Liu Yingqiu and Wang Hongling: Transformation and Upgrading: A Necessary Choice for Non-governmental Enterprises in the New Development Stage

Abstract: With the development of low-end businesses, an extensive operation model, and lack of cutting-edge competitiveness, Chinese non-governmental enterprises in the “platter economy” have come to a life-and-death crossroad. Confronted with a multitude of challenges, non-governmental enterprises must either transform and upgrade themselves to a higher platform or withdraw from the market. The deeper economic and social reforms are, the fiercer market competition is, and more enterprises need to challenge themselves to be the “fittest who survives.” The constant adjusting of businesses to adapt to the changing environment is what is called “business transformation and upgrading” in economics.

  We have conducted a survey titled “transformation, upgrading and competitiveness,” and field studies of non-governmental enterprises in 19 provinces and cities acrossChina. We used modern economic methods, such as econometrics, to analyze 622 valid questionnaires out of a total 754 pieces we sent out. The results we received are as follows: (1) Non-governmental enterprises mired in difficulty can extricate themselves by no longer adhering to traditional patterns of development but transforming and upgrading themselves through innovation. (2) The primary concern in transformation and upgrading is to win market share. (3) Innovation is the permanent driver of transformation and upgrading. (4) Talented entrepreneurs and professionals are a must. (5) Transformation and upgrading require a constant improvement of the management mechanism. (6) Government guidance and service provide strong support for transformation and upgrading.

  To help non-governmental enterprises make bigger strides in transforming and upgrading themselves, we offer a series of policy suggestions. 

Keywords: Non-governmental enterprises, Transformation and upgrading, Platter economy

Source: China Finance and Economic Review, Volume 2, No.2, 2013