(Yicai) Jan. 16 -- Shanghai should leverage the advantages of leading enterprises to promote the high-quality development of science and technology innovation incubators, according to an outstanding proposal selected by the Shanghai Two Sessions, the annual meeting of the city's top legislative and political advisory bodies.

The success rate of sci-tech incubators established by large enterprises and industry leaders is relatively high, mainly because of their stable management and operations and forward-looking vision, said You Minjian, one of the 15 experts who submitted the above proposal to the Shanghai Two Sessions.

This year's Shanghai Two Sessions focuses on the development of the city into an international sci-tech innovation center, with several proposals putting forward suggestions to accelerate the establishment of enterprise-led sci-tech innovation systems and deepen financial services for technological innovation.

Funding incubators requires large investments and a high degree of innovation, has slow return on results, and carries great risks, so having leading enterprises as their heads is a significant advantage, noted You, who is a member of the Standing Committee of the Shanghai Municipal Committee of the Chinese People's Political Consultative Conference and a lawyer at Co-Effort Law Firm.

State-owned enterprises and government-run incubators should be entrusted to leading companies and industry giants, with the government investing in infrastructure construction based on market demand and enterprises taking charge of professional operation and management, Yu explained.

Yu also suggested that Shanghai should encourage state-owned venture capital firms to collaborate with leading enterprises and industry giants to establish multi-level, multi-model funding systems centered around the sci-tech industrial ecosystem, as well as support incubators' special funding needs.

"For incubators, proof of concept is the most critical and high-risk stage of sci-tech achievement commercialization that often causes hesitation," You said, adding that municipal finances should establish a dedicated fund to support and guide POC projects.  

In 2023, Shanghai released a plan aiming to cultivate by the end of this year no less than 20 high-quality incubators that would serve as models to drive the transformation and upgrading of over 200 incubators towards specialization, branding, and internationalization. As a result, more and more financial institutions are engaging in the in-depth incubation of sci-tech innovation enterprises.

According to the plan, Shanghai would strengthen the guidance on the investment-incubation relation, including encouraging high-quality incubators to collaborate with municipal-level fund of funds, establishing early-stage hard-tech investment funds, and deepening the exploration of concept validation and equity investment.

Many incubators in Shanghai have already developed various fund models, including proprietary incubation funds, joint funds, and early-stage support funds.

Editor: Futura Costaglione