Jianghong Cao, M. John Foster and Lorraine Watkins-Mathys

Drawing on the empirical work of a broader study, this paper examines whether technology is being successfully transferred from universities to the IT-software SMEs present in China, and the effectiveness of entrepreneurship in effecting such transfers. A conceptual framework was generated to guide the investigation. Data were elicited using a detailed questionnaire which generated 53 usable responses; follow-up interviews with 17 of the 53 respondents; and four interviews with relevant government officials (civil servants from the Ministry of Science and Technology and state-owned banks). There were three main findings. Chinese software SMEs tend to be reluctant to adopt new technologies from local universities; there is a lack of common purpose between the parties; and entrepreneurs who did undertake such technology transfer felt the process was badly impeded by the lack of available finance, and expressed fears about poor protection of intellectual property rights in China. The majority of the sample firms acted opportunistically, taking advantage of the benefits offered under government schemes to earn rapid returns mainly using extant technologies. These conclusions suggest that the Chinese government’s policies in this area of technology transfer have had only limited success.