Study on the Function of Government in the Innovation and Development Process for SMEs in China

The government plays an important role in the innovation and development process of SMEs in china. Intuitively, government agencies have an important impact on innovation of small and medium-sized enterprises (SMEs), which through direct subsidies, tax incentives, financial support, business incubator, government procurement and the diffusion of innovation policy, and by a duty power and individual power. Further analysis showed that, the impact of government on SMEs innovation performance need to be mediated by three factors: SMEs Innovation resources input, the strength of relationship between SMEs and government, SMEs organization incentive.