(Source: "Beijing Daily" 2024-12-02)
On December 2, Professors Yu Mei and Professor Bian Jiangze from the China w88 casino of Finance, w88 casino, and Professor Zhang Ji from the w88 casino of Insurance published a signed article "Cultivation of Patient Capital to Promote Hard Technology Innovation" on the theoretical page of "Beijing Daily".
Promoting financial efficiency to empower new productive forces is not only an important measure to deepen the financial supply-side structural reform, but also an important action to implement the spirit of the Central Financial Work Conference. Strengthening "patient capital" and promoting the innovation and development of hard science and technology require the coordinated efforts of the government, market, investment institutions and other parties.
Actively create a policy environment that cultivates patient capital. Strengthen state support for hard technology companies in the seed stage, especially in terms of policy guidance, financial capital injection and fiscal subsidies. Given that seed-stage technology companies carry extremely high risks of uncertainty, capital’s willingness to invest in them is generally sluggish. To deal with this challenge, it is recommended that targeted subsidy policies be introduced at the national level to encourage and protect initial investment. Cities with abundant funds and developed hard science and technology, such as Beijing, Shanghai or Shenzhen, can be piloted and gradually promoted. Specifically, we can explore the establishment of a special fund for technological innovation in the seed stage to provide financial support to technology companies in their infancy and ensure that these innovative entities can obtain the necessary nutrients for growth. At the same time, the development of technology insurance mechanisms should be actively promoted to disperse and alleviate the high-risk pressure that is independently borne by a single enterprise. Given that seed-stage companies face the highest probability of failure, the introduction of technology insurance is particularly important. This mechanism can provide a financial buffer from insurance compensation when a business venture is frustrated, mitigating losses for business founders and investors; and when a business venture succeeds and achieves results, the insurance company can also share the success dividends according to the agreed ratio, thus forming a virtuous cycle of risk sharing and benefit sharing. The establishment of this mechanism can not only effectively promote the healthy growth of technology companies, but also further stimulate the confidence and enthusiasm of all sectors of society for early investment in hard technology companies.
Nurture patient capital and actively guide various innovative elements to support the development of hard technology small and medium-sized enterprises. Create an atmosphere where the government leads the investment and institutions follow the investment, guide investment institutions to pay attention to the long-term value of hard technology companies, and drive more capital to become long-term capital and patient capital. Make full use of state-owned patient capital as leverage, give full play to the guiding role of government guidance funds and local industrial funds, and attract various social funds to enter the construction of the local hard technology industry chain through the leveraging effect of "four or two levers". Guide and mobilize all types of social capital to "invest small, invest early, and invest hard" and cultivate and strengthen patient capital. In terms of the financing environment, we will focus on guiding private equity and venture capital funds to provide support and assistance to the development of advantageous enterprises to alleviate the problems of lack of capital and insufficient risk-taking capabilities of enterprises. Further create a good financing environment, attract more venture capital to enter the cultivation process of hard technology enterprises as early as possible, and give full play to the financing role of venture capital in hard technology enterprises. By mobilizing social capital, we will increase investment in the field of hard technology start-ups, give play to the market value-oriented role, and select outstanding hard technology companies to focus on cultivating. On the other hand, it is also necessary to strengthen national and local support and guidance for entrepreneurial investment, establish innovation funds specifically to serve small and medium-sized hard technology companies, give full play to the functional value of scientific and technological achievements and industrial incubation funds, and focus on the cultivation and development of small and medium-sized hard technology companies.
Create diversified investment entities and strengthen patient capital. Continue to improve the market mechanism for cultivating patient capital, attract private capital, long-term social security, commercial insurance, and pension insurance to enter patient capital, and create diversified investment entities. Encourage more angel funds and other types of social capital to enter the enterprise during its start-up period to accelerate the incubation of enterprises. Pay attention to guiding and giving full play to the different roles of sovereign wealth funds, public pension insurance, commercial insurance institutions, etc. in various types of patient capital, and build a multi-level patient capital system. Compared with other funds, pension funds and insurance funds have long-term, large-scale and stable characteristics, which are consistent with the "long cycle, slow return" of patient capital. Therefore, insurance funds and pension funds are one of the important sources of patient capital. The proportion of insurance funds and pension funds in patient capital should be encouraged and increased. On the one hand, it provides new investment channels for the development of the elderly care industry, and on the other hand, it can also strengthen patient capital. While increasing government investment, we can learn from foreign experience. For example, the Small Business Innovation Research Program in the United States sets aside a certain proportion of funds in departments with higher R&D expenditures to form a fund pool, which is used to fund the undertakers of scientific research projects in small businesses and promote the innovation of start-up enterprises. At the same time, by establishing a certain risk-sharing mechanism, such as using national credit as a guarantee to provide certain insurance for the technological research and development of scientific and technological innovation enterprises, it can not only effectively stimulate the innovation of start-up enterprises, but also attract the investment enthusiasm of social capital, form a risk-sharing mechanism, and promote the transformation of scientific and technological achievements.
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