Entrepreneurship: the missing ingredient in China's STIPs?

China is concerned to improve the technical capability of its industry. It has chosen Science and Technology Industry Parks (STIPs) as the model for incubating its R&D capability and driving its hi-tech policy. Against this background, the authors examine two main issues. First, we review assessments of university science parks in the UK and a wider context extracted from the literature before examining specifically China's R&D intensity and hi-tech policy. Second, we examine the performance of hi-tech companies situated on STIPs and those located outside STIPs, comparing their success in commercializing technology. We pay particular attention to the role of entrepreneurship in this activity by those engaged in it. Our findings are based on secondary quantitative data and qualitative data collected by means of interviews and focus groups in the Beijing and Shanghai areas in March 2004. From our research it is clear that China lags behind OECD countries in its R&D capability and the technology transfer rate is low, hampering China's hi-tech potential, although China is achieving some success in hi-tech exports, notably of ICT goods. Furthermore, innovation capability, locational factors such as being located in a regional industry cluster (in or outside STIPs), guanxi and networking opportunities, entrepreneurial skills, including international business experience and access to more financial sources and capital for developing the business, are essential for commercializing technology effectively in China. The role of entrepreneurship is evident. However, it remains still underdeveloped in China's STIPs.