The Effectiveness of Government Policies on Technology-Based SMEs and Entrepreneurship: a Case Study of the Technology-Based SMEs in Beijing, China

Abstract

The increasingly significant role played by small and medium sized enterprises (SMEs) and entrepreneurship in national economies has attracted growing attention. Recent trends have increasingly emphasised the value of knowledge. The challenge within the 21st century is the importance of the productivity of service and knowledgeable workers, as well as strategic flexibility and innovation. It is suggested that high level of innovation, R&D and productivity are positively related. Technology-based SMEs are specifically selected as the object of this thesis since they exhibit most of the characteristics of the three terms, “SMEs”, “innovation” and “entrepreneurship”.

SMEs may come across significant constraints because of their own limitations, such as financial constraints, human capital shortages, and weak market power. These constraints are even more serious for technology-based SMEs due to their industrial nature. As a consequence, technology-based SMEs tend to have a higher failure rate than non-tech SMEs and large firms. However, the benefits brought by them cannot be neglected. For example, the return of R&D on a social level is higher than the private level, which highlights the importance of technology-based SMEs for national development. Therefore, it motivates governments to increase support for technology-based SMEs.

This thesis aims to examine the effectiveness of government policies on technology-based SMEs and entrepreneurship in Beijing, China. Some researchers have studied and examined the policies, but mainly focussed on the description of policy frameworks and policy dynamics. There is a lack of studies examining the effectiveness of policies from the perspective of entrepreneurs in this context. This thesis fills this gap.

This thesis makes both a theoretical and methodological contribution to the entrepreneurship studies literature through the holistic case study approach. A mixed-method approach of document analysis, interview and a questionnaire are used to understand the interaction between policies and technology entrepreneurs. The key findings of this thesis are that policies have strong positive effects on the promotion of entrepreneurship and SMEs. But there are still some negative points when implementing policies, such as uneven filter criteria and supervision system between new and established firms.