China's \"patient capital\" is driving significant paradigm shifts across micro, meso, and macro levels in technological innovation, showcasing its pivotal role in global progress.
Micro Level: Redefining Innovation Strategies
At the micro level, patient capital is transforming how tech companies make innovation-related decisions. Traditionally, equity investments pressured startups to achieve an initial public offering (IPO) within three to five years, pushing founders and management to prioritize short-term financial metrics. This urgency often conflicts with the nature of breakthrough innovation, which involves high risks, extended cycles, and inherent uncertainties.
China's patient capital, however, allows companies to extend profitability assessments and withdraw from long-cycle evaluations. For instance, a biopharmaceutical fund has extended its profitability timeline to eight years, while a Beijing AI fund has declared that \"there is no exit deadline.\" These measures enable companies to focus on long-term innovation without the immediate pressure of financial returns.
The impact of these strategies is evident. According to the latest data from the Shanghai Stock Exchange Science and Technology Innovation Board, the proportion of R&D investment among its companies has surged from the industry average of 15 percent to an impressive 35 percent.
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China's 'patient capital' and its paradigm shifts across three levels
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