Analysis on the Motivation of Industrial Integration

The correlation between industries and the pursuit of maximizing benefits are the internal driving forces of industrial integration and development. Judging from the practice of industrial integration in the world today, there are many factors to promote industrial integration.

1. Technological innovation is the internal driving force of industrial integration. Technological innovation develops alternative or related technologies, processes and products, and then integrates them into other industries through infiltration and diffusion, thus changing the technical route of products or services of the original industry, thus changing the production cost function of the original industry, thus providing impetus for industrial integration; Meanwhile. Technological innovation has changed the demand characteristics of the market and brought new market demand to the products of the original industry. So as to provide market space for industrial integration. The diffusion of major technological innovations among different industries leads to technological integration, which makes different industries form the same technological foundation, blurs the boundaries of different industries, and finally promotes industrial integration. For example, the information technology revolution that began in 1970s changed the time, space and cost for people to obtain three basic information: words, images and sounds. With the integration of information technology in various industries and the development of enterprise local area network and wide area network, online information processing systems are widely used in various industries such as customer management, production management, financial management, warehousing management, transportation management, etc., so that customers can obtain the information, products and services they need immediately, which leads to blurred boundaries between industries. Since 1990s, industrial integration has become a wave of global industrial development. The main reason lies in technological innovation in various fields, as well as the maturity and perfection of communication and information technology, which are catalysts and adhesives for integrating various innovative technologies. As a new leading industry, information industry has been developing at an annual rate of 30% in recent years. The technological integration triggered by the information technology revolution has penetrated into all industries, leading to the great integration of industries. Technological innovation and integration are the catalysts for the development of industrial integration. Industrial integration based on technological innovation and integration is "a fundamental change to the traditional industrial system and a historic symbol of the new industrial revolution" and has become a new driving force for industrial development and economic growth.

2. The pressure of competition and cooperation and the pursuit of scope economy are the driving forces of industrial integration. In the ever-changing competitive environment, enterprises constantly seek development and expansion, constantly carry out technological innovation, and constantly explore how to better meet the needs of consumers in order to maximize profits and maintain long-term competitive advantage. When technology develops to provide diversified means to meet the demand, enterprises will cooperate in the competition in order to seek long-term competitive advantage in the competition, and some innovations will be produced in the cooperation to achieve some degree of integration. Maximizing profits and minimizing costs are the goals that enterprises pursue unremittingly. The development of industrial integration can break through the compartmentalization among industries, strengthen competition and cooperation among industries, reduce barriers to entry among industries, reduce transaction costs, improve the productivity and competitiveness of enterprises, and finally form a sustainable competitive advantage. The increasingly close competition and cooperation among enterprises and the unremitting pursuit of profits and sustainable competitive advantages are the important reasons for the rise of the wave of industrial integration. Scope economy refers to the phenomenon that expanding the types of products or services provided by enterprises will increase economic benefits, which reflects the relationship between the quantity of products or services and economic benefits. Its most fundamental content is to provide more kinds of products or services at lower cost. Scope economy refers to the economy of * * * cooperating to produce a variety of products compared with a single production, and generally refers to the cost savings caused by the common use of related factors in the production of a variety of products. Assuming that the costs of producing two products A and B are c(A) and c(B) respectively, when the two products are jointly produced, the total cost is c(A, b), and the scope economy brought by the joint production can be expressed as C(A, b).

3. The development of multinational corporations has become a great driving force for industrial integration. Generally speaking, only super-large international direct investment can realize and support the strength and ability of transnational production and operation. Therefore, the emergence and development of every multinational company is actually the development history of international financial capital and industrial integration. Multinational companies participate in international market competition according to the principle of maximizing the overall interests of the economy, and transform industrial division into industrial integration in international integrated management, and are transforming traditional "national production" products into "company production" products. It can be said that multinational corporations are the main driving force to promote industrial integration and development.

4. Deregulation provides external conditions for industrial integration. There are barriers to entry between different industries, which make different industries have their own boundaries. Stigler, an American scholar, believes that the entry barrier is that new enterprises bear more costs than old enterprises, and the economic control of the government is the main reason for the entry barrier between different industries. Deregulation led to the business of other related industries joining the competition in this industry, thus gradually moving towards industrial integration. In order to make enterprises more competitive in domestic and foreign markets, products occupy more market share. Some developed countries deregulated and reformed, and canceled or partially canceled various restrictions on prices, entry, investment and services in regulated industries, creating a relatively relaxed policy and institutional environment for industrial integration. It is worth noting that technological progress and deregulation do not necessarily lead to integration. The technological progress of industry mostly occurs within the industry, rather than at the industrial boundary, resulting in a phenomenon called "dead body fusion" by academic circles. The "dead body integration" forced the industry to innovate the traditional management concept of enterprises, put forward management modes such as enterprise reorganization (BT), business process reengineering (BPR) and virtual enterprise, and directly started the practice of management innovation in the mid-1990s to promote industrial integration. By combining management innovation, technological progress and deregulation, industrial integration has become a reality. It is the U.S. government that relaxed the economic control over the telecommunications industry, blurred the industrial boundary between the telecommunications industry and the cable TV industry, and led to the emergence of industrial integration.