Public Finances To Promote The Role Of Technological Innovation And Policy Research

The rapid development of science and technology and its huge promotion to the socio-economic development has now become one of the main characteristics of the times. Governments continue to promote national scientific and technological innovation and make it as an important element of enhancing their own competitiveness. The competitions in comprehensive national strength in different countries in the new era have been evolved more and more the national competitions of scientific and technological innovation. Study on the effects of public finance on promoting the scientific and technological innovation is a substantial topic meeting the needs of the times.On the sudden financial crisis, the world economy has been seriously challenged, countries have taken measures to resist attacks on the financial crisis. For this reason, China promulgated a series of policies and actions, especially the increase of 4 trillion government investment with the largest effects. Whether the finance and policy tools to stimulate the economic growth can effectively promote China's scientific and technological innovation level has become an important key to turn the country's economic crisis into an opportunity and a key point whether China's economy can implement the strategic adjustment of industrial structure to achieve sustained economic growth.Study on the promotion of public finance to scientific and technological innovation in terms of economics is to know from the scarcity of resources how the government spending of public resources to promote the socio-economic growth on the basis of scientific and technological progress. In theory, the importance of government innovation has been put into an unprecedented high level following the advent of a knowledge-based economy.On the 21st century, science and technology has become the primary productive force and its relationship to economic development is getting closer: scientific and technological progress is a key factor in promoting economic development; scientific and technological innovation is the driving force of economic restructuring; scientific and technological development depends on economic development and is constrained by economic development. Scientific and technological innovation to a large extent has the non-competitive and non-exclusive features, so its characteristic qualities of public goods are very obvious. Therefore when entirely controlled by the market, the scientific and technological innovation could result in market failures, thus it needs the intervention of government to compensate for market imperfections. It builds on making the innovation as the primary productive force of economic growth to bring market mechanism into fully play in allocating resources, and also dependants on its characteristics of public goods and the functions of government.The effects and promotions of fiscal policy on science and technology innovation activities can be brought into action by four ways: Firstly, through direct support of scientific and technological innovation to provide financial assistances, subsidies or guides for science and technology activities by the financial funding; Secondly, through the use of tax leverage to guide the direction of science and technology innovation; Thirdly, through the government procurement policy to guide enterprises to accelerate the technological and product innovation, and to service for the country's goal of upgrading the industrial structure; Fourthly, through special support towards the characteristics of SMEs to promote scientific and technological innovation and fulfill its unique role.Direct financial investment in science and technology is an important component of social science and technology investment. The main direct financial investment is the substantial research projects related to the national strategies in the basic research fields where the market failure is more serious. Direct financial investment has played a positive role in enhancing the capacity of China's scientific and technological innovation. At present, China should focus on improving the Government's science and technology-oriented policies model of financial investment, further putting the enterprise into the location of main body of scientific and technological innovation, safeguarding the competitiveness of industry or industrial policy, strengthening the norms of financial management system, and continuously improving the efficiency and level of financial investment in science and technology.The main functions of tax incentive which is also a kind of abnegation to tax revenue and its policy are to encourage enterprises to increase investment in research and development and to adopt advanced technology and equipment. The current world's scientific and technological development direction of tax policy includes mainly indirect preferential policies and many kinds of preference means. Along with the economic development and the increase of scientific and technological innovation level, China's current limitations of tax policy in science and technology are becoming evident. Our country's scientific and technological development direction of tax policy includes making full use of indirect tax preferences, the main categories of turnover taxes, and the same importance of Enterprise and personal income tax.The establishment and implementation of government procurement policies of preferential purchase can encourage enterprises for independent innovation, promote the development of science and technology, and achieve a huge role in the increase of national competitiveness. The focus of government procurement is on the support towards the early products of the product life cycle, thus to create a strong market demand for independent innovation, and to stimulate innovation activities of enterprises and to provide a long-term stability and a strong basis power for economic development. The achievement of such a role requires a set of well-established system of government procurement policy, including the location, organization, implementation and coordination of policies. Therefore, the Chinese government should establish the preferential purchase and ordering system of independent innovation products, optimize its evaluation approaches, make up the government procurement catalog of independent innovation, and strengthen collaborations between different departments, thus to play a active role of government procurement policy in promoting scientific and technological innovation.Small and medium-sized enterprises (SMEs) are the most active factor of scientific and technological innovation. More problems of market failure would be occurred during the process of scientific and technological innovation due to the characteristics of SMEs. Therefore, the innovative solution to help SMEs in the process of market failures and to stimulate their creative vitality is an important component of fiscal policy. The main ways of financial support to innovation of SMEs include direct support, venture capital, loan guarantees, venture capital investment and tax preferences. China's fiscal policy to promote the scientific and technological innovation of SMEs initiated lately, so, it should now improve the regulations, increase financial input for the innovation fund, promote the diversification of sources of venture capital, introduce the targeted tax incentives policies, and strengthen financial support for SMEs, thus to play the innovative potential of common SMEs.The establishment of financial science and technology input-output system of performance evaluation is an important way to improve the efficiency of financial investment in science and technology. Financial performance evaluation of input-output system is designed to achieve the desired objective by improving the organizational framework, taking a reasonable way to implement the performance evaluation, determining a reasonable content of performance evaluation, and establishing scientific index system of performance evaluation and on this basis, making full use of the results of performance evaluation to provide references for strengthening project management, monitoring and evaluation, also to provide useful experiences in improving the financial decision-making level of investment in science and technology.This article is divided into eight sections of four parts.Part one which is the introduction part of this article describes the background, research ideas and research meanings as well as the literature review, and recalls systematically the theory of public finance, science and technology innovation, promotion of finance to scientific and technological innovation, thus to lay a foundation for further analysis.Part two is the theoretical study of this article, including Chapter I, Chapters II and III. Chapter I has studied the theoretical framework of the financial promotion for scientific and technological innovation, and has discussed the essentiality of public finances to promote scientific and technological innovation. Chapter II has thoroughly studied the approaches of the financial policies to promote scientific and technological innovation and its structure mechanism, including direct financial investment, tax incentives, government procurement, the main mechanism of SMEs policy, and has discussed the corresponding international experiences. Chapter III has studied the performance evaluation system of the financial investment in science and technology, and has shown the important role of the performance evaluation to promote scientific and technological innovation, and has considered the establishment of the performance evaluation system on the technical basis.Part three is the study of reality issues in this article, including Chapter IV, Chapter V, Chapter VI and Chapter VII. This four chapters on the four most important ways of the public finances have analyzed the public finance mechanisms to promote technological innovation, the mode of action, the current problems and related policies recommendations. Chapter IV mainly analyzed the current status, existing problems, as well as the effects of our public finance direct investment on the promotion of scientific and technological innovation. Chapter V has analyzed China's tax policy status, roles, problems and further actions to promote scientific and technological innovation for finance policy. Chapter VI,on the basis of theoretical analysis and drawing on international experiences, towards the current actual situation of China's government procurement system, points out the development direction of China's public finances further to improve the government procurement system and to promote the development of scientific and technological innovation. Chapter VII focuses on the discussions the public finance policy to promote innovative of SMEs, which is on the basis of the front chapters, from different and integrated perspectives of institutional mechanisms and styles to provide the corresponding recommendations about how the public finance to promote the scientific and technological innovation of SMEs.Part four is a summary of the study which analyzes the innovation and research difficulty as well as the thesis contents for further improvement.