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Weekly UpdatesThe SMIC School--Education for a global village
The second observable SMIC innovation in PND and ZHTP relates to education. Knowledge workers and well-educated employees across the world typically insist upon superior educational opportunities for their family members and colleagues. Educational improvements at the aggregate (country) and local levels alike will play an important role in determining the technological future of China (Song 2008). Corporations such as SMIC have little doubt about the impact of schools on their recruiting success.
The SMIC School is a K-12 private school, established in September 2001 by SMIC itself. It occupies roughly one third of the SMIC Village. As an educational institution in China that is designed to fit the needs of both SMIC employees and other hi-tech workers in the area, the school has several unusual features. It offers both English and Chinese tracks. The English track has been granted a Level II code by the Educational Testing Service in the United States, allowing its students to register for SAT or ACT assessment needed to apply for U.S. colleges. The Chinese track follows the official Shanghai elementary, middle, and high school curricula to prepare its students to participate in Chinese national college entrance examinations.
The school also offers English as Second Language (ESL) and Chinese as Second Language (CSL) courses to assist students from different backgrounds. Both students and faculty come from diverse backgrounds. As of 2008, the school has 550 students and 110 faculty members--an impressive 5 to 1 student-to-faculty ratio for a high school in China. Students are primarily from Taiwan and North America, with a growing number from local Shanghai areas and other Asian countries. The 110 faculty members come from seven countries. The school also provides private shuttle services for students from Pudong and other Shanghai areas at company-subsidized fees. Although school transportation is normal in most schools in North America, it is rare among schools in China or in Asia in general.
SMIC School graduates compete favorably both in Chinese National College Examinations and in US colleges. Although the school started as a K-12 entity designated for the offspring of SMIC employees, at present more than 60 percent of its students are non-SMIC related (particularly children of other MNE high-tech employees).
The school is thus influencing personnel from a broader area.
The Pudong Thanksgiving Church--A change in social dynamics
From the area's inception, SMIC CEO Richard Chang had wanted to seed a church near the company site. His reasons for this were both personal and professional, since he saw an opportunity to target Christian and other religious high-tech industry employees from the global pivotal talent pool (Boudreau & Ramstad 2005). In Chang's own words, 'the government sees the value of good religion' (Einhorn & Tschang, 2008). As the Communist Party is officially atheist, it was hardly surprising that Chinese officials had initially displayed a hostile attitude toward this proposal (Iritani 2002). Eventually the ruling Party allowed SMIC to sponsor a church in the Village, enabling SMIC to attract employees to relocate from the US to China, and particularly among those who view their work in SMIC as a 'calling' (Einhorn & Tschang 2008.)
The subtle negotiation process between SMIC leaders and the ruling Communist Party elites is interesting for academics in urban studies and planning. Party leaders in Beijing understood that semiconductors are central to China's long-term technological advancement and that leading global semiconductor manufacturers would need to locate in the park and assume a leadership role in producing higher-end, higher-profit products on a large scale. According to a PriceWaterhouseCoopers report, China's demand for semiconductors surpasses that of the US, Japan, and Europe, and rose 31 percent in 2005, compared with 7 percent globally. China's technology know-how in silicon chip production was also dismal. In 2005, China accounted for 24 percent of the semiconductor market but just 7 percent of global production revenues (Huang 2008). In light of these considerations, when SMIC's CEO insisted that churches be allowed on company campuses, the Chinese government obliged. Pudong Thanksgiving Church was dedicated in late 2005, and the church's services are presently attended by more than 800 in the Chinese congregation alone, with additional people attending the English service that is conducted simultaneously.
In our field studies in ZHTP and the SMIC Village, we have observed first-hand the vibrant social activities and intellectual exchanges among relatively young high-tech suburbanites who may or may not work for SMIC. The suburbanite life style in the SMIC Village and the impact of a dynamic social center, the Thanksgiving Church, are models of innovation within an extended metropolitan region (EMR) that are being closely observed and studied by other similar regions in China and may have impacts well beyond local city borders.
SMIC's Experience in innovations
Many of SMIC's 'social' policies are innovative and have already been adopted by other SMIC campuses, EMRs and MNEs operating in China. SMIC's Beijing campus has built a sprawling residential compound for 2,000 employees and their family members, with amenities similar to those of the Pudong SMIC Village (Huang 2008). Corporate villages of this type are being copied by many other EMRs in China and include, for example, the Fujitsu Village in Wuhan (central China), the Suzhou Industrial Park in Suzhou (close to Shanghai), and the Huishan Scientific Village in Shangyang (Northeast China). The Living Circle innovation has also affected city planning in many EMRs as well as many MNEs as corporate sites are selected to establish future manufacturing and R&D facilities. Amenity Migration, the migration due to amenities such as green space, quality education, and other conveniences (Deller et al. 2001; Jackson et al. 2008), is thus one of the major features of SMIC's innovations.
A recent report in Fortune (Powell 2008: 128) referenced the experience of an SMIC engineer in owning a unit in the village and described the housing units in these corporate villages as 'cleaner environment, a little bit of green, and a lot more space'. The point is simple: the Living Circle has been an essential component of the strategy to attract high tech employees who have otherwise been skeptical of quality-of-life issues.
The presence of a church alongside the corporate headquarters and the Living Circle, with its role as a community center, promotes attractive social dynamics for both SMIC employees and other residents in PND. The extent to which the ruling Communist Party elites will allow these religious and social activities to continue is as yet uncertain.
PROMISES AND CHALLENGES
As we have noted, Chinese city development has been impressive and has progressed in Shanghai rapidly through most of the first three phases of the City Development Life Cycle. A closer look at the issues and key concerns of individual regions and their largest occupants, however, reveals pressing obstacles to progress. Our story of PND offers a compelling indication that China is already on a path to confrontation with urban planning's most difficult issues. The fact that private sector organizations such as MNEs are underwriting some of the supporting social innovations may be a reflection of the push toward corporate social responsibility but we suspect that business strategy is currently the key factor that drives this behavior. Despite the widespread reports and signs of economic progress, some components of success are still of concern in Chinese cities, including infrastructure to support economic activity and an environment that attracts highly qualified and knowledgeable labor. As Marceau & Turpin (2007: 125) point out, 'Ultimately it is people who innovate'. It is essential for cities and MNEs to adopt innovative ways to continue to attract and retain high-tech employees from pivotal talent pools.
Although there are some very positive signs, it is an open question as to whether China can learn from failure and get the next phase of 'city innovation' correct. Smith (2008) summarizes a number of the concerns that carry urban development beyond 'property development in disguise'. Innovative approaches and initiatives that work will all include the ability to take risks, learn from failure, and adapt. The open question is how this can be accommodated by the central authorities in any or all of China's thriving cities and regions.
At this point, observers such as Pannell (2007) seem most concerned about China's ability to deal with its own internal challenges. Ng & Tang (2004) refer to 'the virtually impossible task' of directing the development of infrastructure and providing for the social amenities that are essential to inhabitants of these new urban centers. The command-and-control approach will need to give way to, or at least find a way to accommodate, the development of an active civil society that is so attractive to global enterprises and the best human talent.
Astonishing growth rates of the PND kind come with inevitable problems and many observers are pessimistic that the ruling Chinese Communist Party and political system will allow for adequate and continued adaptation. To this point, however, investment decisions seem to reflect an inherent belief that economic growth will continue and that this growth is fueled primarily by a combination of free market principles and the clustering of related activities and firms.
Although Shanghai has already demonstrated characteristics of some of the world's most innovative cities, at least in the sense of having created an economic hub in less than a generation, its continued success in this realm is still an open question. In this paper we have argued that the stakes are high and uncertainty great as the city enters Phase 4 of the City Development Life Cycle (CDLC), the 'Harmonious Society'. As Simmie (2001) notes in his summary of innovation theory, MNEs have the resources to move on when opportunities occur. If and when this happens, innovations in Shanghai and other cities will need to be led by smaller entrepreneurial organizations. This would require a quite different focus from the one we have seen to date.
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