Why This Issue Deserves Attention
Global investment promotion agencies have long focused on attracting external capital, yet often overlook a fundamental question: Is the industrial agglomeration of a region "transported" by external forces, or "grown" from the internal soil? In Fuyang District, Hangzhou, China, a three-year academic study tracked 12 villages along ancient roads and found that the industrial revitalization of these villages did not rely on large-scale investment attraction projects, but rather on the interlocking relationships formed among three types of industries: core, related, and radiating. The endogenous cluster logic revealed by this case has broad methodological significance for the promotion of industrial clusters and investment promotion efforts worldwide.
I. Problems and Background: Structural Limitations of Investment-Attraction Thinking
The traditional investment-attraction model centers on "attracting external projects." Governments provide land, tax incentives, and infrastructure, while investment teams bring external enterprises into industrial parks. This model has achieved remarkable results in the process of industrialization and urbanization, but it frequently fails in rural and mountainous areas. The reason is that mountainous regions lack the scale markets, supporting supply chains, and skilled labor that external capital requires. Even when individual projects land, they often become "enclaves" with little connection to the local economy.
At the same time, local industries are not absent; rather, they are fragmented and isolated. Field surveys of Fuyang's ancient-road villages show that resources such as tea, bamboo, and handicrafts have long existed, but there is a lack of information exchange and interest linkage among industries. The government has repeatedly carried out externally driven poverty-alleviation programs, but once the projects ended, economic vitality faded. This phenomenon reminds investment promotion practitioners: when external resources recede, what truly determines whether a region can sustain growth is whether an internal industrial network has already taken shape.
II. International Practices and Trends: From Exogenous Drive to Endogenous Linkage
Global research on mountain development has undergone a similar shift. Japan's village revitalization, South Korea's New Village Movement, and mountain community development in Himachal Pradesh, India, have all gradually moved from early fiscal subsidies and public works toward cultivating local industrial capacity. Relevant United Nations agencies have also emphasized that community-driven endogenous growth is more sustainable than purely external aid.
The Fuyang study provides a micro-mechanism for this shift. The researchers divided industries into core industries, related industries, and radiating industries. Core industries are rooted in local resource endowments, such as tea cultivation and bamboo processing; related industries provide support in design, packaging, and maintenance; radiating industries spread industrial value to external markets through integration with tourism, education, and e-commerce. The synergy among the three not only improves resource-use efficiency but also creates substantial sustainable local employment.
This finding echoes the social network effects in European industrial district theory. The handicraft clusters in Italy and southern China remind us that the essence of industrial agglomeration is not geographic clustering but the networking of knowledge, trust, and division of labor. For investment promotion agencies, this means that "promoting a cluster" is not the same as "advertising a piece of land"; rather, it requires understanding and supporting the relational structure among a group of industrial actors.## III. Methodological Framework: A Replicable Path of Three-Ring Linkage and Cross-Village Collaboration
From the Fuyang experience, a set of cluster promotion pathways applicable to rural and peripheral areas can be distilled, which this article calls the "Three-Ring Linkage" model.
Step 1: Map the Local Industry Landscape and Position the Core Ring
Investment promotion agencies should first abandon the mindset of "introducing from scratch" and instead conduct a local industry census. Using fieldwork and data tools, they should document the production activities of existing farmers, cooperatives, small enterprises, and handicraft workshops. The focus should not be on enterprise size or tax contributions, but on who can take root long-term, possesses technical accumulation, and has a community foundation. Core industries should have three characteristics: rootedness in resource endowments, verifiable market demand, and relatively concentrated labor skills.
Step 2: Design Inter-Industry Interfaces and Promote the Linkage Ring
Core industries often face the dilemma of "strong production, weak circulation." The task of the linkage ring is not to add new industries, but to establish functional interfaces. Common interfaces include: unified raw material procurement and quality inspection standards, co-built and shared processing workshops, introducing product design and brand management services, and establishing cold-chain logistics or digital sales channels. Investment promotion agencies can play the role of "connector" by organizing industry dialogue meetings and facilitating long-term cooperation between local producers and external professional service institutions.
Step 3: Open Radiating Scenarios and Capture External Attention
Radiating industries are the payoff and amplification of the first two rings. By turning core industry stories into public experiences through tourist routes, study tours, cultural festivals, and content media. A key strategy of Fuyang's ancient road villages is cross-village linkage: using the ancient road as a spatial thread to package scattered villages into a "cultural-economic corridor." This not only avoids duplicate construction but also enhances overall brand recognition.
It must be cautioned that radiating industries cannot be hollowed out and detached from core industries. If a rural area has only the "shell" of tourism without the "core" of production and exchange, it easily falls into the trap of a performative economy. Therefore, it is recommended to establish a monitoring system indexed by the intensity of core industry activities, ensuring that tourism revenue flows back to the production end.
IV. New Directions: The Reshaping of Cluster Promotion by Digital Tools and Global Communication
Digital technology is lowering the "connection cost" for rural industrial clusters. AI-enabled industry mapping analysis can help investment promotion agencies quickly identify potential linkages and gaps between industries; big-data consumer profiling can guide rural products to match segmented markets; social media and short videos allow remote villages to directly participate in global competition for attention. In this sense, the promotion of industrial clusters is evolving into a "digital communication project."
At the same time, investors' perceptions of "cluster quality" are also changing. Compared with traditional factor costs, a new generation of investors pays more attention to regional resilience, cultural uniqueness, and the dynamics of community cooperation. Regions that can clearly tell the story of "how industrial actors mutually support and coexist" often have inherent advantages in communication. Therefore, investment promotion agencies need to incorporate "relationships" into their communication framework, shifting from showcasing landscapes and hardware to presenting the real people and collaborative mechanisms within industrial networks.## Conclusion
The case of Fuyang's ancient road villages does not offer a one-size-fits-all template, but it powerfully demonstrates that the starting point for promoting industrial clusters should not be "what to introduce," but rather "what connections already exist here." The role of investment promoters is shifting from "hunter" to "gardener"—nurturing local relationships, pruning inefficient links, and waiting for the ecosystem to take shape naturally. This endogenous view of clusters may be the most significant mindset shift for the global investment promotion community in the next cycle.