by 
8th July 2024
What Makes Them Thrive? Lessons from Successful Industrial Parks Worldwide
Lessons Learned from Industrial Parks Around the World
When you think of industrial parks, the image that often comes to mind is one of efficiency and opportunity. However, despite high-quality infrastructures such as highways and buildings, many industrial parks still fail to thrive. Why?
Industrial Park with High-Quality Infrastructure Does Not Guarantee Success
Industrial parks are popular in developing countries, especially in China, where they are used as policy tools. Visitors are attracted by the vision of functional parks filled with firms and bustling activities. However, the reality can be starkly different.
Despite strong government support, tax incentives, and large tracts of land, many industrial parks remain underutilized. High-quality and shared infrastructure alone does not guarantee the success of an industrial park. It takes more to create competitiveness and a spillover effect that benefits the wider economy.
Industrial Property Boom in Malaysia Might Cause Another Overhang Issue
In 2021, Malaysia saw over 300,000 property transactions, but only 1.8% were industrial properties. This low percentage is telling. A few years ago, when the economy was thriving, developers built many high-end condominiums.
However, the pandemic caused significant economic disruption, leading to an overhang of these properties as many people faced pay cuts and job losses. This scenario could repeat with industrial properties. The current boom driven by e-commerce and supply chain disruptions might lead to an oversupply, with demand not catching up in time.
How Do Industrial Parks Stay Competitive Amidst Ample Supply?
We recommend evaluating industrial park performance through a structured approach:
- dentify the stakeholders and their roles in the implementation process.
- Assess the incentives and capacities of these stakeholders within their local context.
- Analyze how these incentives contribute to the success at various stages: park completion, investment attraction, competitiveness improvement, and economic spillover.
Success in industrial parks involves more than just infrastructure; it requires coordinated efforts from all involved parties.
Riding on Megatrends to Stay Competitive
Innovation is accelerating, shortening production cycles. Megatrends like healthcare innovations and the Internet of Things (IoT) are reshaping industries. For example, the demand for cold chain logistics and data centers is booming due to advancements in these areas. Companies need to identify relevant megatrends that impact their business models and adapt accordingly. We help companies navigate these changes, find new opportunities, and enhance their capabilities to stay competitive.
People-Oriented Solutions Are Essential for Industrial Park Success
Most industrial parks focus solely on economic profit, neglecting social infrastructure for workers. This oversight can significantly impact labor productivity. A successful case is the Long Hau Industrial Park in Vietnam, which provides amenities such as a customs office, wastewater treatment, fire-fighting station, police station, service center, polyclinic, kindergarten, supermarket, and residential areas. These facilities not only improve worker well-being but also enhance productivity and attract international investments.
Identify the Interlink of Different Industries Surrounding the Industrial Parks
We advise clients to leverage surrounding industries to boost their industrial park businesses. A notable example is Thailand’s Singha Estate, which purchased an industrial estate linked to power plants. This synergy between the power plant and the food-focused industrial estate ensures a steady demand for food-grade steam produced by the power plant, enhancing the estate’s competitiveness.
Local and State Governments Are Key to Industrial Park Success
Local and state governments play a crucial role in promoting and driving the success of industrial parks. The Selangor state government, for instance, hosts the Selangor Industrial Park Expo, linking international and local key players and potential investors. They also provide tax incentives, establish free trade zones, and offer exemptions and grants to attract investment.
How MyIndustrialSpecialist Agents Become Your Strategic Advisor in Selecting the Suitable Industrial Park
We have extensive years of experience helping clients choose the right industrial properties in suitable industrial parks. We also help you connect with the right parties, from identifying the right properties and building them to establishing operations.
Our expertise ensures you get a property that meets your specifications and budget. We stay updated on the latest trends and insights, helping you spot strategic locations and suitable industrial properties. Contact us at myindustrialspecialist for more information and to start your factory investment journey.
