1. Cultivating Innovative SMEs into Business Giant: the SME Supporting Program in Shanghai Shanghai Torch Hi-tech Industry Development Center July 2008

2. Part One brief introduction of the Program  Support innovative enterprises in good condition and speed up their development  Focus on the enterprise ’ s technological renovation and cultivate these enterprise  Municipal and district government give them preferential policies in terms of capital, project, social resources and personnel.

3. Characteristic of Business giant among innovative SMEs  Innovative  relative large in scale  demonstrative

4. Who to support  Municipal government  district government --- receive the application --- jointly judge --- jointly present the award of “ business giant among innovative SMEs ”

5. Where is Fund  Municipal government and district government --- in accordance with the 1:1 ratio of support --- District: from a special fund set up

6. Who to be supported  Business giant among innovative SMEs  Candidates for Business giant among innovative SMEs ---with good potentials ---will reach the Selection Criteria after 2-3 years’ supporting program.

7. Selection Criteria ◆ the number of researchers : no less than 20% of total employees ◆ owning independent IPR, software copyrights, 2 plus integrated circuit layout designs or proprietary technology, 1 plus products up to an international leading position

8. Selection Criteria ◆ annual fund investing in scientific research: no less than 5% of the annual sales incomes ◆ mechanism in the field of intellectual property rights protection, personnel training and innovative motivation and a standardizing management system

9. Selection Criteria ◆ the rate of assets and liabilities: no less than 60% ◆ with sound credit rating and financing capacity ◆ sales incomes of previous year:100 millions-1 billions RMB ◆ the average growth rate of sales incomes or net profits (in the past three years): more than 20% ◆ leading products ’ sales incomes or profits: 60% of the total sales incomes

10. Selection Criteria ◆ good leader and management team ◆ operating mechanism to resist various kinds of risks ◆ sound rules and regulations

11. Characteristic of the Program  focus on their whole development  Offer them relevant services in different phases of development aiming to lower the innovative costs and risks

12. Characteristic of the Program  offer them tailor-made services in terms of finance, information, personnel, market, management, office facilities, policies, technologies and training

13. Characteristic of the Program  Based on Science & Technology Commission of district government, more and more enterprises can enjoy the preferential policies and services.

14. Characteristic of the Program  what is fund for ---offer innovative activities subsidies (Activities including technology research, patent secondary development, IPR Protection, transfer of technology achievements, lab, the construction of technology center, personnel training, market exploration and technology advisory)

15. Goal of the Program  Within 3-5 years of supporting, they will be ---with more independent intellectual property rights ---with large market scales and good brand ---with strong capability of independent innovation ---with a solid foundation of sustainable development

16. Part two Status(2006-2007)  40 business giants among innovative SMEs ; 148 candidates for business giants among innovative SMEs  456 millions of funds  Form a service chain of promoting SMEs’ innovation and development  Lower their cost and risks  Promote the cooperation between municipal government and district government  Promote the local economy

17. Role of the Program  Accelerate the transfer of technology achievement  Speed up technological renovation  Promote the construction of innovation environment  Change the work style of governmental department in charge of science & technology

18. Role of the Program ---survey of 20 business giants of innovative SMEs ---compared figures in 2007 to that in 2006 Total assets increase by 34% Sales incomes increase by 25% Net profit increase by 20% Tax incomes increase by 30% Exports increase by 22%

19. Role of the Program  20 enterprises obtain 728 newly-rewarded IPRs (among them, 67 patents for invention)  16 enterprises obtain 67 items of national standard or industrial standard.  17 enterprises establish 108 independent brands or registered brands.  14 enterprises have been committed to national or local technology projects.

20. Role of the Program  More confidence in enterprises’ fast development  A leading role in independent innovation  Products are popular and sales volumes of independently-innovative products cover 70% of sales volumes  5% of the enterprises listed in SME stock market and 15% in the preparation of listing in the market

21. Role of the Program District governments:  give priority over the program  Set up a special fund  Propose other policies supporting SMEs ’ innovation

22. Part Three Future Plan By the end of 2010 ---100 business giants among innovative SMEs --- 100 billions of sales incomes (candidates for business giants among innovative SMEs )

23. support these companies in all-round efforts  government purchase these enterprises’ products  Integrate social resources to serve the enterprises better  Get financial support directly  Industry Alliance between big enterprises and SMEs

24. Thank you