On 28 April 2022, the Faculty of Finance of the City University of Macau held the Finance Seminar Series [22], at the Ho Yin Convention Centre. Professor Rongwei Ren, Distinguished Professor of City University of Macau, was invited to deliver an online speech titled “Integrating Innovation and Entrepreneurship Ecosystem for Large and Small Enterprises: Research on the Action Mechanism of CVC”. Guests attending this seminar include Dean Adrian Cheung and Associate Dean Eva Khong of the Faculty of Finance, City University of Macau.
Professor Rongwei Ren has acquired PhD in Business Management at Nanjing University. He is a visiting scholar in the department of international development at Oxford University. He is currently a professor of strategy and entrepreneurship at the School of Business of Sun Yat-sen University, and holds a concurrent post as standing deputy director of the Entrepreneur Centre. He has won the Baosteel Excellent Teacher Outstanding Award and the honorary title of “South Guangdong Outstanding Teacher”.
Professor Ren has long been engaged in monographic research on national innovation and entrepreneurship strategy theory and policy, venture capital management and the growth of start-ups. Research results have been adopted by the China Association for Science and Technology, the Communist Youth League Central Committee, and the Guangdong Provincial Party Committee and Provincial Government. He has published more than 50 academic papers on innovation and entrepreneurship in important domestic and foreign journals such as AMP and Management World, and authored many monographs, translations and textbooks. He has presided over and participated in national, provincial and ministerial research projects such as the National Natural Science Foundation of China, the National Social Science Fund of China, and the Humanities and Social Science General Program of the Ministry of Education.
Professor Ren pointed out that underlying the success of the “Silicon Valley Type” of the American entrepreneurial economy is the “Venture Capital” (VC) mechanism. The rise of the “Silicon Valley Type” is the most important symbol of the new economic era, and the rapid rise of new enterprises is the key role of VCs. The VC mechanism directly triggers the birth of modern new enterprises and industries and forms an innovation and entrepreneurship ecology, such as semiconductors, the internet, and sharing economy. In combination with the research results of the National Natural Science Foundation, Professor Rongwei Ren indicated that the Corporate Venture Capital (CVC) mechanism derived from VC, as an important feature of the "new economy", has triggered the current organic integration effect of large and small enterprises and effectively improved the technical level and core competitiveness among enterprises. Research showed that the extensive application of CVC mechanism ultimately promoted the rapid growth of start-ups and the formation of new industrial ecosystems.
CVCs are minority equity investments made by large industrial companies in independently operating start-ups, which include four elements: large industrial companies, CVC units, start-up enterprises and project units. The important characteristics of CVC include that the strategic goal of establishing CVC is the main motivation, the entrepreneurial team relies on the resources of large industrial companies, and early small equity investment. CVC originated in the United States in the1960s, and its development is closely related to new economic growth, innovation activities and new industrial policies.
Professor Ren cited the theory of core competitiveness mentioned by well-known scholars and pointed out that CVC mechanism promotes the formation of the innovation and entrepreneurship ecosystem of large and small enterprises: the corporate goals in the innovation and entrepreneurship ecosystem must include industrial transformation and place the competition stage to the future. Regarding the composition of core competencies, Professor Ren analyzed the main components of its various dynamic capabilities: vision-based insight and foresight capabilities, the ability to integrate heterogeneous resources, innovation-based learning and absorption capabilities and front-line execution and management capabilities.
In his book “Intrapreneurship Strategy”, Professor Ren showed that 65% of the world’s top 100 large enterprises have adopted intrapreneurship and CVC mechanisms in product innovation. CVC’s intrapreneurship is an effective way for large enterprises to cultivate the entrepreneurial spirit and further innovate. Professor Ren then added a few famous CVC typical cases. At present, Asia has surpassed North America as the most active CVC market. China’s CVC investment has developed rapidly after the “Entrepreneurship and Innovation among All the People” in 2015. Professor Ren looked forward to the advent of the digital age, and with the deployment trend of Guangdong, Hong Kong and Macau Greater Bay Area, where students could devote themselves to the forefront of research in the future.
The “SELM Entrepreneurship Education Model” explored by Professor Ren in the past 20 years has cultivated many outstanding students’ independent entrepreneurial enterprises and innovative entrepreneurial teams, which have twice won the national teaching achievements second prize. His main research fields include national innovation-driven strategy, strategy and innovation and entrepreneurship management, international innovation and entrepreneurship education, and venture capital. In this seminar, Prof Ren prepared a wealth of content to share with the students, which not only strengthened the students’ understanding of innovation and entrepreneurship, but also enriched and improved their strategic and academic thinking on the development of science, technology and finance, and guided them to think about the frontier “real problems” closely related to the Greater Bay Area. Lastly, Professor Ren encouraged the students to take up theoretical weapons and bravely face and solve many “real problems” in reality.