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mentDalian, ChinaChiouGuey Jan*, ChaoChin Chan, ChiaHungDepartment of International Business, Providence University, 200 Chung Chiarticle infoArticle history:Received 28 December 2020Accepted 5 January 2020Keywords:ChinaIndustry clusterabstractThe trend towardnology, and talent,opportunity for rapidconstruct a dynamicDalian, China softwDalian software industryjournal homepage: 2020 Published by Elsevierof the software industry inTaiwanzation has not only facilitated the circulation of capital, techhas also provided industries in developing countries with anThis study uses the system dynamics methodology tomodel to explain the phenomenon of clustering in thetry. The results indicate that the rapid development of theis the result of a growth effect generated primarily from thein SocietyLtd. All rights reserved.. Jan et al. / Technology in Society 34 (2020) 163–173164together,thisevidencedemonstratesthekeyroleplayedbyDalian in the development of the Chinese softwareindustry. However, how Dalian was able to outperform itspetitors in less than a decade deserves furtherdiscussion.This study adopts the systems perspective to analyzesoftware industry development in Dalian. In addition, weconducted an indepth analysis of industry clustering fromthreeperspectives:talent,technology,andcapital. We usedsystem dynamics (SD) causal loops to construct a dynamicmodel of the Dalian software industry development.Thereafter we adopted the sustainable cities developmentperspective for further consideration (within the restrictions of environmental conditions) of developmentbottlenecks that the Dalian software industry mayencounter in the future, and the responses of the Daliancity government.2. Industrial clusters and system dynamicsmethodologyThe term “industry cluster” is de?ned as panies ororganizations in a similar ?eld and in the same geographicregion. Companies in such clusters cooperate up and downthe supplychain while at the same time peting witheach other [14]. Companies in an industry cluster gaina petitive advantage in their industry and fosterenterprise innovations [15]. Numerous studies have foundthat industry clusters increase the petitiveness ofrelevant industries in both developed and developingcountries. For instance, a narrow belt within the northeastand eastern parts of the Midwest dominatedmanufacturing in the . until the mid1950s, with 64% ofmanufacturing employment [16]. Brazil’s shoemakingcluster in Sinos Valley held 5–% of the total volume oftheglobalshoemarketfrom1920to1990,respectively[17].The Sialkot stainless steel clusters in Pakistan, togetherwith Tuttlingen in Germany, dominate the global surgicalinstrument market [18]. The Japanese ceramic industry hasclustered in the Seto area, which now controls the international market [19]. Switzerland’s precision industry,which manufactures watches and clocks, is clustered in theJura Arc [20]. Wind musical instruments have clustered inElkhart, Indiana [16], while fashion goods have clustered innortheastcentral Italy [21]. Many of Taiwan’sworldleading industries, such as semiconductors, electronics,and TFTLCED, have clustered in Hsinchu Science Park[1,7,22,23]. Michael Porter lists 30 clustered industries,such as the . automobile industry cluster in Detroit,insurance inHartford, andaircraftequipmentand designinSeattle. Additionally, Portugal has several clusters orientedtoward exports and entrepreneurship, ranging from ornamental stones in Evora to horticulture in Faro [14].However, virtually all of the studies and research onthese industry clusters has focused mainly on regionaleconomic development, enterprise initiation, industryvalue chain, industrial works, transaction cost, technology diffusion, geography and trade, technology forecasting, industryeducation cooperation and technologicalinnovation. Furthermore, most studies have focused onquantitative research while ignoring qualitative research[24,25]. Quantitative studies have clear methodology, arereproducible and falsi?able, but may have a narrowmathematical focus, and their ?ndings are not alwayspractically relevant. Accordingly, the problems of drivingindustrial development are increasingly vast, plex, anddynamic [26–30], while key variables involved in theinfrastructureofsoftwareindustrydevelopmentfrequentlyinteract with each other [31]. Traditional quanti?edresearch does not effectively address these issues [32–35].In contrast, qualitative studies do notidentify the true fromthe false aspects of objective facts, but instead attempt toexplain social phenomena. Consequently, the qualitativeresearch may involve longterm observation and repeatedspeculation to establish indepth interpretations forexternal phenomena [25].Generally, the development of an industry requiresextended accumulation of its own “energy,” followed bya slow and gradual display of industry scale and performance [36]. Development not only is an extended processbut also involves numerous factors, such as governmentpolicy (including infrastructure, counseling, and rewardmeasures, etc.), industrial environment, market petition, Ramp。TengRd., Taichung,globalibutdevelopment.developmentare indusis griety aollein eachtrial dcluster of semiconductor and electronic and electricalmachinery manufacturers was formed using the Shanghairegion as the hub, and distributing throughout the YangtzeRiver Delta and along the lower reaches of the Yangtzeaddition, from 1998 to 2020 sales revenue has grown fromUS$25 million to US$ billion. The 2020 report [13] onthe development of the Dalian software and informationservice industry pointed out that the 2020 industry salesrevenue increased by 43% pared to 2020, exceedingnational average growth for that year