Analysis on the Competitiveness of High-end Agricultural Industry in

Beijing by Diamond Model

Zhao Jiang

1,3

, Xie Lijiao

and Gong Jing

1,3*

Institute of Agricultural Scientech Information, Beijing Academy of Agriculture and Forestry Sciences, NO.9 Shuguang

Garden Zhong Road, Haidian District, China

Department of Rural Science and Technology Development, Beijing Science and Technology Committee,

Haidian District, China

The Research Center of Beijing Engineering technology for Rural Remote Information Services, Haidian District, China

zhaojiang821@163.com , xljyouou@163.com, gongj@agri.ac.cn

Keywords: Diamond model, Beijing, High-end Agricultural Industry, Competitiveness.

Abstract: Unique natural and geographic conditions and special functional orientation of Beijing determine the

agriculture of Beijing to go on the development path of high-end industry. This paper clearly states the

connotation and key areas for future development of high-end agricultural industry, then takes the diamond

model of Michael Porter as the research and analysis form to make a qualitative assessment on the

competitiveness of the high-end agricultural industry in Beijing through the aspects of factor conditions,

demand conditions, related and supporting industries, firm strategy, structure and rivalry, chance and

government, finding out the key influencing factors and bottlenecks of high-end industry competitiveness.

Focusing on each key area, this paper states out counter-measures to improve the competitive advantages of

high-end industry, so as to provide references for further increasing the development quality of Beijing

high-end agricultural industry.

1 INTRODUCTION

Beijing agriculture undertakes significant

responsibilities like ensuring the supply of

agricultural products to the Capital, providing

service of ecological leisure and offering scientific

and technological demonstration, though it faces

with severe resource constraints like soil, water and

ecological environment. Under this background,

Beijing agriculture should make full use of its

advantages in science and technology, capital,

information and other fields to constantly optimize

industrial structure and production structure and

improve technological content and product

additional value. Being on the path of “high-end,

high efficiency and high radiation” is to develop

high-end agricultural industry.

Currently, the assessment research on high-end

industry, especially on high-end agriculture industry

is rather few even though there are many

competitiveness assessment on special industries.

On that account, by taking the diamond model of

Michael Porter as the theoretical basis, this paper

analyses the competitiveness of Beijing high-end

agricultural industry to find out the key factors and

bottlenecks and states out the countermeasures to

increase the competitiveness of Beijing high-end

agricultural industry so as to provide references for

further increasing the development quality of

Beijing high-end agricultural industry.

2 CONNOTATIVE FEATURES

AND KEY AREAS OF HIGH-

END AGRICULTURAL

INDUSTRY IN BEIJING

With the features of advanced technology, leading

direction, relative standard and over constancy

value, high-end industry is a modern industry system

supported by advanced new technologies and

innovation, marked by high-end products and

directed by the target of improving value adding

capacity. High-end agricultural industry commonly

refers to the high-end industries related to

agriculture. By combining the actual conditions and

development demand of Beijing, the Beijing high-

Jing G., Lijiao X. and Jiang Z.

Analysis on the Competitiveness of High-end Agricultural Industry in Beijing by Diamond Model.

DOI: 10.5220/0006018700360041

In Proceedings of the Information Science and Management Engineering III (ISME 2015), pages 36-41

ISBN: 978-989-758-163-2

end agricultural industry shall not only have the core

elements of high-end agriculture, such as targeting

on high-end market, using high-end technology to

fulfil highly added value, but also have the features

of urban modern agriculture, i.e., combining

production, living and ecological functions together,

which is the industry state mixing the primary

industry, secondary industry, and tertiary industry

together. So the Beijing high-end agricultural

industry is under the category of industry at first,

owning the common features high-end industry,

meeting the requirements of the construction of

Beijing modern agriculture technology city, catering

new challenges of the agriculture in Beijing under

new situation and satisfying the new demands of the

adjustment of capital functional orientation.

3 ANALYSIS ON INDUSTRY

COMPETITIVENESS OF HIGH-

END AGRICULTURAL

INDUSTRY IN BEIJING

Industry competitiveness is the comprehensive

quality of a certain industry in a country or a region

providing more efficient products and services to the

market than other counties or regions in the same

industry. As a well-known strategic management

researcher of Harvard Business School, Michael

Porter developed the diamond model for industry

and state competitiveness in 1990 (see Figure 1).

This model is the recognized tool for analysing the

competitiveness of a country or a region and also

adapts to analyse regional industry competitiveness

according to a lot of researches and practices at

home and abroad (Yu Wei, 2011). Most of the

researchers on industrial cluster in China have used

this model (Shui Wei and Chen Lie, 2009). Porter’s

diamond model was composed by four basic

decisive factors and 2 assistant factors. Basic

decisive factors include the factor conditions, the

demand condition, the firm strategy, structure and

competitiveness, and related and supporting

industries. These four basic decisive factors and

their interactions directly decide the competitiveness

of a certain industry in a country or a region.

Assistant factors are chance and government. These

two assistant factors influence the competitiveness

of a certain industry in a country or a region through

the interactions of the four basic decisive factors

(Zhao Xuelin, 2011).

Figure 1 Schematic diagram of “diamond model”.

3.1 Factor Conditions

From the aspect of natural resources, Beijing is a

typical resource shortage city lack of land and water.

As at the end of 2009, the cultivated area of the

whole city is 3.408 million mu in total, and the

cultivated area per capita in the rural area is only

1.22 mu which ranks the last nationwide. In

addition, the amount of rural labour is constantly

reducing and the amount of practitioners of the first

industry in the city has been reduced from 712,000

of 2002 to 554,000 of 2013 by the average of 13,000

a year. From the aspect of human resources, Beijing

has rather distinct advantages and ranks the first by

the comprehensive agglomeration degree (Yuan

Jing, 2014). As at the end of June 2014, Beijing has

389 academicians of Chinese Academy of Sciences,

accounting for 52.4% in the country, 352

academicians of Chinese Academy of Engineering ,

accounting for 43.9% and more 1103 persons in

accumulation having been selected to the Thousand

Talent program of the central government and

accounting for 30%. From the aspect of technology

resources, Beijing is the city has the most abundant

intelligent resources and has the most technological

power. In 2013, the expenditure of scientific

research fund is RMB 118.5 billion, ranking the first

of the country and over nearly 3 times of the

national average level. There are 24 scientific

research institutes related to agriculture, 80 breeding

industry research institutes, 10 national engineering

and technology research centres related to

agriculture and 41 key laboratories related to

agriculture in Beijing and there are more than 1000

breeding specialists and nearly 20,000 agricultural

scientific personnel. In a word, about 70% of

breeding scientific research strength of the country is

in Beijing.

Analysis on the Competitiveness of High-end Agricultural Industry in Beijing by Diamond Model

3.2 Demand Conditions

Demand is the base of market expansion and the

main drive force of industry development. Beijing’s

massive size of resident population makes an

enormous consumption market with the number of

21.148 million in the end of 2013. The urbanization

level of Beijing has approached that of high-income

countries with a rate of 86.2% in 2012 and the

consumption capacity of capital residents has

significantly improved. By analysing the two factors

above together, it is concluded that Beijing has a

huge consumption demand on food. It is estimated

that the overall food consumption of the whole city

will be 98.82 billion. Even though the agricultural

products in Beijing are in the situation of short

supply for lack of soil resource and rather small

production scale, the agricultural products are very

popular among capital residents, especially high-end

consumers, for short transportation distance, in time

supply and high quality of freshness. According to

the research of Jiang Heping(2006) and other

experts, the high-end consumers in Beijing usually

choose to buy the agricultural products of local

brands with a rate of 34.91%. And the consumption

rate of other domestic non-Beijing located brands

and exported brands are 24.73% and 9.62%,

respectively.

3.3 Conditions of Related and

Supporting Industries

The high-end agricultural industry in Beijing mainly

relates to the link before production and the link

after production, so the upstream and downstream

industries are basically belong to the links of

agricultural production. Currently, facility

agriculture is one of the important producing

methods for vegetable and fruits in Beijing and the

most crucial application carrier for new species and

technologies. The alternative industries for high-end

agricultural industry in Beijing are mainly the

traditional industry of the same field. Owing to

meeting the actual conditions of Beijing and

representing the oncoming development direction,

the high-end agricultural industry in Beijing has

more powerful competitiveness and advantages.

Take the safety input industry as an example, the

main alternative industries of the segmented

industries like bio-fertilizer and biopesticide are

chemical fertilizer and traditional pesticide industry.

With the increasing attention to problems like food

safety and environment pollution by the whole

society, there will be more and more limits on the

development of traditional chemical fertilizer and

pesticide. In addition, the traditional agriculture

mainly providing normal agricultural products lacks

competitiveness in motivating the enthusiasm of

farmers because of low additional value in

production.

3.4 Firm Strategy, Structure and

Rivalry

From the aspect of firm strategy, Beijing focuses on

the implementation of the strategy of industrial

clusters to improve the radiation ability of the

functional areas of high-end industry and actively

develop new functional areas of high-end industry.

According to the statistics, from January to

November of 2013, the advanced manufacturing

industry and the modern manufacturing industry

within the six high-end functional areas respectively

has realized income of RMB 322.82 billion and

602.58 billion, accounting for 97.1% and 81.5% of

the city and with a year-on-year growth of 14.2%

and 22.9%; and the income profit rates are

respectively 7.2% and 7.6%, being higher than the

whole city by 0.1% and 0.2% (Tu Lufang and Zheng

Ruifang, 2014). From the aspect of firm structure, as

the political centre of the country and the economic

centre of Circum-Bohai Sea Region, Beijing has the

most innovative technological firms and will play

the most potential technological and innovative role

in the country for the agglomerating of firm

headquarters, large amount of technological firms

and better firm structures than that of other

provinces and cities. From the aspect of firm

competitive ways, Beijing has abundant

technological resource and the firms equipped with

leading technologies related to high-end industry lay

emphasis on making full use of technologies and

properly turn their technological advantages into

market competitiveness. According to the statistics,

there are nearly 6000 newly established

technological firms, 2362 firms having income over

RMB 100 million and 229 listed companies at home

and abroad in Zhongguancun in 2013.

3.5 Chance

The chances of an industry reflect the oncoming

development potential to some extent. From the

point of environmental chance, the functional

orientation adjustment of the capital creates chances

for the development of high-end industry and the

construction targets of “world city” state out higher

requirements on the agriculture development in

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Beijing. In addition, the development of high-end

industry reintegrates rural resource, entirely drives

the upgrading of traditional industries in rural areas,

assembly technology and human resources in rural

areas and establish an interactive and development

platform for urban and rural industries to enhance

communication and connection, promote share and

complementary and deepen strategic cooperation

among urban and rural industries. From the aspect of

industry chance, the Beijing agriculture has stepped

into the development phase of urban and modern

agriculture. The transformation and upgrading of

agriculture are supported by expanding agriculture

functions and change agriculture producing

methods. From the aspect of policy chance, the

Beijing government and even the central

government have paid high attention to the

development of high-end industry by making

supportive policies from many respects to accelerate

technology innovation, achievement transformation

and industry development.

3.6 Government

As the “visible hand” to optimize resource allocation

and boost industry development, government actions

are of crucial importance for fostering

competitiveness. From the aspect of governmental

scientific decision, Beijing, as the political centre of

China, attaches great significance to improving

government’s efficiency. By the research results of

Research Report of Provincial Local Governments’

Efficiency in China 2013, the government of Beijing

has ranked the top among provincial local

governments at the respect of government’s

efficiency in 2013; From the point of measuring, the

Beijing government has ranked the first, the second,

and the first at the aspects of governmental public

service, national economic welfare, and e-

government affairs, respectively. From the aspect of

governmental support, the construction of national

and modern agricultural science and technology city

carried out by Beijing provides a powerful platform

for the development of high-end industry. Through

developing high-end agriculture and high-end

services related to agriculture, optimize the resource

allocation of Beijing and the surrounding areas or

even of the whole country, and establish an industry

mode of “high-end research and development, brand

service and marketing management being in Beijing,

manufacturing and processing being out of Beijing”.

4 COUNTERMEASURES TO

IMPROVE THE

COMPETITIVENESS OF

BEIJING HIGH-END

AGRICULTURAL INDUSTRY

To further consolidate and improve the

competitiveness, this paper gives the following

suggestions focusing on six key areas:

4.1 Modern Seed Industry based on

Biology Breeding Technology

Firstly, increase the capacity of self-innovation and

propose the change of breeding method. Enhance the

basic application research and biotechnology

development emphasizing on molecular breeding,

make breakthrough in the fields like gene detection,

breeding for biotic stress resistance and polyploid

breeding and speed up the establishment of new and

high through-put gene discovery technology system.

Secondly, accelerate the transformation of

applications, and promote agricultural production

efficiency. Strengthen the infrastructure

constructions of seed production bases, adopt

advanced processing technology and device for seed,

make the production condition better and establish

modernization seed processing centre and delivery

system to enhance seed production and processing

capacity and service level. Thirdly, support the

growth of firms and service industry. Attract the

headquarters of seed industry to settle in Beijing,

promote the seed industry to form into clusters,

facilitate the extension of industry scale and support

the development of modern agriculture. Encourage

the leading firms to set up seed producing base in

other places outside Beijing and make a trans-

regional breeding, cultivating and promoting

industry chain.

4.2 Modern Agriculture Equipment

Manufacturing Industry based on

Internet of Things Technology

Firstly, carry out researches on key technologies.

Focusing on the following aspects including

development of photoelectric control system of

agricultural machinery, software research and

development of agriculture system and the study on

new agricultural machinery materials and the life

time extension of materials, build a standard system

for selecting agricultural machinery engineering

Analysis on the Competitiveness of High-end Agricultural Industry in Beijing by Diamond Model

materials. Secondly, intensify technological and

financial support. To be specific, intensity the

support for the qualified innovative firms to seek

financing by listing on the stock market and the

already listed firm to seek financing through

acquisition and reorganization in the market.

Thirdly, speed up the extension and transformation

of achievements. Support and encourage key firms

to set research and development institutes in

demonstration areas and develop socialized

technology services like technological achievement

evaluation, intellectual property management,

technology property right transaction and

technological finance to promote the transformation

and industrialization of technological achievements,

propel products and technologies to radiate outwards

and boost the development of regional and national

trade.

4.3 Modern Food Manufacturing

Industry based on New Processing

Technology for Agricultural

Products

Firstly, propel the upgrading of food manufacturing

technology. Depending on the key special scientific

project “Capital food safety assurance” and focusing

on new technologies and processes like the one for

producing infant formula and evaluating and

identifying the quality of manufactured food, carry

out researches on key technologies and develop a

batch of advanced devices with self-owned

intellectual property right to enhance the assurance

of food quality. Secondly, construct a food industry

cluster district. Promote industry clusters, drive the

upgrading of industry chain based on modern service

factors, and actively establish an industry service

mode of “high-end research and development, brand

service and marketing management being in Beijing,

manufacturing and processing being out of Beijing”.

Support leading firms to adopt integration

production plan and establish a standardized

production base for agricultural products by

coordinating with nonlocal firms to guarantee the

safety and steady supply of raw materials. Thirdly,

complete the food quality and safety monitoring

system. Establish a comprehensive and efficient

food safety testing service platform for many

varieties, form a safety chain for the whole industry

chain for agricultural products from “producing area

exiting, sales market entering, quality tracing, to risk

controlling”, construct a food safety risk supervision

network covering the whole city complete the

traceability supervision system for food safety to

promote the application of new technologies and

products on the producing, circulating and marketing

of agricultural product and further improve the test

and supervision level for food quality safety.

4.4 Safety Inputs Industry based on

Biological Manufacturing

Technology

Firstly, carry out scientific research and improve

innovation capacity. Establish an application

platform for developing and industrializing the

generic technologies of safety inputs, accelerate the

development of new resource of biological species

and the research core technology and new product of

animal and plant bioreactor, develop key

technologies and devices for scaled fermental

cultivation and promote the application of

biotechnology products like feed enzyme

preparation, probiotics, antibacterial peptide and

plant extracts in biological feed. Secondly,

accelerate the transformation of achievements and

extend the scale of application. Set up innovation

service association and carry out the cooperation

combing producing, learning, scientific researching

and practical applying to drive the collaboration

among such sectors as science and technology,

agriculture, economy and food and medicine sectors

and accelerate the industrialization of achievements.

Thirdly, intensify policy supports and straighten out

business modes. Set up a special fund for supporting

biological agricultural industry, and complete the

subsidy system for the safety inputs of biological

agriculture by expanding the range and degree of

subsidy to encourage agricultural producers to use

biological inputs.

4.5 Energy Saving and High Efficient

Agriculture based on New Material

Technology

Firstly, promote technology innovation on new

agricultural materials. Focusing on facility

agriculture inputs, grasp the leading technologies in

the fields of agriculture materials at home and

abroad through introducing, absorbing and self-

innovating technologies. Make preferential policies,

make use of abundant new material technology

resource in Beijing, attract abroad firms or nonlocal

new high-tech firms to enter Beijing new material

industry base and set research and development

centre in Beijing. Secondly, speed up the

development of water-saving agriculture. Measures

shall be taken to develop water-saving agriculture

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ISME 2015 - International Conference on Information System and Management Engineering

including researching and developing precise and

high efficient water-saving devices for sprinkling

irrigation, trickle irrigation, micro-irrigation and

small tube flow irrigation, promote techniques like

efficient and fine water-saving technique, dry-

farming water-saving technique, field crops water-

saving technique and integration of water and

fertilizer water-saving technique and strengthen

standardization and delicacy management on

agricultural water to improve agricultural water

using efficiency. Thirdly, cultivate photovoltaic

agricultural industry. Enhance the application of

solar power technology in modern agriculture at the

respects of planting, breeding, irrigating, pest

controlling and agricultural machinery providing,

explore a proper photovoltaic greenhouse

construction mode according to the actual conditions

of Beijing and take some supporting forms like

financial subsidies to encourage agricultural

producers to promote the applications.

4.6 Ecological Agriculture based on

Low-carbon and Circular

Technology

Firstly, improve the technological supporting system

through focusing on agricultural waste recycling and

resource utilization, summarizing and making

systematic analysis on current ecological agriculture

technology and model, strengthening research and

development effort on ecological agricultural

product, new technology, new model and

appropriate devices and greatly promoting the

application of new product, new technology, new

model and appropriate devices. Secondly, promote

the industrialization of biological agriculture and

form a coordination linkage mechanism for all

sectors. Make researches on the development

problems of ecological agriculture and give priority

to the implementation of scientific demonstration

projects of biogas industry to promote large-scale

production of biogas. Thirdly, establish a long-term

mechanism for industry development. Make an

assessment index system and set pollution control

standards for ecological agriculture and establish a

long-term mechanism for ecological agriculture

development, to fulfil systematic and sustainable

development of ecological agriculture in Beijing.

5 CONCLUSIONS

Except for lack of natural resource, the high-end

agricultural industry in Beijing is competitive in

other respects and even takes the lead of the country

in some fields. The key fields for future

development of the high-end agricultural industry in

Beijing are modern seed industry based on biology

breeding technology, modern agriculture equipment

manufacturing industry based on Internet of things

technology, modern food manufacturing industry

based on new processing technology for agricultural

products, safety inputs industry based on biological

manufacturing technology, energy saving and high

efficient agriculture based on new material

technology and ecological agriculture based on low-

carbon and circular technology.

ACKNOWLEDGEMENTS

Funding for this paper was provided by “Innovation

Program of Beijing Academy of Agricultural and

Forestry Sciences” [KJCX20140207] and “Beijing

Science and Technology Committee‘s Soft Science

Subject” [Z141108001314015].

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Analysis on the Competitiveness of High-end Agricultural Industry in Beijing by Diamond Model