-m ail a prelimi nary ‘fi ndin gs report ’ and an al ys ing t heir comm ent s o n t he und erst andin g o f th e rat ional es and mech anism s i nvol ved in the an al ys ed up grading p ro cess es . Moreo ver, we tri an gul ated and com plement ed t h e int ervi ew dat a wit h oth er s eco ndar y s ou rces , like s ci enti fi c pub licati on s, press rel eases, co rporat e repo rts , po lic y do cum ents an d info rm atio n from m u ltipl e comp an ies’ websit es.
A comp arativ e case stud y b as ed on i nterviews was cho sen t o inv esti gat e wa y o f u p gradi ng and dri vers of vari ous k no wled ge bas es . Comp arativ e studi es m ake it pos sibl e to incl ud e man y different entit ies, an d thus coul d give in si ghts i n th es e entiti es via co mp arati ve an al ys is (J ens en an d Rod gers, 2 001 ). Th is art icl e deals wit h d ifferent entit ies (e.g . regi on al v s. gl ob al; different act ors; differen t stages in the d ev elopment pro ces ses of n ew produ cts ; di fferent i ndus tri es ) an d thus a comparat iv e an al ys is is suit ed to serv e o ur goals. Case st ud y res earch is a research m etho d th at deals wit h ‘how’ and ‘wh y’ q uestion s abo ut cont em po rar y ev ent s ov er whi ch the res earch er h as no con tro l. Vi a cas e studi es a researcher is abl e to cover con tex tu al cond itio n s (Yi n, 1994 ) and t o und erstand caus e an d effect rel ation shi ps (J ens en and Rod gers, 20 03 ) in real -l ife interv ent ion s that are too com plex for a surve y or ex perim ent al studi es (Van Win den , 2003). Th ere are man y different vari abl es and act ors with own st rat egies which in flu en ce each oth er an d can h ave different in flu ences on regional up gradi n g. Comp arativ e cas e st ud y research is s uit ed to gi ve insi ghts i n to this compl ex web o f sev eral actors, rel at ions and vari abl es and thus to serv e o ur go al to get i nsi ghts in the wa y o f up gradi n g of differen t k nowled ge bases.
The autom otive and AEC i ndustri es have been select ed as cas e studi es both are proj ect bas ed indus tri es dealing with complex pro ducts whi ch cannot be developed b y one s ingl e actor alone.
Cars an d buil din gs (or n ei ghbourho ods) canno t be full y stan dard is ed and gl obal concepts need to be ad apt ed to local circumst an ces (su ch as regulation s, mark et req ui rem en t s, clim at e, et c) an d thus req uire a global -lo cal int eractio n bet ween v ariou s s t ak eho lders as well as b et ween various kno wled ge b as es . In o rder to give insi ghts in t he wa y of up gradin g o f di fferent kno wledge bases in both ind ust ri es we intervi ewed en gi neers as well as des i gners and s pok e wit h different proj ect p art n ers in cludin g l ead archi tects , po li c y mak ers, univ ersit y p ro fessors, CEOs and local m anagers of car ass emb lers, car s up pliers and en gineerin g fi rms and oth er indus tri al ex p ert s. Additional l y, ei ght i ntervi ews were con du ct ed wit h fas hion desi gners and artis ts in order t o increase ou r und erst and in g of t he d ev elopment of the s ym b ol ic kno wled ge b as e i n China. The autom ot ive i ndustr y h as been an al ys ed in Sh an gh ai as i t is t he l argest aut omoti ve cl ust er in Shan gh ai with a rap i d developm ent th at has had attentio n in a large n umb er of oth er studi es d ealin g wit h governance, poli c y, up gradin g, l earn in g and develop ment in a glo bal -local persp ectiv e (e. g. Li u and Di ck en, 200 6; Thun, 20 06; Van Tuij l et al, 2 011 ). In gen eral , Sh anghai is a m odern fast growi ng and open cit y wit h man y int ernational link ages m akin g it interestin g to an al yse urban d evelo pm ent in a global-l ocal persp ectiv e, esp eci al l y in k e y proj ects li ke Pud on g (e.g. Ch en, 2007 ). This makes the ci t y als o suit abl e to anal ys e up gradin g of differen t kn owl ed ge bases in the AEC ind ust r y. This indus tr y is also anal ys ed in Beiji n g, as t he capi tal i s con sid ered as on e of th e glob al cit ies wi th th e most archit ect s (Knox and Ta yl o r, 2005 ) and th e p roximit y t o th e st ate gov ernm ent has so me adv antages fo r the develo pment of arch itect ure du e t o fast decisi on makin g, im pl ement ation o f plans, access to fi n an ci al resources an d develo pm ent of k e y proj ects for wh ich fo rei gn ‘st archi tects’ have b een i nvit ed (Van Tuijl and Van der Bo rg, 2011). Thi s makes it i nt eresti n g to stud y up gradi n g of di fferent k no wledge bases in a global-local p ersp ectiv e. In the nex t two s ections , we anal ys e t he up gradin g mech anis m and d rivers and the spati al s cale on whi ch up gradin g t ak es p lace for di fferen t knowl ed ge bases i n our case st udi es o f the AEC res pecti vel y and aut omoti v e indus tr y.
4 Upg radin g kn owledge bas es i n the a rchi tectu re, engin eerin g, and co nstruction (AEC) industry
The arch itect ure, engi neering and constructi on (AEC ) indust r y dep ends s tro ngl y on s ymbolic and s yntheti c knowl edge bas es. Especial l y fo r archi tectu re s ym boli c knowl edge is cruci al i n
com peti tion whi ch i s largel y b as ed on hi gh con cept inn ov atio n (Kl oost erm an, 2 008 )2. As put forward b y a Chin es e di recto r o f a leadi n g Dutch en g ineerin g and desi gn comp an y: “Desi gn is decisi ve; we win co mpeti tion s alwa ys o n desi gn.” Howev er, for the realis atio n o f th e final p ro du ct, t h e s ynt het ic kno wl ed ge bas e is at l east as i mportant: ‘Th e archi tectu re’s con cept mu st be m ad e po ssibl e b y a st ru ctural engin eer’ (M cNeill, 2 005a, p503 ).
The AEC ind ust r y is a pro ject bas ed indust r y whi ch us es different firms in a tem po rar y m ul tidis cipli nar y project organi sation in o rd er to deliv er cus tom buil t and uniqu e pro du cts (Kamara et al, 200 2). Arch itect ure, th e creati ve p art of th e in dus tr y, differs in s ev eral wa ys from ot her creati v e indus tri es . Fi rst , th e prod uct is famous i nstead of th e art ists in a fi el d wh ere s el f p ubli cit y is not s oci all y accept ed. S econ d, unlik e pai ntin gs an d s culpt ures , the pro du ct is in credib l y com plex d ue to m an y act ors involved in th e d esi gn process (e. g. arch itects , en gin eers , cli en ts and p oli c y mak ers), cust om er req uirem ents, an d a long co nst ru ctio n p eri od (M cNeil, 200 5a). Th is is als o dubbed b y Larso n (1 993 ) as the ‘h et eronom y o f th e archit ecture p ro fessi on ’ meanin g t h at arch itects wo rk on behal f of clients inst ead of b eing free art ists . Cli ents are ver y div erse and dispersed, an d as con sequ en ce, u nlik e oth er glob al operat ion s ervi ce ind ust ries, like adv ertisi n g, architectu re fi rms d o not fo llo w cli ent s b y openin g o ffi ces ev erywhere, but travel arou nd. Thi s is kno wn as th e p henom en on of th e ‘mobile archi tect who is con st ant l y trav ellin g to visit proj ect s ites and cl ient s’ (Faul conbrid ge, 2009 , p 254 0)3
2It should be noted that only a part of the companies focus on innovation. Many other firms tend to compete on
service or on price while innovation is low (Kloosterman, 2010).
. This is n eeded i n o rd er t o commu ni cat e wit h cli ents and to put embedd ed glob al architecture i n t he lo cal con tex t (Faul con brid ge, 2009). Ev en glo ball y op erating ‘sta rchit ect s’ su ch as Fost er or Koolhaas are restrict ed b y l ocal issu es (McNeill, 2 0 05a). C on cepts, li ke sk ys crap ers, can b e export ed to oth er lo cation s, but t he desi gn proces s is heav il y infl uenced b y co nt ex tual fact ors, like p olic y, cl imate, cli en t requi rements, cu ltu re and av ail abl e resou rces (McNeill, 2005 b): “Archit ect ure is a ski ll which yo u can ap p l y ev er ywh ere. Th ere are hou ses in Green land, t he No rt h Pol e, Holl an d and Bel giu m. The di fference is in laws an d t h e
3 Note that is only true for specialised architecture firms. Architecture and engineering consultancy firms in
contrast are highly globalised with offices all over the world. For instance, DHV Group has 73 offices in 21 countries and Arup has even over 90 offices across Europe, North America, Australia and Asia (company websites).
bureau crati c p ro cess. Also un derst anding of th e lo cal contex t is impo rtant; yo u have to know where t h e s un is and whi ch is t he shado w sid e” (Dutch archit ect ). Anoth er Dut ch archit ect st at ed: “Tak e fo r i nst an ce the us e of bri cks. In Holland th e us e of bri cks fo r indo or as well as outdoor walls is quit e comm on ; whil e th e us e o f bri cks in Engl and is not done as it is ass oci at ed with hou s es for the po or wo rk in g class ”. Simil arl y, as not ed b y a Chin es e archit ect abo ut th e concept of eco-citi es: “Al l ou r p roj ects are t ail or-m ad e p ro d ucts . There is a hi gh dep en d en c y of lo cal reso urces and the wish es o f cli ent s di ffer per cas e. Eco-citi es can th erefo re n ot s impl y be copi ed from oth er pl aces .”
The compl ex it y o f th e p rod uct, th e need t o put glob al con cept s in local cont ex t and the int eraction bet ween lo cal and glo bal operatin g acto rs as wel l as t he m ultidi s cipli nar y an d proj ect bas ed ch aract er of the AEC in dust r y h av e imp act on where innov ati on t ak es pl ace, which act ors are i nvol ved, an d on up gradin g as we sh o w in thi s case.
Ke y requi rem ents for up gradi ng are learning and kno wl ed ge man agem ent and transfer b et ween di fferent actors . Kno wl edge man agem ent in th e AEC ind ust r y t akes pl ace on two l ev el s, withi n indiv idu al fi rms (or fi rms n etworks) and b et ween firms (Kam ara et al, 20 02) esp ecial l y bet ween fi rms in p roj ect organi sation s wh ich is imp ort ant for int er-o rganis atio nal coll ab orati on and l earnin g ( Lov e et al, 20 04). As we h av e s een in sectio n 2, up gradi n g can tak e place at different level s (e. g. Gereffi, 19 99 ). W e use th es e t wo lev el s - wit hin fi rms an d bet ween fi rm - to an al ys e how up gradi ng di ffers fo r t h e s ynth eti c and s ym boli c knowl ed ge b as e. In ad dition, we discuss co ntex tu al facto rs that i nfl uence the wa y of up grad i n g in th e AEC ind ust r y in Chi na.
Upgr adi ng wi thin fir ms
There are two im po rt ant wa ys on whi ch u p gradi ng can occur o n firm lev el . Fi rst , bot h fo rei gn bas ed arch itecture com pani es i n Chin a as well as Chi nes e comp anies mak e us e of multi cul tu ral desi gn teams in wh ich Chines e archit ects learn t o wo rk i n teams and to ex press thei r creati vit y. Th e Chines e cultu ral an d edu catio nal s ys tem d iffers from west ern edu catio n s ys tems and there is l ess att enti on to ex press creat ivit y. As n ot ed b y a Germ an pri ncip al archit ect: “The p robl em is th e l ack of own ideas. C hin es e st ud ents are not t rain ed t o ex press own i deas . . .. We giv e t hem the opportunit y t o do thi s vi a brai nst ormi ng in proj ect t eams, al thou gh som etim es it remai ns diffi cult ”. Similarl y, an Italian pri nci pal archit ect put forward: “In our office it is crucial to work together and to learn from each
oth er. Thi s h app en s mainl y vi a brainst ormin g in project t eams aimin g to get id eas. We tr y to in crease creativi t y vi a v ario us com peti n g proj ect t eams ”.
Chin es e fi rms als o work wit h mult icu ltural t eams and h i re fo rei gn archit ects to brin g new creativi t y an d wo rki n g meth ods . As ex pres s ed b y a C hines e di recto r of a const ructio n com pan y: “M an y C hin ese firm s hire fo rei gn archit ects to do joint p roj ects. Th ey are also using forei gn ers as t eachers. Chin es e proj ect partn ers learn from fo rei gn architects b y con tinu ousl y raisin g qu esti ons and b y o bserv ati on ”. It shoul d be not ed th at forei gn d esi gners are al so used b y C hin es e fi rms in order to win p ro jects as m an y cli ent s still prefer forei gn arch itect ure. Acco rd in g to an It ali an p ri nci pal architect: “ It is so eas y to get p roj ects; onl y m y face sel l s”. An archit ect fro m anoth er It ali an stu di o no ted: “We al wa ys visi t cli ents wi th a team of forei gn ers and Chines e peopl e. This is not b ecaus e the Chin es e cann ot do the job, b ut becaus e the cli ent ex pect s fo rei gn ers”. Th e us e of forei gn archit ects in Chin es e o ffices mi ght also h av e a d o wnsi de as the d ep en denc y o f forei gn ers is oft en l arge. As an Aust ri an archit ect wo rking for a leadi n g Chin es e archit ectu re fi rm n ot ed: “ I d o n ot want to b e arro gant, but th e fact th at we won a majo r int ern ational co mp etition in Can ad a is largel y d ue to m y work and some ot her forei gn arch itects ”.
On th e job t rainin g seems to be l ess rel evant fo r archit ectu re firms th an for en gin eeri n g fi rms . As express ed b y a Chi nes e arch itect: “Trainin g of archit ects is not s o important. It is no t a matt er o f go od or bad archit ects, but t h ey s impl y need t o fi t in yo u r st yl e”. In a similar wa y a m an ager of a Chi nese arch itect ure en gin eerin g firm p ut fo rward: “Th e best mom ent to hi re archit ect s i s wh en th e y leav e uni versit y. In thi s s tage, the y are s till fres h and hav e fres h ideas.” He co ntinued th at this is a large cont rast with engineers: “The y <en gin eers> are, I woul d nearl y s a y, usel es s wh en the y h ave fi nish ed th ei r stu d y and are l earnin g on th e jo b. This is a lon g and ex p ensi ve learnin g p ro cess, and t herefore we want to keep th e b est en gin eers ”.
A s econ d wa y in whi ch upgradi n g i n firm s ma y o ccu r i s vi a the organi sation of stud y t ri ps abro ad. St ud y t ri ps are cruci al t o get ins pirati on from di fferent places, to obs erv e oth er st yl es and to meet fu tu re cl ient s. As expres sed b y th e vi ce di rect or of a Chi nese establi shment of a Dut ch archit ect ure and engineering consu lt anc y firm: “We al wa ys invi te Chines e coll eagues and cli ents to visit best practices i n Holl and. W e show what is poss ible and explai n how proj ect planning
wo rks ”. Simil arl y, an archit ect of a leadin g C hin es e arch itect ure firm ex press ed: “W e want t o do m ore proj ect s i n Europ e. We want to learn from oth ers and t herefore we organi se st ud y tri ps t o Berli n and pl aces i n Denm ark ”.
Anot her m aj or up gradin g m echanis m is l abo ur mobi lit y. Archit ectu re, ju st l ike o ther creati ve indus tri es i s stron gl y proj ect b as ed and h as a hi gh j ob rot ati on (Vinodrai , 200 6). This labou r mobi lit y is im po rt ant fo r learnin g and as provi der of n ew so urces o f in spirati on (Kloost erm an, 2010 ), an d is thu s crucial to gain s ymb olic knowl ed ge. This labou r m obilit y h as a stro n g i nt ernati on al ch aract er. Both fo rei gn as well C hin ese arch itect ure st udio s wo rk with i nternat ional d esi gn t eam s to mix ideas. For ins tance, a m aj or Chin es e archi tect mention ed that n earl y h al f of t he empl o yees is foreign which h elps t o get new ins pirati on and to win com petitio ns abroad. Simil arl y, man y fo rei gn offi ces hav e Chi nese archit ect s i n o rd er to und erstand t he l ocal cont ext: “W e have one C hin es e d esi gn er who is proj ect l ead er of all ou r proj ect s in Chin a. Sh e speaks the l an gu age an d k nows ho w t o d eal with C hin es e cli ent s” (Dutch archit ect ). M an y Chines e archit ects s tud y and wo rk or stud y abroad as “New Argon auts ” (S ax enian, 2 007 ) and retu rn to th eir hom e cou nt ry t o work for Chin es e o ffices or start t heir own bus in ess. M an y success ful Chines e archit ect ure fi rms hav e prin ci pal s who stu di ed ab ro ad.
Upgr adi ng wi thin sp ecifi c pr oj ect s
The d omin ant kn owl ed ge bas e, t he act ors invo lv ed an d t he way of up gradi n g di ffers per proj ect st age. Th e fi rst st age4 con cern s cli ent o rient atio n, i n whi ch architect s m eet cli ent s an d o bs erve the b uildi n g p lot i n order to get knowl edge o f th e local con tex t. Th es e m eeti n gs n eed t o b e at t h e spot and the acto rs meet face-to -face to p revent mis com muni cat ion and fo r cult ural reas ons: “The l argest risk of do in g bu sin ess i n Chin a is losin g yo ur face. Therefore, we m eet cli ents and part ners ph ysi call y” ( It ali an prin ci pal archit ect ).
The s econd st age is concept d esi gn, whi ch can be done ev er ywh ere and ‘d esi gni ng at a di st an ce’ i ncreasingl y t ak es place (Fau lconb rid g e, 2009; Munck, 2 009 ). Th e kn owled ge
4 The stages of the product development process in the AEC industry emerged out of our research data and
bas e is m ain l y s ymb olic and obs erv ation is t he cruci al t ool t o get ins pi rati on. C reativit y st em s fro m wat chi n g movi es, bro wsi n g th e intern et, book s an d magazi nes , trav ellin g arou nd and ob serv ati on of co mpetitors, client s and oth er creativ e indus tri es . As ex press ed b y a Dut ch archit ect: “We h ave ant en nas ev er ywh ere … It is a ‘p ro fessio n mad ness’; we do n ot wo rk from 9. 00 h rs to 17.00 h rs ”. An other Dutch archit ect not ed: “S ci en ce fi cti on has becom e the h eart o f archit ecture. It com bin es s ci en ce with fi ctio n. I lov e it ”. Simil arl y, as a repres ent ati v e of a Chin es e archit ectu re firm not ed ab out t h e roo f o f a l arge m us eum: “Th e id ea o f architect X com es from a movi e in which h e s aw a dom e that p ro t ects again st v iruses”. Acco rdi n g to an It al ian p rincip al archit ect: “Desi gners n eed to trav el aro und to get inspi rat ion and t o see oth er cultu res and trends .” Du e to a relativ el y low l ev el of creativit y o f Chin es e arch itects and th e h igh image o f west ern archi tects , concep t desi gn h as b een mainl y d on e b y west ern archit ects whil e i n fu rth er st ages Chin es e desi gners and archit ect s pl a y a m ain rol e as well: “Fo rei gn desi gn ers are resp onsi bl e for t he brilli ant id ea; th e y mak e s ure how t he buildi n g l ooks lik e” (Di rector Ch in es e const ru ction fi rm). Moreo ver, cost reas ons do m att er i n th e s el ection of th e act ors invol ved in different stages : “Fo rei gn archit ects are oft en mainl y s el ect ed i n the con cept s tage. Th e fee o f forei gn ers is too hi gh fo r oth er stages ” (archit ect Chin ese institu te). The onl y wa y u p gradi n g ma y take pl ace in this st age is v ia jo int b rainst orm in g i n intern ati on al p roj ect team s wit hin firm s as we h av e d es crib ed earli er.
In furt her st ages -s ch em ati c desi gn, desi gn d ev elo pment and cit y d ocum ent atio n- there is a conti nuou sl y int erpl a y between s ymbo lic and s yn th eti c knowl ed ge b as es. In the wo rds of a Dut ch arch itect: “We are real d esi gn ers, b ut we also h av e eno u gh tech nol o gi cal kn owl ed ge; t his is needed t o comm uni cate wit h con sult ant s”. Al l acto rs, cli ents, poli cy mak ers, cons ult ants , archit ects, engi neers, meet each oth er in ord er to brain sto rm and wo rk out plans resulti n g i n con cret e con struction d rawin gs that are us ed as a m an ual in t h e con struction stage. Fo rei gn acto rs are obli ged t o work wi th local in stitut es b y law: “W e are forced to coop erate wit h Chin es e partn ers to get licences . There are m an y different licen ces for differen t constru ction works , like buil din gs in t he ch emi cal ind ust ri es, headquart ers, bri d ges, et c. Th erefo re we hav e man y l ocal partners ” (Chi nes e di recto r o f Dut ch en gin eering consult anc y fi rm ).
Glob al i deas and l ocal knowledge are brought toget her i n proj ects . Mutual l earning t akes pl ace vi a joint brainstorming
and via t he ex ch an ge o f docu ments and pro pos als b y lo cal institu tes. C reati ve desi gn and pl an ni n g o f l arge co mpl ex proj ects are o ften done b y forei gn companies, wh i le engin eerin g wo rk and d etai l desi gn are the work of C hin ese experts. Chi nes e en gineers and co ns ultants have a large und erstandi n g of th e local co nt ext an d st ron g engi neerin g facili ties: “Lo cal i nstitut es , like Ton gj i Univ ersit y, h av e mod ern t est l ab s wit h the newest tech nol o gi es. I wis h we had such facilit ies in It al y” ( Italian princi pal archit ect ). Ho wev er, dep en din g th e charact eri sti cs of a proj ect and requi rements of the cli en t, en gin eeri n g work can als o be don e abroad . As p ut fo rward b y a Dut ch archit ect abou t a p roj ect dealin g with a new h yd raul ic co ncept: “ In th is proj ect we u sed a Du tch kno wled ge in stitut e as it i s wi del y accepted to have a Dut ch wat er certi fi cate. In other cas es , we us e lo cal sp eci ali sts t o obt ain t he ri ght certi ficat es ”
The fin al st age, th e const ructi on stage has n earl y al wa ys b e don e b y C hin es e co nstruction fi rms, alt hou gh west ern firm s still sta y inv olv ed in the proj ect unti l the fi nal p ro du ct is finis h ed. Du rin g all st ages, from concept d esi gn u nt il con struction , v ari ou s fo rei gn firm s co op erat e wit h lo cal fi rms as it is obli gat ed b y law. Chi nese pol ic y mak ers use int eracti on bet ween fo rei gn an d local fi rms as upgradin g m od e to l earn new con cept s and worki ng met hods. Moreover, l ocal insti tut es that ch eck propo sal s act as ‘gatekeepers’ b etween lo cal an d fo rei gn fi rms b y pas sing docum ents between th e acto rs. No rmal l y sp eaki n g, there are n o int ell ectual p ropert y ri gh ts (IPR s) on archit ectu re desi gns, thi s oft en l eads t o dupli cati o n of o ri gi nal wo rks . Althou gh m an y int ervi ew p artn ers agree abo ut t en sion s aroun d du pli cat ions, s om e have a mil der view: “It is p art of t he game; it happ ens ev er ywh ere. It als o happ ens at hom e <i n Holl an d>. ” (director of a Dut ch archit ecture and en gin eerin g co nsult ant ). M an y agree abo ut t he n eed of a dupli catio n st rat egy to cat ch up qui ckl y. However, a dupli catio n st rateg y ma y lead to lo wer pro du ct up gradin g as desi red as o ft en i t is not pos sibl e t o cop y ori gin al wo rk s due t o the l ack of th e s am e const ruction mat eri al s or fin an cial restri cti ons . Mo reo ver, a dupli cati o n strat egy h ind ers dev el opm ent o f creat ivit y as it impli es us in g stand ard sol ution s inst ead o f creati n g n ew ones .
Cont ext ual fa ctor s th at infl u ence upgra di ng
In add itio n to t he is sue of du plicati on, t here are s ev eral other fact ors that m a y l i mit the extent of upgrading. There are especi all y m an y barri ers that hinder the devel opm ent of creativi t y and t hus on up grading s ym boli c knowl edge. A m aj or barri er is t he devel opm ent st age of t he countr y. Economi c
dev el opm ent h as p ri orit y and desi gn h as been consi d ered as a lux ur y p ro du ct. Man y cli en ts h ave limi ted budgets, an d n eed to fo cus o n co st s avin g and choos e for sim pl e sol ution s inst ead o f innov ati ve archit ect ure. Fo r inst an ce, as express ed b y a Chin es e archit ect: “Fo r p roj ect X, we want ed t o us e t he Gaudi st yl e, but aft er sev eral studies the cli ent d eci ded t hat the mat eri al s were t oo ex pensive. So , in t h e end ot her m at erials were cho sen, and t h e p lan chan ged from a uni qu e t o a regul ar buildi n g. ” Th e focus on comm erci al valu es al so influen ces the edu catio nal s yst em as in man y art studi es , lik e archit ectu re, th e most at tentio n has been p aid to art busin ess , inst ead of dev el opm ent of creativi t y. R em ark abl y, th e focus o n co st savi n g l eads in som e cas es t o do wn gradi n g o f west ern fi rms, as man y fo rei gn d esi g ners are att racted to Chin a, esp ecial l y Shan gh ai, for m arket reaso ns. The y need to ad apt th eir beh av iou r to t he wis hes of t he cli ent s an d need t o focus mo re on b usi ness an d commerci al val ues i nstead o f aest het ical val ues : “Wh en we mak e con cept s in S han gh ai, t h e wi sh es of the us er are central. Therefore, th e fi rst drawin gs are alread y in an adv an ced st age. Thi s is a m ajo r differen ce from th e st art of o ur com pan y in Venice, wh en we st arted wi th v er y abst ract drawi n gs ” (It ali an p rin cip al archit ect ). Or t o us e t he t yp olo g y of C ox e et al, (198 6; in Skl ai r, 20 05 ), m an y firm s ch an ge fro m ‘st ron g id ea firms’ to ‘st ron g servi ce firm s’ and fo cus on busin es s in the firs t place in stead o f deli verin g i nno vativ e arch itect ure. Fu rth ermore, tim e p ressure hind ers developm ent of creativit y: “W e h av e a l ack o f time, althou gh we need t o trav el aro und t o see oth er cultu res and trends. We need to ch an ge th is. M a yb e we can go t o J apan as thi s is not s o far” (It ali an p rin cip al architect ).
Besid es cost savin g, time pres sure and cli ent requirem ents in general are cruci al i n develo pm ent of th e produ ct, n ot onl y in the earl y st ages of t he p roj ect, but als o in lat er st ages: “The inv esto r can tak e all deci sion s and can revis e concept s com plet el y This is a major di fferen ce with Eu ro p e, wh ere desi gn i s d esi gn. Thi s is somet hing where you keep yo ur hands off” (di rect or C hin es e const ru cti on fi rm), and “Asi a an d Europ e are two ex trem e worlds. In Euro pe, th e cli ent p rovi d es an ex ten siv e a thi ck package of papers wi th req uirem ent s in t h e cli ent o ri ent atio n st age. In C hin a, th e initi al input from t he cli ent is l imit ed, s a y on e page. Other req uirem ents in China are gi v en i n furth er st ages . The y chan ge ever yth in g; in the en d yo u r id ea is comp l et el y gon e” (Aust ri an arch itect ). Fi nall y, local regul ati ons m a y hinder upgrading. As express ed b y an It alian pri n cipal architect: “S ee for inst ance t he us e of bamboo. In It al y it is all owed to us e bamboo as construction m at eri als and it has been t est ed int ensivel y. In Chi na, the use of bam boo
is still fo rb idd en . In stead t he y use comm on st eel construction s and ad d fak e b amb oo aft erwards.” Thu s, regulat ions , bud get restri cti ons and al so ris k avers e behavi our o f cli ents hi nders up gradin g in terms o f th e us e of new met hods and m at eri als.
Upgr adi ng kn owl edg e b as es i n t he AEC i ndust ry
From t his cas e stu d y, some maj or con clusio ns can be d rawn regard in g up gradi n g. Fi rst , d ue to th e dev elo pment s tage o f the cou ntr y, u p gradin g i s oft en li mit ed to catch u p to b as ic l ev el s. So, in nov ati on is oft en rest ri cted t o ‘n ew to C hin a’, whil e ‘n ew to the worl d’ in nov ation has been done elsewh ere. S econd , d ue to p roj ect b as ed ch aracter o f t he i ndu str y, a k e y m echani sm for upgradin g is jo int b rains tormin g. This is true for bot h the firm level as well as for p roj ect l evel, and i ncl udes fo rei gn acto rs as wel l as lo cals. Mo reov er, i nteraction between fo rei gn ers and Chin es e has b een sti mulat ed b y t h e gov ernm ent in the form of obli ged co op erati on bet ween fo rei gn archit ects and dom est ic institu tes, o f whi ch the lat ter t rans fers co di fied k nowled ge amo n g v ari ous Ch ines e pl a yers. Th e joint b rai nsto rmi n g incl ud es a cont inu ou s int erpl a y bet ween the s ymb oli c and t h e s ynth eti c kno wl ed ge bas e. Onl y, the fi rst stage of a proj ect, the con cept stage, m ainl y s ym boli c knowl ed ge pl a ys a rol e. Thi s stage h as largel y d one b y forei gn arch itects, whil e i n C hi na there are s ev eral b arri ers to develop s ymbolic kn owl ed ge. Chin es e archit ects l earn from thei r foreign coll eagu es vi a t he menti on ed brai nst ormin g in proj ect t eams. Man y archit ectu ral firms have bo th fo rei gn as wel l as C hin ese archi tects an d labour m obilit y i s a ke y mech anism for the developm en t of s ymbo lic kno wl ed ge. S yn theti c kn owl ed g e dev elo pment has for a large p art been d one b y local acto rs, altho u gh fo r sp ecific proj ects als o fo rei gn sp eci alist can be us ed. Up grad ing
know ledg e b as es i n t he aut omo tive indust ry
The d ev elo pm ent and up grad ing p ro cess of th e C hin ese aut omoti ve ind ust r y, es p eci all y in th e Shan gh ai regio n, h as been wid el y di scuss ed in lit eratu re. Man y stud ies sho w th e impo rtance o f the go vernm ent stru cture th at steers t he devel opm ent o f th e local autom otiv e ind ustr y (e.g Th un, 2 006 ); joint -v ent ures as v ehicl es fo r technol o gical transfer an d fo r techni cal an d p ro ces s learni ng (e. g. Dep ner and Bat helt, 200 5; Dicken 200 7); d ev el opm ent of in nov ati o n s ys tems (e.g. Gu et al, 200 9; Van Tuij l et al, 2011), po wer rel ati ons bet ween fo rei gn multi nation als and th e C hin es e governm ent ( Liu and Dicken, 20 06 ). These and m an y ot her studi es show st ro n g pro du ct, p ro cess, and s ometim es ch ain and fun ctio nal upgrading as well, alth ough oft en ke y investm ents and bas ic research is still concent rated in the home bas es of forei gn multination als due t o the fear of knowledge l eakage. Many studi es focus on technologi cal upgrading, whi ch is often ver y
much rel ated wit h t he s ynth eti c knowl ed ge bas e. Cru ci al for up gradin g of t he s yn th eti c knowl ed ge bas e is o n th e j ob trainin g o f Ch in es e en gineers , which t akes pl ace i n Chi na as wel l as ab ro ad. Thi s is b en efici al for t he forei gn fi rms - whi ch pro vid e t he t rai nin g- as well as for Chi n ese j oint v ent ure fi rm s. On th e lo n g run , t his effect is ev en larger d ue t o l abo ur mobilit y as m an y Chin es e wo rk ers return to Chi n es e firms (Van Tuijl et al, 2 011 ): “Esp eci all y st at e fi rms are p opul ar empl o yers n owad a ys . Th e y can o ffer m o re than west ern fi rm s: a hi gh er s al ar y an d mo re jo b s ecurit y. Back ed b y th e st at e, thes e fi rms can si m pl y o ffer more … ” (Man ager joi nt -v entu re firm).
In t h e auto motiv e in dust r y, l earni ng in proj ects is cru ci al for both d ev el opm ent of s ym bol ic as well as for s ynt het ic kno wled ge. Thi s h appens via int eracti on b etween fo rei gn and Chin es e act ors and can be don e in Chin a o r ab ro ad , alth ou gh more and mo re R&D activi ties h av e b een do ne i n Chin a. In add ition , regardin g dev el opm ent o f s yn theti c kn owl ed ge an d techni cal up gradin g, we h ave s een th e im port an ce of on-th e-jo b trainin g, whi le ob serv ation is a m ajo r mechanism to d ev el op s ymbo lic kn owl ed ge. Finall y, regardin g t he s ym bol ic kno wled ge th e case also s hows that the location of act iviti es differs p er t yp e o f d esi gn. Con ceptual d esi gn, whi ch has b een don e in an earl y st age o f the devel op ment p ro cess o f a n ew pro du ct, can be do n e on distance; it can be do ne b y ever yb od y at all pl aces . In cont rast, st yli n g (o r int erior) d es i gn is stron gl y dep en d ent on th e Chin es e co ntex t an d is mainl y do ne b y Chin es e desi gn ers. However, it s houl d be not ed t hat this is esp eci all y t he cas e fo r car m ak ers that us e a regi on al ad apt ati on st rat eg y, such as GM and VW do. For car m ak ers that foll ow a gl ob al car st rat eg y, ad apt ation to th e lo cal con tex t is onl y mi ni mal and st yl in g desi gn has been d on e b y gl ob al desi gn centre (Van Tui jl and C arvalho, 200 9).
In gen eral , literatu re als o stres ses a nu mber of lim its to t he ex tent of u p gradin g. Des pit e hi gh invest ment s in R &D, st ri ct gov ernm ent poli ci es for t echnol o g y t rans fer an d a qui ck dev el opm ent o f a po ol o f engineers, resu lts o f t h es e effo rts are still un cl ear (Al tenb urg et al, 2006 ). In addi tion , it mi ght be questio nable wh et her forei gn comp ani es inv est in R &D and edu catio n t o ful fil gov ernm ent regulat i ons or as a strat egic inv estm ent to im pro ve t he kn owl edge b ases in Ch ina, as m an y com panies still fear knowl edge l eakage (Depn er and Bath elt, 2005; Van Tuijl et al, 2011). As an intervi ewee not ed: “I rem em ber that Chinese em plo yees of VW were sent to Germ an y for traini ng, but wit hout res ult. The y had the feeling t hat the y went on holida y” (in dust ri al expert ). M oreover, t ensi ons about
desi gns an d IPR ’s bet ween Chin es e and west ern car (part ) mak ers hi nd er u p gradin g: “A maj or prob lem fo r Chines e firms is the hi gh costs o f IPR ’s . Chin es e fi rms are still v er y m uch dep en d ent o n wes tern fi rms ” (un ivers it y pro fess or). Tensi on s abo ut d esi gn hin der esp eciall y develo p ment of the s ym bol ic kno wled ge b as e, whi ch can often not be p rot ected b y IP R’s. Les s att enti on has b een s ho wn t o u pgrad in g o f di fferent t ype s of k no wl ed ge. W e anal ys e this vi a investi gation o f di fferen t proj ect st ages fo r t he d ev elopment of new pro du ct. In t h e stages , we anal ys e which knowl edge bas e are rel ev ant , where it has b een don e (Ch i na or ab ro ad), whi ch act ors are inv olv ed, thei r tasks and th e ex tend up gradin g is possi ble. It is n ot possi ble to gen eralis e our fin din gs as it depend s on th e strat egy of th e in divi du al car m ak er wh ether cars are com plet el y desi gn ed fo r a sp ecific m ark et or a global car con cept has been used in all mark et s with onl y limit ed ad apt ati ons to ful fil cou ntr y s peci fi c reg ulati ons and conditi ons (such as ro ads and clim at e).
Upgr adi ng wi thin pr ojects
The first st ages of t h e car desi gn process - pre-d esi gn st age an d con cept d esi gn- are dominat ed b y the s ymboli c k no wl ed ge base (s ee al so Van Tui jl and C arv alho, 2 009 ), aimi n g to get inspi ration fo r n ew car m odels and the d evel opm ent of th e fi rs t draft s. Obs erv atio n and joint brai nst ormi n g are th e m ain mech anism s t o get i nspi ration . As put forward b y a m an ager from S AIC -GM: “W e s ee wh at competitors do, we n eed t o beat them .” Simi larl y, t he di rector of a SAIC research cent re ex press ed: “We get inspi ration fro m wat chi n g com petitors an d brains to rmin g in th e team.”
The lo catio n o f th es e fi rst stages, as well as th e responsi ble acto rs and th e wa y of up gradin g differs per cas e. SA IC -GM organi ses i ntern al co mpeti tion s in which Chines e d esi gn t eam s com pet e with west ern teams. Bas ed o n governm ent regu lat io ns and sp eci ficati ons given b y the comp any, t he team s d eli ver propos als in o rd er to conti nue th e p ro ject. In som e cases , con cept d esi gn h as even been sourced ou t to speci alis ed d esi gn firms. So, co ncept d esi gn b y SA IC -GM can be don e abroad o r in Chin a, an d can b e done b y forei gn , Chin es e or b y mix ed desi gn t eams. Simil arl y, SA IC Mo tor Tech nical C ent re has man y fo rei gn emplo yees which jointl y wo rk on n ew concepts with Chi nese coll eagu es . Als o SMA, anoth er Chin es e car mak er, hires western desi gners to increas e the l evel of creativi t y of the firm and to l earn how to des i gn cars . Hence, wo rking in mixed proj ect team s eems t o be a m ajor mode to learn new st yl es. In other cas es, Chi nese desi gners s eem to
hav e a sm all er rol e i n the desi gn : “The Chi nese h av e no infl uence to ad apt desi gn; we need t o keep th e Fo rd DNA” (form er en gi neer o f Fo rd Trucks ). S upplier Del phi wo rks on rou gh con cepts in i ts home b as e i n t h e USA, whil e fu rth er dev el opm ent takes p l ace in C hin a. Spanis h p art su ppli er Fi cos a has a simil ar s trat egy (Van Tuijl et al, 20 11).
In l ater st ages o f th e car desi gn p ro ces s, in whi ch desi gners con tinu ousl y int eract with en gin eers , th e s yn th eti c k nowledge bas e gains im po rtan ce (Van Tuijl and C arvalho , 200 9). Agai n, man y o f th es e st ages can be done largel y ab road (e. g. 95 % of the en gin eeri n g wo rk o f th e S AIC -GM 18 mo del was done in Germ an y, s ee Van Tuijl et al, 20 11 ) or i n Chin a. In b oth cas es, the work h as b een done b y mix ed project t eam s in wh i ch fo rei gn ers com e to Chin a o r C hin es e engi n eers are s en t ab ro ad to wo rk o n p roj ects and t o do en gineerin g and management cou rs es . So , l earnin g in p roj ect t eams seems to b e a m aj o r mod e for up grad in g the s ynth eti c kno wledge b as e as well. Not abl e is th at alth o u gh m an y activit ies can be do ne ab ro ad as wel l as in Chi na, C hin a gains im port an ce in R &D acti viti es, due t o pres su re o f t he go vernment, risin g com pet ition fo r th e Chin es e mark et and increasi ng variet y in dem an d. Th is is witn ess ed b y st rat egi c inv es tments o f western car makers in R&D an d desi gn facilities. For in st ance, VW open ed a des i gn cent re in Sh an gh ai after t he entrance o f GM in Chin a i n 1 99 7 (Li u an d Di ck en , 20 06), and mo re recen tl y, GM has opened a new b asi c res earch cent re and in vest ed i n a strat egic partn ershi p wit h a local u niversit y (Van Tuijl et al, 201 1 ). Fin all y, it is wo rth mentionin g that st yl i n g desi gn, m ainl y rel yi n g on s ym boli c k nowled ge, has as a st ro ng dom est ic ch aract er du e t o d ep end en c y o n Chi nese consum er t ast es: “Al l Chin es e Bui ck mo dels are s t yl ed b y Chin es e desi gn ers ” (M an ager S A IC). In this desi gn work, western desi gners can also l earn from th ei r Chin es e coll eagues .
5. Upg rading and k nowledg e bases. A s ynth esis .
The p ri nci pal resul ts that were obt ai ned i n our empi ri cal an al ys is are summ arised in tabl e 2 whi ch sho ws th e wa y of up gradin g an d th e l ocatio n (or geograph y) of activit ies of t he two an al ys ed kno wled ge b as es. Des pite l arge di fferen ces bet ween the t wo i ndust ri es in t erm s of am on g ot h ers t he gov ernance and o rgan isation al st ru ctu re (e.g. hi erarchi cal ch ain for autom oti ve and project st ruct ure for AEC ), t he upgrading process es of the bot h knowledge indust ri es and t he locatio n of acti viti es show several si milariti es. R egarding upgrading of the s ymboli c knowledge bas e, i n both cases we
