Financial Innovation About Technology Innovation

The whole process of technology innovation involves uncertainty of technology, marketing, distribution of profit and policy environment, which enhance the crisis of technology innovation tremendously: invention crisis, manufacture crisis, marketing crisis, management crisis and development crisis. High degree of crisis demands high degree of income undoubtedly. I divide the process into six parts and analyze characters of money demand according to different part. The research on function of technology to economic progress has been on for a long time. J.A.schumpeter appreciated innovation very much but also regard it as a external element to economic growth. Till 1986, Arrow brought forth a new kind of production function which involved originally human resource and technology, which now is regarded as milestone of internalization of the technology. From 60-70s' of 20 century, the new policy economy school represented by Coase has been brilliant, and it has become a most charming theory that has brought on innovative change on traditional economy research and policy research. Two economists:Coase and Ross belongs to this school has got Nobel prizes one after one, which has expanded the influence of this school extremely.There is no conclusive theory about if technology decides policy or policy decides technology. I agree on the last point. There two kinds of policy transformations: compelling policy transformation and enticing policy transformation. They are public goods with character of externalities, existing and coming into effect at the same time. So government is a better suppler. The thing which the government should pay attention to is that the policy transformation should be coincident with external environment. There are seven kinds of ways of money supply but there only three main and deserving analysis ways: bank capital, venture capital and capital market. Which all originated from Western developed countries and achieve great success. Our country has adopted these policies from 80's but did not get expectant result.Firstly, I analyze the theories about function of technology to economy growth, then discuss policy function. The conclusion is policy decide innovation then decide economy growth. Secondly, I analyze the relationship between uncertainty and money demand and supply about technology, then attain the conclusion that money is the blockstone to innovation. Finally, I analyze three policies which we has adopted but did not bring good results. Thus I try to find the defects and give some advices from discussion on experience of other countries.