The recent Central Economic Work Conference in China has laid out a clear commitment to attract greater social capital towards venture investments, emphasizing the importance of nurturing innovative enterprises in a structured manner. But what exactly defines an innovative enterprise, and why is there a need for a tiered nurturing approach?

In essence, an innovative enterprise is typically characterized by having independent intellectual property rights and achieving competitive advantages through technological innovation. Over the past few years, the push for a new quality of productivity and high-quality development in China has led to a significant emergence of innovative enterprises. These entities, with their robust innovation capacities and market influence, are pivotal players in industrial upgrades, technological evolution, and the conversion of scientific achievements into practical applications. As they evolve, they form a gradient elevation pattern across several levels. The first level consists of innovative small and medium-sized enterprises (SMEs) that show considerable innovation capabilities and developmental potential. The second tier includes specialized small firms that demonstrate distinct characteristics such as refinement and novelty. The third tier is made up of specialized "little giant" enterprises, which are leaders in their fields, armed with key technologies and high market shares, projected to be both high in innovation drive and growth potential. Lastly, the fourth tier comprises single-product champions in manufacturing, representing the pinnacle of development and market strength within their specific manufacturing niches. These enterprises underpin the innovation landscape of the manufacturing sector, which relies heavily on their competencies.

When it comes to nurturing these enterprises, a structured step-by-step development path is key. This gradational cultivation approach allows for differentiated support based on the respective stages of a company’s growth, enabling them to access the right resources tailored to their needs. Innovative enterprises, in particular, require such differentiated nurturing. Why is this important?

Firstly, classifying innovative enterprises and implementing targeted policies enables precise resource allocation. The “infant industry protection” theory postulated by Friedrich List suggests that nascent firms need supportive policies and transitional protections as they strive for higher levels of growth. Each of the four identified stages of innovative enterprise development should target distinct goals. For example, for innovative SMEs, the aim should be to enhance their technological integration and application capabilities. Specialized SMEs could focus on breaking through their key technologies, while "little giants" should cultivate skills in digital innovations, guiding them upwards. Meanwhile, those manufacturing single-product champions should strive to improve their international competitiveness to maintain their leadership positions within their sectors. By establishing clear developmental trajectories and providing precise support such as talent acquisition, financial resources, technological advancements, and regulatory policies according to the identified weaknesses at each stage, innovative enterprises can elevate their overall strengths effectively.

Secondly, this tiered cultivation approach differentiates the various types of innovative enterprises, identifying and managing risks that arise during their growth phases. This paves the way for timely evaluations and specialized adjustments, allowing companies to align their directions with market demands more adeptly. Lastly, a systematic approach to tiered nurturing can better align with national strategic imperatives and optimize resource distribution. It allows relevant authorities to prioritize support for companies that exhibit innovation capacity and high growth potential, tailoring policies and financial assistance according to the distinctive needs at various developmental stages. This drives the effective use of resources, stimulating innovative vitality and assisting companies in breaking through developmental bottlenecks, which in turn enhances the resilience and competitiveness of industry value chains.

So, how can the tiered nurturing of innovative enterprises actually take shape? National policies, management theories, and successful local practices offer valuable insights. A fundamental cornerstone of this approach is enabling innovative companies across varying levels to accurately identify their pathways, understand their gaps, and bolster their overall competence and core competitiveness. Establishing a gradient nurturing system — consisting of innovative SMEs, specialized small firms, "little giants," and manufacturing champions — is essential.

It is also crucial to recognize the relative scarcity of resources at different stages of enterprise development, necessitating a respect for the intrinsic laws of business growth. This acknowledgment demands providing companies ample time and space to evolve, particularly in honing their specialization and uniqueness.

The initial step involves effective “top-level design.” A case in point is Zhejiang Province, which has implemented a tiered cultivation reform for enterprises, creating a structured system for nurturing innovative businesses. This initiative facilitates systematic diagnostics for innovative firms by offering “exclusive service packages” alongside a dedicated service personnel framework aimed at fostering continuous growth among these enterprises. This model exemplifies best practices that can be learned from and replicated. From a strategic perspective, impactful top-level design prioritizes strong policy support, legislative frameworks regarding the tiered cultivation of innovative businesses, tax reductions, subsidized loans, and the establishment of dedicated funds that provide necessary financial backing for enterprises striving to advance and overcome initial hurdles.

Next comes the need for “categorical policy implementation.” A pertinent example can be seen in Zhengzhou City, Henan Province, which has launched a three-year action plan to exponentially increase the number of specialized small enterprises. Their approach delivers targeted support services based on an enterprise's distinct innovation capabilities and developmental characteristics. For nascent innovative SMEs, the focus is on enhancing their technological application capabilities and improving systematic management processes, ultimately aiding them in overcoming startup challenges. For SMEs already demonstrating substantial innovation, the emphasis should shift towards international standard-setting abilities and refining unique production technics. Moreover, for those established specialized "little giants," fostering international competitiveness and digital capacity will be critical, whereas guiding manufacturing champions should revolve around maintaining their leadership and maximum market influence.

Lastly, effective “follow-up services” are pivotal. Achieving the next level in growth should not be perceived as an endpoint but rather as a launching point for enhanced innovative services. For instance, in Guangdong Province, comprehensive tracking services assess innovative enterprises periodically and benchmark their progress to continuously uplift their innovation capabilities and specialization. The provision of personalized services based on the developmental stages of innovative enterprises must be dynamic, adjusting nurturing programs in response to evaluation outcomes to accurately address the evolving risks that enterprises face. Establishing a systemic platform for innovation services that offers consulting, registration, talent assistance, and guidance on public offerings can significantly bolster the confidence of enterprises in their growth trajectory.