1. Development Strategy, Restructuring and Upgrading, Innovation-Driven Development and Transformation of the Development Mode of Service Industry

Economic transition and upgrading is directly related to the characteristics of national development strategy. Therefore, to promote economic transition and upgrading effectively, to avoid falling into the middle-income trap, and to switch the driving force of development successfully, the Yangtze River Delta (YRD) region must change its development strategy from the “late-developing advantage” one into a “first mover advantage” one. The former strategy prioritizes learning and imitation while the latter stresses innovation. At the industry level, this is to concentrate resources on the modern service industry and strategic emerging industries that represent the national competitiveness and discourse power, and climb to the top of the global value chain and become the chain advocate. The most important move, and the most critical issue, in accelerating economic transition and upgrading is sound and rapid development of modern service industry and the construction of a service-based modern industrial system. Under the condition of insufficient investment, high administrative barriers, and inadequate globalization of service industry, the YRD region should pay as much attention to the development of the service industry as it did in the industrialization before to take lead in changing the development mode of service industry. Moreover, a globalization view under the support of information technology, an endogenous development in the expanded domestic demand, an enormous market demand and the correlation effect between manufacturing and service industry are also required to develop the modern service industry.