How Equity Investment Becomes the "Catalyst" for Technological Innovation and Industrial Upgrading

(Author: Zhu Bo, Associate Professor at Shanghai University School of Economics)

In 2026, the Two Sessions will be held again, and the “Government Work Report” will emphasize accelerating high-level technological self-reliance and self-improvement, promoting the integrated development of science and industry. Achieving this strategic goal relies on strong support from the financial system. We must accelerate innovation in science and technology financial systems, strengthen financial services throughout the entire lifecycle of tech innovation enterprises, and shift the role of science and technology finance from traditional fund providers to “stimulators” or “catalysts” for technological innovation and industrial upgrading.

In the science and technology financial system, science and technology credit, science and technology insurance, equity investment, and capital markets need to work together to form a synergy that provides precise support and long-term companionship for high-quality tech companies. Through the coupling effects of various financial tools, we can effectively promote the integration of technological innovation and industrial development.

Among them, equity investment funds possess professional project identification capabilities and post-investment empowerment advantages, making them a key entry point for promoting the integration of science and industry. Focus should be on the two critical stages of tech companies: startup and maturity. Through venture capital funds and M&A funds, resources can be innovatively allocated to promote deep integration of technology and industry.

During the startup phase, vigorously develop venture capital funds. By providing post-investment empowerment and long-term support for quality projects, accelerate the transformation and application of technological achievements, effectively increase the stock and incremental growth of small and micro tech innovation enterprises, and directly promote early-stage integration of technology and industry. Further improving the exit mechanisms for venture capital funds and ensuring a healthy cycle of fundraising, investment, management, and exit is key to unleashing their full potential.

In the maturity phase, improve the operation mechanisms of M&A funds. Through market-oriented M&A approaches, optimize the overall layout of the industrial chain and the allocation of scientific research resources, strongly promoting deeper integration of science and industry at higher levels and broader scopes. For acquirers, this allows direct access to cutting-edge technologies or mature R&D systems, accelerating their technological innovation and industrial upgrading. For the acquired companies, introducing strategic investors and obtaining key resources help them integrate into more complete industrial chains or ecosystems, thereby stimulating new development vitality.

In summary, using equity investment funds as an important lever to build a science and technology financial system that covers the entire enterprise lifecycle and involves coordinated efforts of various financial tools is a crucial engine for stimulating endogenous innovation, and accelerating the formation of a high-level cycle ecosystem of science, industry, and finance.

First Financial’s Yicai account exclusively publishes this article, which reflects only the author’s views.

(From Yicai)