Since 2005, Shanghai government has been actively promoting creative industries with the ambition to become a leading design city of the world. The policy was spear-headed by the Shanghai Creative Industry Center (SCIC) which oversaw the formation of Creative Industry Clusters (CICs) as a main policy tool. This paper examines the general directions, achievements and issues relating to the Shanghai government's policies to promote creative industries through clusters under the 11
th Five Year Plan (2006-2010) and discusses the prospects for further development under the 12
th Five Year Plan (2011-2015). Despite apparent success in terms of the growth of the number of clusters and their economic output, there are problems of over-commercialization and lacking inter-industry linkages. To adequately address these problems, Shanghai government needs to shift the focus from short-term profits to long-term benefits of the clusters to the businesses within and outside the clusters and improve the management of clusters through specialization. These then necessitates the improvement in governance as well as the promotion of broader education among the business and the public to appreciate the value of innovation and design.
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