The Role of Chinese Government in Business Incubators
5.1 Summary of Research Findings
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Chapter VI
Conclusion
5.1 Summary of Research Findings
The impressive performance of entrepreneurship and innovative capacity of
Chinese BIs have inspired a number of scholars to explore the phenomenon behind the
accomplishment. In order to understand the implication in the overall landscape of BIs
in China, this research has thus attempted to answer the following questions: firstly,
what is the main role of BIs in Chinese economic growth; and secondly, what is the
role of the Chinese government in leading the emergence of the Chinese BIs and its
performance.
The first question is to explore the main role of BIs in Chinese economic growth.
Upon observing the two cases of Wuhan and Shenzhen with the different backgrounds
and purposes, as well as the relationship among BIs, tertiary industry and high-tech
sector, it could be concluded that Chinese BIs a catalyst to accelerate S&T development
and to provide matching service at technopreneurial functions on the resources of
knowledge (high-tech research to patents), communities (high-tech SMEs, universities,
and relevant entities), and networks (accessing government, investors, and
entrepreneurs).
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In terms of building the regional innovation capability, BIs have been one of the
most important instruments of economic development in China over the last 20 years.
As a magnet to attract high-tech skilled individuals, Chinese BIs have the ability to
gather local innovation, help startups to adapt, grow and expand in the marketplaces,
and form into the innovative oriented clusters with the radiation expansion. Along with
a more open business environment in China, the number of technology-related
enterprises, including technopreneurial ventures engaged in technological innovation,
has increased significantly in the last couple of years. The two typical cases of Wuhan
and Shenzhen demonstrated that the BIs system is indispensable ingredient in building
a regional S&T cluster.
Since the concept of BIs system introduced to China, the patenting and innovation
activities have been flourishing in the country. Patent counts is an important indicator
of a country's output capacity of S&T, which reflects a country's independent
innovation ability. The increase of domestic filings patent applications directly reflect
the growth of local innovation as Chinese government strongly develops BIs system
and promotes S&T transformation. It is proved that BIs are an indispensable element
in facilitating a country's innovative capacity, economic growth and sustainable
development.
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In terms of SME employment, Chinese BIs encourage high-growth and
innovation-based SMEs as well as focus on offering professional high technology
resources to technopreneurs. Chinese BIs have the ability to attract more and more
enterprises and entrepreneurs to engage high-tech sectors, and BIs are not only to
promote S&T transfer and commercialization but also to upgrade regional economic
development. BIs in China experienced the evolution of the past few years, gradually
became an essential part of Chinese innovation systems as they provide services with
more distinctive features and objectives.
Most importantly, BIs activities can stimulate economic transformation, which
greatly changed the composition of the three broader sectors: the primary, secondary
and tertiary industry. Over the past decades, China has seen a transition from a
manufacturing based economy to the preponderance of service sector or tertiary
industry. There is a consensus that the growing service sector is a sign of increased
living standards in a country. Today, Chinese government is trying to transform China
from a manufacturing nation to a service-based economy. The emergence of Chinese
BIs serves as a catalyst tool to accelerate China from a manufacturing nation to a
service-based economy.
For the second question, this study has systematically analyzed the role of Chinese
government by observing a series of principal policies, initiatives, and activities leading
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to the emergence, changes and enhancement of Chinese BIs, then continuing by
examining and analyzing the supportive policies in financial support and legal reforms
that highlight the critical role of Chinese government.
The role of Chinese government can be seen as a policy guidance in advancing
BIs program. The government guides the process of BIs, directs the path and steps of
BIs development. By channeling resources and policies supports, such as launching
various programs and initiatives, as well as offering financial aid and tax incentives to
stimulate economic growth, BIs system have shown positive impact in the community
and regional economic development. The contribution of BIs have reflected the
government's goal -- aiming to improve China’s competitiveness in S&T development.
Firstly, in China, the government involvement in BIs establishment and operations
is usually quite high. The government subsidizes incubator construction as well as
ongoing operations involved in operational decision. Funding is one of the key elements
for Chinese BIs sustainability, while the majority of Chinese BIs heavily dependent on
ongoing subsidies from the government to support operations. In the process of the
development of socialist market economy with Chinese characteristics, the government
is deeply involved in the economy and has a tremendous impact on resources allocation.
The Chinese policymaker can decide which industries will be promoted. As a key
component of the innovation and entrepreneurship system, BIs are unavoidably
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oriented by following the law of market economy. But with the public sector direct or
indirect intervention in BIs operation by offering resources allocation, BIs have to
assume more public and social responsibilities and are required to follow the
government guidance.
Secondly, to enhance government efficiency and balance the relationship between
relationship between government and market, the Chinese government began to
streamline administration, to delegate power to lower levels and to optimize public
services. By taking various measures to advance the process of streamlining
administration and delegating powers, including providing financial support, reforming
laws regulation, and reducing government intervention in microeconomic activities, the
government brought a positive influence on raising the new registered companies and
S&T achievement. Streamlining administrative procedures will not only reduce
operational costs for enterprises, but also create sound environment for SMEs. The
relaxation of the policies and power can also help to rebuild a flexible business
environment, particularly in facilitating start-ups in incubation ecosystem. A series of
policies and initiatives have shown that BIs can be an effective tool for supporting local
innovation and new business creation, and can improve SMEs competitiveness in S&T
sector.
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From this perspective, China is moving self-reform on economic aspects. The core
of economic reform is the proper relationship between government and market. To let
the market decide the allocation of resources, the primary task is to build an open market
with orderly competition. While strengthening the role of the market, the Chinese
government could transform government functions and improve the governance. Some
cases discussed in this study demonstrated that the less the government direct
intervention of relevant policies regulation, the better performance of SMEs. It would
become a sound cycle in incubation ecosystem.
The findings highlight the importance of this study in the academic area and
generating practical contribution, particularly examined and discussed the role of
Chinese BIs and Chinese government. To conclude this research, BIs are part of the
Chinese innovation systems as well as a catalyst of government governance and
economic transformation. There is an inseparable relationship between Chinese BIs and
the government. The greater the government involvement in BIs support, the greater
the interdependence of the BIs and the government. The actions by Chinese government
continuously affect BIs development, and the activities of Chinese BIs impact
economic and development in the country. Meanwhile, BIs are driving sustainable
economic growth and building technopreneurship ecosystem. As an important part
within the policy framework of China's innovation and S&T development, BIs'
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contribution in Chinese economic growth is essential. BIs system are one of the
important factors to facilitate the self-reform of the government, and remodeling
relations among the government, market and society.