Private enterprises are both the main field of entrepreneurship and a major force in technological innovation – and most of them are SMEs. Two years after the State Council issued its opinion on supporting private enterprise reform and development, how have support measures for small and medium private firms fared? Reporters asked officials, companies and experts.
Innovation support and financing services
Wuhan JiAo Information Technology, a ‘little giant’ firm, won a first-class State Science and Technology Progress Award for high-precision intelligent processing of space-air-ground remote sensing data.
‘From project launch to the award, it came from close industry-academia-application cooperation,’ said company head Wang Lin: Wuhan University’s remote sensing school initiated the research in 2013 with the university team providing the underlying technology and the company application support; results came in 2017, then the national mapping bureau ran pilot production and industrialisation – eight years end to end.
Bringing SMEs into major research projects injects strong momentum: the company keeps R&D spending near 8% of revenue and posted clear revenue growth in 2021.
The little giants add up: in the 2020 national science and technology awards, 13 projects involving 14 specialised ‘little giant’ firms won, 10.2% of all enterprise-participated awards. Over half of little giants spend more than RMB 10 million a year on R&D, over 60% work in industrial foundation fields, and over 70% have worked their field for a decade – filling gaps and blanks across manufacturing.
MIIT pairs enterprise cultivation with industry strengthening: central finance has committed over RMB 10 billion in awards across three batches to support 1,000-plus little giants’ innovation investment, and 22 provinces have issued special financing plans with banks, creating dedicated credit products for specialised SMEs.
Digital transformation is now compulsory
In Jinan’s Zhangqiu district, Mingfeng Machinery’s workshops run casting, machining, inspection and painting with robots, and a smart-workshop screen shows equipment data in real time. ‘Transform or fall behind,’ said chairman Zhao Zhenchang – isolated equipment once made fine-grained control impossible. Adopting an Inspur industrial internet solution lifted production management efficiency 15% and order conversion 10%.
Volcengine’s ‘spark programme’ offers its AI platform free to over a thousand small firms; State Grid’s Jiaxing subsidiary built an industrial internet platform on grid infrastructure offering carbon-cutting production plans. Attracting SMEs to cloud platforms via industrial internet helps solve high costs and low efficiency, said Lu Chuncong, president of the China Academy of Industrial Internet. MIIT’s special digital empowerment action has released 254 service products and run technical training.
Surveys find transformation going well overall: over half of surveyed SMEs are in the implementation stage, with little giants and single champions leading; satisfaction is high and spending is shifting from hardware to software and solutions; transformation deepens from single-point applications to full-process empowerment. But SMEs’ weak digital foundations, limited risk tolerance and security worries leave many unable, unwilling or afraid to transform – early-stage firms face funding pressure and talent shortages, and policy and technology support needs broader reach.
‘For manufacturing SMEs, digital transformation is no longer an elective – it is a compulsory course for survival and long-term development.’ MIIT will build 100 replicable empowerment scenes for SMEs to adopt directly and cultivate digital service platforms offering diagnostic assessment.
Platform-based support, with real challenges
Tongxiang’s Puyuan sweater innovation park, a national SME entrepreneurship demonstration base, hosts nearly 300 sweater sales, processing and design firms. When shipping costs surged and orders thinned in 2021, the park guaranteed bank financing of over RMB 40 million for one tenant, relieving more than 20 small firms that could not take orders alone, with 10% sales growth expected.
Nationwide, China has cultivated 392 national small and micro enterprise entrepreneurship bases and 703 public service demonstration platforms, spurring 3,300-plus provincial platforms and 2,500-plus provincial bases.
Challenges remain. Talent: SMEs attract and keep skilled innovators less well than big firms – ‘we have become a talent pipeline for big companies,’ Wang said, asking for more policies aimed at young backbone talent, not just top-tier awards. Financing: innovation needs stable long-term funding that small firms cannot self-fund, and mortgage guarantees and listing thresholds keep bank loans and capital markets hard to reach. Parks: small firms often need a push, and park operators hope for more tax incentives on public service facilities. MIIT says it will refine implementation, supporting SMEs on technology, funding, talent and land to raise innovation capability and specialisation.
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