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By Ma Jun & Ma Xiaobai, Members of the Research Team on “Stimulating the Vitality of Innovative Entities”, Enterprise Research Institute, DRC

Research Report No. 120, 2016 (Total 5003) 2016-9-9

Abstract: Against the backdrop of IT application and globalization, the innovation competition is moving swiftly toward the early stage of technical applications. A large number of innovative enterprises has broken through the traditional linear growth pattern, made rapid expansion in the early industrial development stage, and reached a staggering scale even without a clear profit target or a clear profit pattern. The new mode of the innovative enterprises’ rapid growth involves a complex mechanism, which can be described as "burn the money of investors, win the heart of users, realize the dream of entrepreneurs, and deprive the foothold of competitors". The reasons of the new model include: the accelerated pace of technological revolution, the deepening of globalization, the scale economy of innovation and the network effect. We should attach great attention to the major impact caused by innovative enterprises’ rapid growth new model on national innovation, which has increased the difference between the first movers’ advantage and late movers’ disadvantage, and aggravated the development imbalance between different countries and regions. To promote innovation through institutional reform, it is necessary to encourage and guide social capital to invest in the emerging industries, improve the tax system, implement the employee stock ownership plans, promote the transformation of scientific and technological results into practical production forces, improve the Company Law, expand enterprise innovation space, improve industry regulation and promote the fair competition between the old and new business forms.

Key words: enterprise innovation, business model, policy