Constraints and the transformation of the enterprise network of industry under the economic development:

A case study of the apparel industry in Wenzhou city

Abstract

There are many industrial clusters of small and medium-sized enterprises (SMEs) located in the city of Wenzhou, China, including those of the garment industry. As some of the most distinctive Marshallian industrial clusters, they are widely followed by researchers. Despite Wenzhou being one the most well-known regions of the garment industry in China, changes in the business environment such as the increase in labor costs and the rise in land prices have imposed constraints on its corporate network that has played a significant role in the formation of industrial clusters. Therefore, changes in the business environment have made a crucial impact on s such areas the influence of industrial clusters, and the development of their functions within the course of corporate network changes. This thesis takes the garment industry of Wenzhou as the case study, collects and analyzes various resources and statistics, and interviews 23 SME owners and leaders of various businesses. The conclusion is the intensification of competition among SMEs has caused negative impacts on the corporate network due to the increasing cost of both land and labor. The benefits of operating a business within the industrial cluster are, more opportunities to meet potential business partners in the region, and being able to take full advantage of the growing brand power of Wenzhou by setting up headquarters, and even research and development, design and sales departments in the city.