This investigation analyses the financial dependence of the transformation of scientific and technological achievements, the effective connection between scientific and technological resources and financial resources, the development of emerging industries, the upgrade of technological levels and the optimization of industrial structures, and the financial support required for technological innovation and R&D of high-tech enterprises as well as small and medium-sized technological enterprises. It is pointed out that the improvement of financial products, the innovation of capital markets and the application of internet finance are the operational basis of the innovation service mode of science and technology finance. Correspondingly, the upper level design at the policy level provides the basis for the development of the appropriate service model of technological and financial innovation.
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Innovative Service Model, Science and Technology Finance, Improvement of Financial Products, Capital Market Innovation, Online Finance
1. Introduction
The Ministry of Science and Technology of China will co-ordinate the work involving venture capital, banks, capital markets, insurance institutions, bonds and other social financial resources to support the development of science and technology. The existing forms of financial science and technology include venture capital, bank science and technology loans, agricultural science and technology micro-loans, science and technology guarantee systems, multi-level capital market cultivation, science and technology insurance, science and technology bond issuance, etc., as well as the "discount loan for promoting the transformation of scientific and technological achievements" which combines internal and public finance, and the way in which the transformation of scientific and technological achievements guides funds to drive informal finance. It explains the mutual support and promotion between technological innovation and financial deepening from many aspects.
2. Existing Development Problems and Solutions
However, the existing S&T financial service model is more limited to traditional and single loans, and the supply scale of venture loans for S&T enterprises is not large enough. The rapid growth of venture capital in China has allowed it to become the second largest recipient of venture capital after the United States, but it is still far from adequately addressing the urgent need to change the current mode of economic growth. The financial guiding fund of venture capital is implemented smoothly. The mechanisms of stage participation, follow-up investment, risk compensation and investment guarantee are reasonable, but the attraction of private capital is not enough. Science and technology insurance have achieved some success in the pilot process. The premium income and risk insurance amounts have reached a certain scale, but products are few and the radiation surface is narrow, which cannot meet the high-risk requirements of science and technology industry innovation. The "new three-board" pilot project of capital markets has achieved some results. There are 39 high-tech enterprises listed in the Zhongguancun Science and Technology Park, but the listed strength of high-tech enterprises in other regions of the country is not enough, and the support for the development of science and technology industry innovation is limited.
Therefore, the construction of a technological and financial innovation service model is an important link to solve the lack of funds in the process of independent innovation, transform scientific and technological achievements, and radically reverse the traditional industrial development model. Through financial deepening and financial innovation, we aim specifically at entrepreneurship, scientific and technological innovation, achievement transformation and sustainable development of scientific and technological talents, and design an appropriate scientific and technological financial service mode. It not only provides financial guarantee for the adjustment of industrial structure and the transformation of economic growth mode, but also provides a model for the theoretical evolution and practical operation of financial deepening.
3. Current Situation and Development Trend of Science and Technology Finance
There is much literature on the mode of scientific and technological financial services, which are discussed from the following aspects: (1) the interpretation of the concept of scientific and technological finance, the establishment of a credit guarantee and service platform; (2) financing with intellectual property rights as pledges; (3) the establishment of scientific and technological banks; (4) the cluster development of financial enterprises; (5) the establishment of guiding funds for venture capital.
(1) Explaining the concept of science and technology finance and establishing a credit guarantee and service platform:
The establishment of a credit guarantee system is an important form of the scientific and technological financial service model. It integrates resources of scientific and technological enterprises and banks, guarantees, insurance, venture capital, etc. It preliminarily establishes a comprehensive financial service system that integrates policy, product, intermediary and information services, and forms a business model based on joint credit guarantee
[1]
Ruihua Zhu and Bin Hua. 2010. “Joint Credit Guarantee and Innovation of Financing Mechanisms for Technological SMEs: A Case Study of Hangzhou”. Credit Reporting. 5: 19-25.
[1]
.
(2) financing with intellectual property rights as pledge:
With intellectual property rights as the pledge carrier, we can solve the financing difficulties of small and medium-sized technology-based enterprises, and build a market-oriented and popularizable intellectual property pledge financing model
[2]
Zhou Li. 2009. “A Comparative Analysis of Typical Patterns of Intellectual Property Pledge Financing in China: From the Perspective of Legal Sociology.” Electronic Intellectual Property Rights. 11: 11-16.
[2]
.
(3) the establishment of scientific and technological banks:
Establishing science and technology banks is a way to integrate small and medium-sized science and technology enterprises with financial institutions. The Silicon Valley Bank of the United States is a bank providing comprehensive financial services for science and technology and private equity institutions at all stages from the seed stage to the maturity stage. In terms of operation strategy, profit model, risk control, and relationships with venture capital institutions and corporate culture, it has made efforts to broaden science and technology small and medium-sized enterprises. The financing channels of the industry can be used for reference
[3]
Yan Wu and Lijie Mu. 2009. “Learn from Silicon Valley banking model to broaden financing channels for high-tech SMEs.” Theoretical Realm. 7: 13-19.
[3]
. The first batch of science and technology banks of China officially appeared in Chengdu on January 10, 2009. The CBRC approved the first batch of science and technology banks of the Chengdu Bank High-tech Branch and the China Construction Bank Chengdu High-tech Branch and copied this model to Zhongguancun in Beijing and Pudong in Shanghai
[4]
Yin Le. 2009. “Silicon Valley Banking Model Asymptotic.” Chinese Science and Technology Wealth. 3: 18-23.
[4]
.
(4) the cluster development of financial enterprises:
Industrial agglomeration with SME clusters as its external form will also optimize the financial ecology by influencing the financial development environment and promoting the integration and innovation of the financial industry. The agglomeration of SMEs will optimize the financial environment. When the cluster reaches a certain scale, the high productivity and innovation ability in the industry will be realized
[5]
Jingxing Yang and Ronggang Zhang. 2006. “Agglomeration Survival and Integration Innovation - On the Integration Development of Small and Medium-sized Enterprises and Financial Industry.” Contemporary Economic Science. 2: 16-21.
[5]
. The financial enterprise cluster is an intermediate network organization for the production and transaction of complex financial products. Its asset specificity, enterprise capability, uncertainty and transaction frequency determine the efficiency boundary of the financial enterprise cluster. It has the advantages of regional financial innovation, financial risk mitigation and production and operation efficiency
[6]
Jianhui Lian, Huanmin Sun and Huibo Zhong. 2005. “Financial Enterprise Cluster: Economic Nature, Efficiency Boundary and Competitive Advantage.” Financial Research. 6: 21-28.
[6]
.
(5) the establishment of a “Venture Capital Guidance Fund”
The "Venture Capital Guidance Fund" is a kind of financing method established by the government to guide the extensive participation of private funds in the initial stage of development of science and technology enterprises. Compared with North America and Europe, China lacks a sound service system for start-up projects
[7]
Lilai Xu. 2009. “Business incubation in China: Effectiveness and perceived contributions to tenant enterprises.” Management Research Review. 33(1): 90-99.
[7]
. China's financial market needs to be further improved in order to form a healthy venture capital market. Venture capital plays an obvious role in the development of high-tech enterprises and sustainable economic growth, but there is no favorable institutional arrangement for the mechanism of venture capital in China
[8]
Zhimin Dai. 2002. “Venture Capital in China: Institutional Defects and Correction.” Journal of Management Engineering. 1: 16-23.
[9]
Xinyu Li. 1999. “Difficulties and Countermeasures of Developing Venture Capital in China.” Economic Science. 5: 12-19.
[8, 9]
; from 1983 to 1992 in the United States, the contribution rate of venture capital to industrial innovation reached 8%
[10]
Samuel Kortum and Josh Lerner. 2001. “Does venture capital spur innovation, Advances in the Study of Entrepreneurship.” Innovation & Economic Growth. 13: 1-44.
[10]
, and the high return of venture capital was always developed. Along with the stock market, rapid capital turnover can promote enterprise innovation and technological innovation
[11]
Peter Rousseau and Dadanee Vuthipadorn. 2005. “Financial investment and growth: Time series evidence from 10 Asian economies.” Journal of Macroeconomics. 27: 87-106.
[11]
. At the same time, a perfect risk exit mechanism has been set up. The main exit channels of venture capital in the United States are IPO and M&A, while in Germany, the main exit channels are stock repurchase
[12]
Jia Xu and Xiangzhu Xu. 2002. “On the Exit Mechanism of Venture Capital in America and Germany.” Business Research. 22: 16-23.
[12]
. Through the decision-making model of venture capital based on information entropy, the matter-element extension method, and the pricing model of binary tree options, we preliminarily screen the venture projects, evaluate the dynamic profit evaluation function of venture capital in the implementation process, and provide a decision-making basis for the follow-up investment, which can largely solve the adverse selection problem in the process of venture capital
[13]
Mingzhe Tang. 2001. “How to Make Rational Decision of Venture Capital - Introduction of Profit Evaluation Function of Venture Capital.” Journal of Fudan (Social Science Edition). 1: 10-18.
[14]
Mengmeng Ma, Chen Cai and Zhaoxiang Wang. 2004. “Value Evaluation of Enterprise R&D Project Based on Binary Tree Option Pricing Model.” Management Science in China. 3: 23-31.
[13, 14]
. Through the option pricing model, the risk of venture capital projects is evaluated and controlled
[15]
A. K. Dixit and R. S. Pindyck. 1995. “The option approach to capital investment.” Harvard Business Review. 73: 105-115.
[16]
S. Ekern. 1988. “An option pricing approach to evaluation petroleum project.” Energy Economics. 23(3): 91-99.
[15, 16]
.
Most of the scientific and technological financial service models analyzed in these documents are singular, and there is still a certain gap between the comprehensive scientific and technological financial service model and the existing scientific and technological financial demand in China. The need for financial innovation design based on the comprehensive scientific and technological financial service model is urgent.
4. Innovative Service Model of Science and Technology Finance: Operation and Design
The financial service mode of science and technology is to provide financing for science and technology enterprises in all aspects. Whether it can meet the actual requirements of promoting the development of scientific and technological enterprises, the transformation of scientific and technological achievements, and the upgrading of industries has become the core of measuring the efficiency of the scientific and technological financial innovation service model
[17]
Gehrig T. 2000. “Cities and the Geography of Financial Centers.” Cambridge University Press. 2: 11-18.
[18]
Chen Jia. 2010. “Chinese Venture Capital Guiding Funds: policies and practice.” Journal of Chinese Entrepreneurship. 2: 292-297.
[17, 18]
. According to the existing model, all the ways to provide financing for science and technology enterprises are called science and technology finance, and this model mostly exists in the form of loans and financial subsidies, and less as insurance and securities. According to the standards of developed countries, not only should loans and financial subsidies belong to the category and paradigm of innovation, but also science and technology insurance and capital markets such as Nasdaq. However, China's science and technology financial services started late, the existing system of science and technology financial services is not perfect, and the development of insurance and capital markets can also belong to the category of financial innovation. According to the reality of our country, the improvement of financial products, the innovation of capital markets and the application of Internet finance are the basis of the operation of the innovative service mode of science and technology finance.
Various forms of science and technology finance in China include: venture capital, bank science and technology loans, agricultural science and technology micro-loans, science and technology guarantee systems, multi-level capital market cultivation, science and technology insurance, science and technology bond issuance, etc., as well as "promoting the transformation of scientific and technological achievements discount loan" which combines finance and finance, and the way in which the transformation of scientific and technological achievements guides funds to drive informal finance.
5. Conclusion
To design an innovative financial service mode of science and technology to meet the demand for funds for transformation of achievements and sustainable development of science and technology enterprises, especially the start-up capital demand of small and medium-sized science and technology enterprises and the investment demand of key technology developments. At the same time, it is necessary to meet the financial requirements for the transformation of intangible assets such as inventions and patents into enterprise assets. This study analyses the characteristics, constituent factors and related influencing factors of financial products provided by the innovative financial service model of science and technology, identifies the cost range, distinguishes the commercial profit space and the level of policy subsidies. According to the operating characteristics, asset status, return on income, cash flow direction and risk degree of small and medium-sized technology-based enterprises, corresponding financial products should have long-term and high-risk compensation arrangements. Therefore, we should pay attention to the price and value factors of innovative financial products to ensure the sustainability of suppliers. In the process of determining the value of financial products, risk-free interest rates, inflation rates, risk factors within the science and technology industry, term factors, default risk factors and force majeure risk factors should be considered. This investigation analyses the impact of various factors on the value of financial products, and defines the quantitative criteria for the demarcation line between commercial profits and policy subsidies of innovative scientific and technological financial products. Thus, it can not only guarantee the profit level of the supplier of science and technology finance in order to sustainably support the development of science and technology enterprises and the effective transformation of scientific and technological achievements, but also provide quantitative criteria for the government to formulate industrial restructuring policies.
Acknowledgments
The current study was funded by: (1) Guangdong Provincial Key Laboratory of Technology and Finance & Big Date Analysis (2017B030301010); (2) Construction on New technology Credit Service Platform Based on O2O Model (2017B080802004); (3) Guangdong Key Research Base of Technology and Finance (2014B030303005); (4) Information Platform of Comprehensive Service Centre for Guangdong Technology and Finance (2015B080807015); (5) Platform of Credit Financing and Trade for Guangdong Technological Enterprises (2014B080807035); (6) Construction on New technology Credit Service Platform Based on O2O Model (2017B080802004).
Conflicts of Interest
The authors declare no conflicts of interest.
References
[1]
Ruihua Zhu and Bin Hua. 2010. “Joint Credit Guarantee and Innovation of Financing Mechanisms for Technological SMEs: A Case Study of Hangzhou”. Credit Reporting. 5: 19-25.
[2]
Zhou Li. 2009. “A Comparative Analysis of Typical Patterns of Intellectual Property Pledge Financing in China: From the Perspective of Legal Sociology.” Electronic Intellectual Property Rights. 11: 11-16.
[3]
Yan Wu and Lijie Mu. 2009. “Learn from Silicon Valley banking model to broaden financing channels for high-tech SMEs.” Theoretical Realm. 7: 13-19.
[4]
Yin Le. 2009. “Silicon Valley Banking Model Asymptotic.” Chinese Science and Technology Wealth. 3: 18-23.
[5]
Jingxing Yang and Ronggang Zhang. 2006. “Agglomeration Survival and Integration Innovation - On the Integration Development of Small and Medium-sized Enterprises and Financial Industry.” Contemporary Economic Science. 2: 16-21.
[6]
Jianhui Lian, Huanmin Sun and Huibo Zhong. 2005. “Financial Enterprise Cluster: Economic Nature, Efficiency Boundary and Competitive Advantage.” Financial Research. 6: 21-28.
[7]
Lilai Xu. 2009. “Business incubation in China: Effectiveness and perceived contributions to tenant enterprises.” Management Research Review. 33(1): 90-99.
[8]
Zhimin Dai. 2002. “Venture Capital in China: Institutional Defects and Correction.” Journal of Management Engineering. 1: 16-23.
[9]
Xinyu Li. 1999. “Difficulties and Countermeasures of Developing Venture Capital in China.” Economic Science. 5: 12-19.
[10]
Samuel Kortum and Josh Lerner. 2001. “Does venture capital spur innovation, Advances in the Study of Entrepreneurship.” Innovation & Economic Growth. 13: 1-44.
[11]
Peter Rousseau and Dadanee Vuthipadorn. 2005. “Financial investment and growth: Time series evidence from 10 Asian economies.” Journal of Macroeconomics. 27: 87-106.
[12]
Jia Xu and Xiangzhu Xu. 2002. “On the Exit Mechanism of Venture Capital in America and Germany.” Business Research. 22: 16-23.
[13]
Mingzhe Tang. 2001. “How to Make Rational Decision of Venture Capital - Introduction of Profit Evaluation Function of Venture Capital.” Journal of Fudan (Social Science Edition). 1: 10-18.
[14]
Mengmeng Ma, Chen Cai and Zhaoxiang Wang. 2004. “Value Evaluation of Enterprise R&D Project Based on Binary Tree Option Pricing Model.” Management Science in China. 3: 23-31.
[15]
A. K. Dixit and R. S. Pindyck. 1995. “The option approach to capital investment.” Harvard Business Review. 73: 105-115.
[16]
S. Ekern. 1988. “An option pricing approach to evaluation petroleum project.” Energy Economics. 23(3): 91-99.
[17]
Gehrig T. 2000. “Cities and the Geography of Financial Centers.” Cambridge University Press. 2: 11-18.
[18]
Chen Jia. 2010. “Chinese Venture Capital Guiding Funds: policies and practice.” Journal of Chinese Entrepreneurship. 2: 292-297.
Li, X., Liang, Z., Li, T. H., Yu, F., Li, X., et al. (2024). Innovative Service Model of Science and Technology Finance in China. Journal of Business and Economic Development, 9(4), 124-127. https://doi.org/10.11648/j.jbed.20240904.11
Li, X.; Liang, Z.; Li, T. H.; Yu, F.; Li, X., et al. Innovative Service Model of Science and Technology Finance in China. J. Bus. Econ. Dev.2024, 9(4), 124-127. doi: 10.11648/j.jbed.20240904.11
Li X, Liang Z, Li TH, Yu F, Li X, et al. Innovative Service Model of Science and Technology Finance in China. J Bus Econ Dev. 2024;9(4):124-127. doi: 10.11648/j.jbed.20240904.11
@article{10.11648/j.jbed.20240904.11,
author = {Ximei Li and Zixuan Liang and Tony Haotong Li and Fuji Yu and Ximei Li and Chiming Wei},
title = {Innovative Service Model of Science and Technology Finance in China
},
journal = {Journal of Business and Economic Development},
volume = {9},
number = {4},
pages = {124-127},
doi = {10.11648/j.jbed.20240904.11},
url = {https://doi.org/10.11648/j.jbed.20240904.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20240904.11},
abstract = {This investigation analyses the financial dependence of the transformation of scientific and technological achievements, the effective connection between scientific and technological resources and financial resources, the development of emerging industries, the upgrade of technological levels and the optimization of industrial structures, and the financial support required for technological innovation and R&D of high-tech enterprises as well as small and medium-sized technological enterprises. It is pointed out that the improvement of financial products, the innovation of capital markets and the application of internet finance are the operational basis of the innovation service mode of science and technology finance. Correspondingly, the upper level design at the policy level provides the basis for the development of the appropriate service model of technological and financial innovation.
},
year = {2024}
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TY - JOUR
T1 - Innovative Service Model of Science and Technology Finance in China
AU - Ximei Li
AU - Zixuan Liang
AU - Tony Haotong Li
AU - Fuji Yu
AU - Ximei Li
AU - Chiming Wei
Y1 - 2024/10/18
PY - 2024
N1 - https://doi.org/10.11648/j.jbed.20240904.11
DO - 10.11648/j.jbed.20240904.11
T2 - Journal of Business and Economic Development
JF - Journal of Business and Economic Development
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PB - Science Publishing Group
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UR - https://doi.org/10.11648/j.jbed.20240904.11
AB - This investigation analyses the financial dependence of the transformation of scientific and technological achievements, the effective connection between scientific and technological resources and financial resources, the development of emerging industries, the upgrade of technological levels and the optimization of industrial structures, and the financial support required for technological innovation and R&D of high-tech enterprises as well as small and medium-sized technological enterprises. It is pointed out that the improvement of financial products, the innovation of capital markets and the application of internet finance are the operational basis of the innovation service mode of science and technology finance. Correspondingly, the upper level design at the policy level provides the basis for the development of the appropriate service model of technological and financial innovation.
VL - 9
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The Key Laboratory of Technology, Guangdong University of Finance, Guangzhou, China
Zixuan Liang
The International Scientific Research Center, Veritas Collegiate Academy, Arlington, VA, USA
Tony Haotong Li
The International Scientific Research Center, Veritas Collegiate Academy, Arlington, VA, USA
Fuji Yu
The International Scientific Research Center, Veritas Collegiate Academy, Arlington, VA, USA
Ximei Li
Research Unit of Scientific Finance, Guangdong University of Finance, Guangzhou, China
Chiming Wei
The Key Laboratory of Technology, Guangdong University of Finance, Guangzhou, China; The Key Laboratory of Scientific Innovation, American Nanomedicine Institute, Baltimore, MD, USA
Li, X., Liang, Z., Li, T. H., Yu, F., Li, X., et al. (2024). Innovative Service Model of Science and Technology Finance in China. Journal of Business and Economic Development, 9(4), 124-127. https://doi.org/10.11648/j.jbed.20240904.11
Li, X.; Liang, Z.; Li, T. H.; Yu, F.; Li, X., et al. Innovative Service Model of Science and Technology Finance in China. J. Bus. Econ. Dev.2024, 9(4), 124-127. doi: 10.11648/j.jbed.20240904.11
Li X, Liang Z, Li TH, Yu F, Li X, et al. Innovative Service Model of Science and Technology Finance in China. J Bus Econ Dev. 2024;9(4):124-127. doi: 10.11648/j.jbed.20240904.11
@article{10.11648/j.jbed.20240904.11,
author = {Ximei Li and Zixuan Liang and Tony Haotong Li and Fuji Yu and Ximei Li and Chiming Wei},
title = {Innovative Service Model of Science and Technology Finance in China
},
journal = {Journal of Business and Economic Development},
volume = {9},
number = {4},
pages = {124-127},
doi = {10.11648/j.jbed.20240904.11},
url = {https://doi.org/10.11648/j.jbed.20240904.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20240904.11},
abstract = {This investigation analyses the financial dependence of the transformation of scientific and technological achievements, the effective connection between scientific and technological resources and financial resources, the development of emerging industries, the upgrade of technological levels and the optimization of industrial structures, and the financial support required for technological innovation and R&D of high-tech enterprises as well as small and medium-sized technological enterprises. It is pointed out that the improvement of financial products, the innovation of capital markets and the application of internet finance are the operational basis of the innovation service mode of science and technology finance. Correspondingly, the upper level design at the policy level provides the basis for the development of the appropriate service model of technological and financial innovation.
},
year = {2024}
}
TY - JOUR
T1 - Innovative Service Model of Science and Technology Finance in China
AU - Ximei Li
AU - Zixuan Liang
AU - Tony Haotong Li
AU - Fuji Yu
AU - Ximei Li
AU - Chiming Wei
Y1 - 2024/10/18
PY - 2024
N1 - https://doi.org/10.11648/j.jbed.20240904.11
DO - 10.11648/j.jbed.20240904.11
T2 - Journal of Business and Economic Development
JF - Journal of Business and Economic Development
JO - Journal of Business and Economic Development
SP - 124
EP - 127
PB - Science Publishing Group
SN - 2637-3874
UR - https://doi.org/10.11648/j.jbed.20240904.11
AB - This investigation analyses the financial dependence of the transformation of scientific and technological achievements, the effective connection between scientific and technological resources and financial resources, the development of emerging industries, the upgrade of technological levels and the optimization of industrial structures, and the financial support required for technological innovation and R&D of high-tech enterprises as well as small and medium-sized technological enterprises. It is pointed out that the improvement of financial products, the innovation of capital markets and the application of internet finance are the operational basis of the innovation service mode of science and technology finance. Correspondingly, the upper level design at the policy level provides the basis for the development of the appropriate service model of technological and financial innovation.
VL - 9
IS - 4
ER -
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