A Study On Institutional Environment For Effective Operation Of The Technological Innovation System In Small And Medium-sized Enterprises

The system of technological innovation in small and medium-sized enterprises(SMEs) plays an important role in national innovation system.With the growingcognition of the importance of the technological innovation in the SMEs, it goeswithout saying to construct a system for technological innovation. However, weneed an institutional environment as guarantee to smoothly run the system.Guarantee system can reduce the trade cost of technological innovation, create the conditions of cooperation and provide encouraging institution. It is good for the profit internalization of the effective operation of the system for technological innovation in SMEs. Although some policies and laws on it had been made in the past decade, the majority were of principle and monomial and no integrated institutional system had been formed which consequently impacted on the progress of technological innovation.Based on the concept frame of the technological innovation system for SMEs, this essay applies institutional economics theory to analysis of intimate factors for effective operation of the system. These factors can be classified into three aspects, namely, motivating the SMEs to be the principal part of technological innovation, regulating the government's macro-system arrangement for the technological innovation of SMEs, and strengthening the lawful protection for the technological innovation of SMEs.