Abstract: Sports industry is considered to be one of the most active sunrise industries in the 21st century and it is a new growth point of local economic development in the future. China’s sports industry started relatively late with relatively low level of technical and vertical division of labor is not high, which determines its low end in the industrial value chain and the urgent upgrade. Based on the theory of industrial value chain, this paper takes the South Jiangsu as an example to , conduct a deep research on the mechanism of local sports industry upgrading, suggesting two forms of sports industry upgrading in sports goods manufacturing industry and service industry respectively. Sports goods manufacturing industry upgrading is promoted by innovation, while sports service industry upgrading is based on industrial agglomeration. It is also pointed in the paper that government supports, optimizing resources allocation and strengthening sports enterprises are very important for sports industry upgrading.

Key words: value chain, industry upgrading, sports industry