Venture Capital And New-high-tech Industrialization In Yangtze River Delta

Yangtze River Delta economic zone, located in the cross of the 'T-shaped' industry-distributing region between eastern-coast and industry-intensive ribbon along the Yangtze River, is the most advanced region in economy, science and culture nationwide and the most promising one to realize modernization in eastern China. Presently, most of the cities in Yangtze River Delta are in the middle or late period of industrialization and their industrial structure is evolving into the new-high-tech industrialization.As the 'engine and accelerator' of new-high-tech industrialization, venture capital plays an irreplaceable role. In today's world, venture capital is a creator of fortune legend, with its unique institution, productive factor and conversion functions to promote venturing into culture, to enforce industry near laboratory and to catalyze originality into wealth. The excellent economic performance of venture capital is demonstrated by practices in developed countries. Along with the rapid growth of globalization and information technology, Yangtze River Delta has to depend on venture capital to establish its own innovation mechanism for new-high-tech industrialization: through innovations in both science-technology and institution, the region could accelerate the industrialization of technology, achieve increase in both quality and quantity of social productivity and take the preemptive opportunities, so as to ameliorate national economic spatial layout by its strong and powerful economic development.Taking the viewpoint from regional economics and industry economics, and adopting the basic principles of venture capital, this dissertation studies fully the conditions and mechanism of how venture capital could promote new-high-tech industrialization in Yangtze River Delta. On the basis of a comprehensive analysis of regional components and economic factors, the dissertation also studies empirically conforming tendency in industry and spatial layout of new-high-tech industry, anddiscusses development pattern of new-high-tech industrialization in the region. Secondly, the dissertation explains realization of new-high-tech industrialization irom the points of venture capital function, location selection, factor efficiency and investment performance. At the same time, a seminar on development of small and medium-sized enterprises (SMEs) and technological innovation in conventional industry in that region is also given. Lastly, a perspective for the construction of venture capital system in Yangtze River Delta is formulated.This dissertation holds that new-high-tech industrialization and new-high-tech transformation of conventional industry are not incomparable, and furthermore, Yangtze River Delta has to depend on venture capital to accelerate formation of new industry and upgrading of conventional industry. Therefore, due to regional cumulation effect, south of Jiangsu in the north wing of Yangtze River Delta should depend on venture capital for intemalization of new and high technologies to boost its own technological-innovation industry, while northeast of Zhejiang in the south wing of Yangtze River Delta should depend more on civilian capital or upgrading of its industries, to recast and update conventional industry with proper advanced technologies; the central city, Shanghai, should fully exert advantages in financial services and R&D to coordinate new-high-tech industrialization among the whole region.Venture capital, a new means of investment, is highly depended on spatial location, thus allowing for little, if any , ubiquity. In developing venture capital, Yangtze River Delta should pay more attention to the spatial characteristics caused by location cost of grade coordination and grade coherence. Meanwhile, because civilian financing from SMEs is an importance force in regional capital formation, the finance authority can expedite localization of venture capital by adopting a 'guiding rather than blocking' policy. In addition, there is 'soft-restraint' in internal R&D budget in large enterprises. Through introduction of market mechanism, a combination of broad sense venture capital pattern from resources of state-owned, civilian and corporate venturing will become replacement and supplement for promotion of R&D performance.In conclusion, the dissertation holds that the construction of venture capital system in Yangtze River Delta should based on regional institutional innovation, a cautious use of linear developing pattern dominated by government, and emphasis on allocation of resource by market means. Its keynote is to advance conformity inYangtze River Delta, to advocate finance innovation, to construct multi-level venture capital system by state-owned, civilian and foreign capitals through enterprise-domination and market-orientation, and finally, to facilitate speedy formation of new industries and high-tech upgrading of conventional industries.