Conclusions
This study explores the innovation financing system of China with regard to the Triple
Helix policy perspectives. The analysis is based on the national innovation system approach
and the Triple Helix model. Table 5 summarizes the Triple Helix perspectives
of China’s innovation system. It also offers policy recommendations to improve the
conditions for innovation development in China. The analyses based on the Triple
Helix approach have clearly shown that the role of Chinese government has outweighed
the role of university and industry (government-led innovation system). Table 6
provides interesting insights on policy aspects and characteristics of the innovation system
by comparing China, the fastest growing economy in Asia, and the USA, the most
innovative economy in the Western developed countries.
In particular, the government should establish the selective VC program similar to Israel’s
Yozma program to fill a supply gap of VC financing for SMEs. However, to encourage
crowding-in effects, the Chinese government should reduce its role in the
economy and encourage the private sector to gradually take part in the development of
the VC industry. Taking into account Israel’s Yozma program as a model of competitive
VC industry, the Zero2IPO group and other private VC firms may initiate the venture
capital program by setting up the funds of funds to induce innovation and entrepreneurship
in China. Each fund of funds should invest in different potential technologies
(high potential areas that are important to China’s economic growth such as biotechnology,
internet, clean technology, and telecommunication). These types of funds
would promote early stage VC development and support the creation of VC ecosystem.
The results show the country-specific configuration of interacting institutions to promote
industrial technological capabilities. In the case of USA, the government plays a
catalytic role to induce private sector investments and entrepreneurial development
(launching various funding programs such as SBA, SBIR, and SBICs). Also, effective interactions
among the parties of the Triple Helix model (university-industry-government) also
assist the growth of high-tech sector development. In the case of China, public policy
plays a key role in building an innovation system. Whereas China’s innovation system is
directly driven by government intervention policies, the US innovation system is driven by
market forces, indirectly influenced by government policies and programs. The analyses
have shown weak links and interactions among institutions underlying the innovation system
in the case of China. The findings are in contrast to the US model emphasizing the
creation of industrial clusters to strengthen the innovation system and showing strong
Triple Helix interactions within the clusters (according to the studies by Porter (1990,
2001) and Etzkowitz (2002, 2004)).
Building innovative capabilities of the nation is highly regarded as a very important
factor for increasing and sustaining the national competitiveness. It is argued that dynamic
interactions within China’s innovation system should be further strengthened.
The development of the innovation system needs incentives to support SMEs as there
is a lack of finance to support high-technology industries and VC mechanisms are not
fully developed in China. Further, the government policies should encourage the private
sector to take up more VC investments to build high-tech SMEs for improving national
competitiveness.