Download Research of Small and Medium-sized Innovation to Promote the

M & D FORUM
Research of Small and Medium-sized Innovation to Promote the
Regional Economic of Liaoning
LU Li, WANG Xian
School of Economics and Management, Dalian Ocean University, China, 116023
[email protected]
：
Abstract Small and medium-sized enterprises which are the backbone of the regional economic
development make outstanding contributions to the regional economic development .However, there are
still some problems in the developing. With the implementation of the strategy of three regions in
Liaoning province, in particular, Liaoning coastal economic zone, have been included in national
development strategies, not only further promote the healthy development of regional economy in
Liaoning province, but also create new opportunities of development for small and medium enterprises.
Small and medium-sized enterprises should take the opportunity of the regional economic development
strategy to seek ways of innovation and development and make efforts to enhance its core
competitiveness and the overall strength of regional economy to achieve small and medium-sized
enterprises and the region economy coordinated, stable and sustainable development.
Keywords: Regional economy, Small and medium-sized enterprises, Innovation, Liaoning
1 Introduction
Because of the reform and opening up, small and medium-sized enterprises have made outstanding
contributions so that the old industrial base of Liaoning radiate a new vitality. In particular, the
implementation of the strategy in this three regions has not only promoted the healthy development of
regional economy, but also create new opportunities for development for small and medium enterprises.
How to explore the strategy of innovation and development of small and medium-sized enterprises with
regional development advantages has important strategic significance for effectively playing a role in
promoting regional economic development for small and medium-sized enterprises and effectively
playing a role of small and medium-sized enterprises and promoting the regional economic
development.
2 Liaoning Development Strategies of the Three Major Regions
Guided by the scientific development concept, Liaoning provincial government innovates ideas for
economic development. After Liaoning provincial government proposed the "five line” the coastal
economic zone development strategy in the beginning of Eleventh Five Year Plan, Shenyang Economic
Zone was identified as the group of central city of Liaoning in 2008. On this basis, they proposed the
"Northwest Liaoning break" strategy that is becoming another highlight of a strategy of regional
development in Liaoning Province. These three regional development strategy covered all
prefecture-level city in Liaoning Province, making a clear division of the coastal and hinterland,
interactive development, which not only opened a new chapter for the full realization of economic
revitalization, but also created new development opportunities for small and medium enterprises in
Liaoning Province.
2.1 Dalian as a leader of the "five line” coastal economic zone development strategy
The "Five Points and One Line" coastal economic zone development strategy, whose leader is Dalian, is
a important part of Bohai Economic Rim. It will integrate coastal Liaoning 250 effective acres of
industrial land, which has played a strong leading role to promote the coastal economic zone of the
province to be co-win and co-live and the overall development, and has provided a broad development
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space for Nation-building new industrial base in Liaoning. Currently, the "Five Points and One Line"
strategy has get spectacular performance. According to statistics, the end of 2008, five key development
areas developed land area of 158.7 square kilometers,570 projects were approved in the zone, with a
total investment of 220720 000 000yuan. Among them, only the amount of contracted foreign
investment in 2008 reached 2.32 billion dollars, the actual utilization of foreign capital reached
850,000,000dollars, which is 109% and 60.4% higher than last year [1]. Coastal economic zone in
Liaoning province was integrated into national strategies in 2008, which will further promote rapid
economic development in Liaoning.
2.2 Shenyang Economic Zone whose center is Shenyang of development strategy
Shenyang Economic Zone whose center is Shenyang covers 8 provincial cities, including Shenyang,
Anshan, Fushun, Benxi, Yingkou, Fuxin, Liaoyang and Tieling. Land area of Shenyang Economic Zone
accounts for more than half of Liaoning Province and nearly two-thirds of the province's GDP, which is
more favorable conditions for intensive areas of industrial cities in China and Northeast Asia region. 8
provincial cities have been by the focus of planning construction and investment, so that
Shenyang-Fushun Industrial Corridor, Shenyang-Benxi Industrial Corridor, Shenyang-Tieling Industrial
Corridor, Shen-Fuxin Industrial Corridor, SLAYIC with five key industries and the construction of 10
major industry clusters are accelerating. In 2009, GDP of shenyang economic zone reached
998470000000 yuan, and that in 2020, Shenyang Economic Region will achieve regional economic
integration and comprehensive economic strength of the moderately developed countries.Shenyang will
become the important economic centre.
2.3 The implementation of breaking through Liaoning Northwest strategies
Northwestern includes Fuxin, Chaoyang, Tieling three cities. Over the years, industrial development of
the area is relatively slow, living standards of urban and rural residents is lower and social security and
employment pressures are great. In 2007, these three cities in Liaoning province's GDP accounted for
only 8.5%. In 2008, Liaoning Province uses the current favorable opportunity of expanding domestic
demand to introduce the implementation of breaking through Liaoning Northwest strategies. This is
another major strategic decision made by the provincial government to address the problem of slow
economic and social development accumulated in northwestern Liaoning over the years from the
concept of scientific development and promoting the coordinated development of regional economy
overall.Since the implementation of the strategy, the Fuxin, Chaoyang, Tieling three cities in the
industrial cluster development, infrastructure construction, ecological construction and many other areas
have achieved a breakthrough. The accounts for 2009 show that Fuxin, Tieling, Chaoyang have
completed 27billion yuans ,65.3 billion yuans, 52billion yuans of total output value and increased
15.2%, 18%, 20%[2] . A number of major economic indicators are over the province's average growth
rate and achieve “leapfrog development”.
3 Problems of SMEs in Regional Economic Development
The formation of Liaoning regional economic blocks brings new opportunities for the development of
small and medium-sized enterprises. However, small and medium-sized enterprises are a vulnerable
group relative to large enterprises in development. There are still some difficulties and problems.
3.1 The lack of high-quality talent, improvement of the competitiveness is affected
In China, more than 70% of Small and medium private enterprises is family business. The general
emphasis on personnel arrangement is blood, genetic, geographical. Corporate ownership and control
can only be passed within the family. Therefore, in selecting, employing, the more emphasis is the
degree of kinship with the family rather than the capacity and performance. They exclude alien
personnel and employ with a conservative narrow [3]. SMEs in salary and benefits, employment system,
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social status and development prospects, there is still a wide gap compared with large enterprises and it
is difficult to attract and retain qualified personnel. According to the National Economic Census data
show that in china, the proportion having college education of employees in state-owned enterprises was
45.8%, while the private sector was only 13.5%. Lack of talent is the biggest obstacle to enhance SME
competitiveness, innovation and development and go to the world stage.
3.2 SMEs are small; their capability of resisting risk is weak
Compared with large companies, SMES also are vulnerable. In the short term, risk-benefit ratio is
significantly lower than large enterprises. Particularly since 2008, under the impact of the world
economic and financial crisis, the situation is changing, external environment of SMEs is deteriorating
and market demand is on the rapid decline, so that SMEs that are weak have fell into the difficult
position of struggling to survive. Many export-oriented SMEs quickly lost orders, or stop, half cut. Part
of the business, because of the capital chain rupture, is forced to close, so that there are employees laid
off and large numbers of migrant workers returning home, all of which are the potential problems of
social instability.
3.3 Lack of Technological innovation ability and development potential
Work in the technological innovation of SMEs has some success, increasing the vitality of the regional
economy. But in the design and development capabilities and the intellectual property rights owned by
SMEs, control and other aspects of the core technology is still relatively weak. During "Eleventh
Five-Year", the rate of the transformation of scientific and technological achievements in Liaoning
Province was only 28%, enterprises and universities, the projects completed by research institutes across
the province accounted for only 9.6%. Educational level of boss of Small and medium private
enterprises is not high, short-sighted, the lack of strategic vision of technological innovation and
innovation power. Special funds supporting small and medium enterprises to invest in technology is less
than normal and these is the lack of qualified technical personnel support and the lack of information
sharing mechanisms, which are a direct result that technological innovation capability of SMEs is weak
and technical competence and the brand is difficult to form a strong competitive advantages and better
economic effects, so that SMEs have the lack of stamina.
3.4 Management Organization model is obsolete, which affects sustainable development
Due to the current implementation of small and medium private enterprises are still traditional, family
management, so that in a enterprise from the boss, management, middle managers, even to some
grass-roots leaders, there is a blood relationship or kinship ; family self-contained system, and most of
the old management concepts, lack of knowledge, more seriously random individuals in the business
management, lack of modern enterprise management concepts and innovative ideas, the family of the
extensive and original of the management command, lead to that some small and medium private
enterprises are difficult to optimize the allocation of resources, access to core competitiveness and
sustainable development of enterprises is affected. In the sample survey, one third of enterprise
managers think that the impact of family management is one of the main crux of the problem of
affecting the sustainable development of SMEs.
3.5 Innovative development is troubled by a shortage of funds and poor financing channels
From the current situation, financial support for SMEs is not in place. Financing, credit guarantees and
other policy-oriented financial system lag, lack of security strength, and lack of small and medium
financial institutions matching with the small and medium enterprises, showed a weakening trend in
lending support, which help to present that the financing channels for small and medium enterprises is
also very simple, most still rely on bank loans, and mortgages from banks and credit access to limited
capacity, so that the development of SMEs is affected. According to a survey, in August 2008, 5
research groups of the Liaoning Provincial Small and Medium Business researched 14 cities of Liaoning
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Province , visited and researched 65 enterprises and interviewed 325 corporate directors, managers. The
result shows that SMEs originally in bottleneck credit facilities, is even worse due to tightening of
monetary policy, bank lending compression [4].
4 Some Suggestions of Innovation and Development of SMEs Based on Regional
Economic Development Strategy
Innovation is a fundamental way to increase the core competitiveness of SMEs and regional
comprehensive economic strength, and achieve regional economic sustainable development. SMEs
should take the regional economic development strategy as an opportunity, take advantage of area along
the coastline, land resources, industry and other advantages and rely on the support of the hinterland to
create new opportunities for growth and innovation development.
4.1 Enhance awareness of innovation of SMEs and potential of the development
Innovation as economic terms, thus the formation of "innovation theory "is first put forward by the
Austrian economist Joseph. Schumpeter's "Theory of Economic Development" is in 1910. Innovation is
the eternal theme of a country and enterprise development, is the source of power of companies. In the
increasingly fierce international competition, the key of development of SME and achieving new
breakthroughs is to having new ideas, raising awareness of innovation, stimulating the strength and
wisdom of innovation, improving the innovative mechanisms, to enable SMEs truly become a source of
innovation to enhance the development potential of independent innovation, promoting industrial
development by leaps and bounds.
4.2 Increase support for innovation and create a favorable environment for innovation
SMEs achieve the healthy and rapid development and contribute to the regional economy which is
inseparable from sector support and care of all levels of government, the functions. Government and
relevant departments, taking the guidance of scientific concept of development, further renew ideas,
targeted to develop a more rational incentives for innovation and development of SMEs, improve the
public service platform and simplify procedures to provide a good mechanism and institutional
environment and market environment of fair competition for innovation and development of SMEs, so
that SMEs consciously plunge into the construction of regional economic management and play an
active role, to achieve coordination with SMEs and the regional economic development.
4.3 Innovative financing channels, to create conditions for enhancing competitiveness
Cracking financing problems and helping SMEs out of the development difficulties is needs of the
current development of SMEs and the regional economic. First, our government should make the use of
financial, tax policies to guide the commercial bank lending to incline to SMEs, delegate credit authority,
streamline loan approval process, and improve financial service quality. Second, our should establish a
group of small and medium banks for small and medium sized financial institutions or non-bank
financial institutions, providing specialized services for small and medium enterprises, to provide more
financing channels and opportunities for SMEs. Third, we should foster the concept of entrepreneurial
credit consciousness and their conception to build stronger regional SMEs credit guarantee mechanism.
Fourth, for the SMEs, whose product sales have good market prospects, whose ability of technical
innovation is strong, whose benefit is good, who require a strong expansion, and Government should
actively explore the direct financing channels, whose characteristics suit small and medium enterprises,
to provide funding for innovative development [5] and to better create the conditions for regional
economic development.
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4.4 Improve capability of the technical innovation; enhance the strength of the regional
development
Technological innovation is source of enterprises’ life, is the fundamental way to sustainable
development of enterprises. Small and medium enterprises in the fierce competition in the market grow,
which must rely on continuous development of high technology, improving the capability of
independent innovation in a prominent position to maintain its unique competitive edge. First,
government should provide some preferential terms for innovation of SMEs, give certain incentives to
major technological innovation having a direct impact on the regional economy and encourage SMEs to
operate in "specialized, sophisticated, special, new" direction. Second, we should accelerate regional
"research" platform, increase link business, government and research institutes and improve the
technical innovation and product technology content. Third, the preferential policies and incentives
should be established, we should introduce and develop high-quality personnel whom the regional
economic development needs, to create development model that competitive industries accumulate
talents, key projects attract talent development and improve technological innovation capability, thus
enhancing the regional economic and scientific strength.
4.5 Increase innovation of the organization and management, and maintain long-term vitality
Innovation of Organizational Management is the basis of the development of enterprises, and is the only
way to enhance the core competitiveness of the city area and overall strength. In particular, because of a
serious impact of the international financial crisis, small and medium private enterprises are faced with
increasing uncertainties and the traditional family management model has been unable to adapt to the
innovative development and higher requirements. We should actively guide and encourage innovation
of management of small and medium organizations, and establish modern enterprise management mode.
We should manage and organize business with modern enterprise management concepts, to make
enterprise management thinking, management system, management methods and management tools
scientific and modern, and enable enterprises in the current financial crisis enhance self-development
capacity, expand market share, meet demand, improve efficiency, promote industrial upgrading, and
lead small and medium private enterprises out of difficulties.
5 Conclusion
Implementation of regional economic development strategy in Liaoning has made a good start. The
regional SMEs should seize the favorable opportunity of economic development strategies, take
advantage of region along the coastline, land resources, industry and other advantages, and rely on the
support of the hinterland. In the same time, innovation and development should be placed in prominence
of regional economic development, and we make efforts to improve the environment for SME
development. This will create the good atmosphere which encourage and support innovation of
enterprises and achieve stability, health and sustainable development of small and medium enterprises
and regional economic.
References
[1]. Li Chunlin, Huang Baofeng. Liaoning Northwest becomes remarkable [N]. Liaoning Daily
2009.2.9
[2]. Liu Ziliang. Thinking on the financing of private enterprises [J]. economic and technological
co-operation, 2005 (2) :42 44(in Chinese)
[3]. Chun-Hong Zhang. Liaoning Province introduced the New Deal to support the development of
SMEs [N]. Liaoning Daily .2008.10.15(in Chinese)
[4]. He Julian. System Innovation of Private Enterprises in China [J] Reform and Development of 2007
(1) :32 34(in Chinese)
[5]. Yechen Yi, XIA, Zhou Xingrong. On the plight of private enterprise and the governance of credit
[J] Modern Finance. 2008 (12) :33 37(in Chinese)
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