Efficient Technological Innovation: The Foundation of NGEs’ Survival and Development in the New Stage

Abstract

Technological innovation is the inevitable choice for transforming models of economic growth and optimizing the economic structure; additionally, the promotion of NGEs' capacity for technological innovation is a measure of China's ability to meet the demands of economic development in the new period. The 11th Five-Year Plan of China for National Economic and Social Development proposed to ``accelerate the establishment of a technological innovation system based around the centrality of enterprises, with the market as the orientation, and the integration of production, education, and research, and formulate a basic institutional framework of independent innovation.'' The Decision on the Implementation of Science and Technology Development Plan and Enhancement of Independent Innovation Capabilities released by the State Council clearly states its intention to ``practically make enterprises the principal part of research, development, and investment, the subject of technological innovation, and the main implementer of innovation,'' and `` to value and fully utilize the role of technological NGEs as the driving forces behind independent innovation and the development of high-tech industries, to create a fair competitive environment, and encourage NGEs to grow both larger and stronger and to participate in international competition.'' During the 12th Five Year Plan, the Chinese Government will give full support to the cultivation of the independent innovation capacities of the country's enterprises, and China's NGEs are likely to welcome the golden opportunity for technological innovation. During this period, in the face of fierce competition with SOEs and FFEs, only by relying on efficient technological innovation can China's NGEs gain competitive advantages in the future. The most important factor in accelerating the transformation of the economic development model is to change the model of economic growth that mainly depends on factor input into one mainly depending on efficiency improvements, and the key to this is technological innovation. Although extensive research has been done on the economic effects of Chinese enterprises' technological innovations, empirical analysis on the efficiency of technological innovation of China's NGEs is almost nonexistent. As they make up a large proportion of Chinese enterprises, NGEs' technological innovation is critical to the construction of an innovation-oriented country. Therefore, the improvement of NGEs' capacity and technological innovation efficiency, as well as the extensive-to-intensive transformation of China's economic growth model, is an important approach to the new path of industrialization and the structural adjustment of China's national economy. This chapter analyzes the technological innovation of China's NGEs from the perspectives of its status quo and efficiency, which can not only fill in certain gaps in the existing literature but also contribute to the promotion of NGEs' technological innovation capacity and China's transformation of its economic growth model.