Comparative Research On Business Incubators And Venture Capital

In modern society, the employment of science and technology in economy is an important indicator to a country'strengths. High-tech industries became a shining spot in economic growth gradually. China faces the prominent task of economic transition from extensive to intensive. It needs to rely on scientific and technological strength. In particular, it is possible and necessary to promote technological innovations and transformation by external forces. High-tech means high-venture and high-value. Focused on the economic development and business profits, business incubators and venture capital emerged.This paper aims to provide a brief introduction and analysis of business incubator and venture capital,and summarizes their similarities, differences, and problems. They are similar in the relationship with enterprises, ways of services, ways of earnings, term of investment, the quality of employees. They are different in sponsorship, objectives, functions, stages of attention, sources of profit. As so many common features they have, there are some problems. For example, shortage in research funding, non-standard in intermediary institutions, imperfect in fund withdraw, and the need to protect the intellectual property right and intelligence resources, and so on. In addition, business incubators and venture capital have their own inherent problems: some business incubator projects practice blindly, ignored the quality and efficiency. Some venture capital invested mature enterprise only, with expectation to control risk. Those patterns of investment hinder the technological innovation. In order to meet the needs of developing high-tech enterprise, to promote technological innovation and economic development, it is urgent to solve those problems. The author gives corresponding countermeasures: government should keep increasing investment in science, at the same time, use multiform policies, such as tax privilege, government purchase or subsidize new enterprise, encourage the public to invest science and technology industry. Supervise intermediary service institutions. Reconstruct financial system, protect intellectual property right, and train proper talented staff. In order to resolve the issues in the business incubator and venture capital, we could development specialized incubators and promote the combination between venture capital cooperate and business incubator.