Premier Li Keqiang urged companies to encourage innovation by giving their research and development staffs corporate shares.
The premier said during a visit to Liaoning province on March 26 that high-tech research personnel deserve better material rewards, as the country is eager to unleash its innovation potential.
Enterprises are obliged to transform intellectual property in the mind of researchers into tangible assets, he said.
"Talent remains the key factor during business expansion, but their innovation capability can be motivated and their vision of life realized only after enterprises have reformed their incentive system," Li said.
The premier made the remarks during a visit to Shenyang Yuanda Science and Technology Park in Liaoning's capital, Shenyang. The park, founded last year, focuses on transforming research achievements into products. Technical and research staff can benefit from their new products not only in terms of reputation but also in income.
Li Zhencai, executive vice-president of the park, said the park has attracted more than 700 researchers in a variety of fields since its establishment last year.
Li Zhencai said an R&D team can sell a new technology or product it develops to other subsidiaries of Yuanda Group or other enterprises, and the R&D staff will be able to get 50 percent of the sales revenue.
Last year the park won 41 new technology transfer contracts valued at about 50 million yuan ($8.1 million).
Li Xionghao is one of the beneficiaries. Li, 47, director of the park's environmental science research institute, signed four technology transfer contracts worth 13.25 million yuan in October. Due to the attractive operating mechanism, he quit his job in Hubei province to move to Shenyang.
"I'm really happy that the results of our research can be real products. I think that's the dream of all R&D personnel," Li Xionghao said.
Huang Zheng, director of the electronic research institute in the innovation park, used to be an employee of Shenyang Brilliant Elevator Co., an elevator manufacturer founded in 2001. Huang joined the current research team last year when the innovation park was set up to boost enthusiasm for research and development.
Huang developed real-time networking that can monitor the operation of elevators and send simultaneous warnings to local operators. Under the reward mechanism, Huang and his team have made 3 million yuan so far from the system.
Shao Jianbing, a professor of economics at Liaoning University, said this is a new business model for the commercialization of research achievements in China. Shao said it can inspire researchers to develop new technologies and products that meet market demand because their incomes will be related to product sales.
Li Zhencai said: "For now, the park only serves Yuanda Group. But in the future, we are planning to set it up as an open R&D platform and business incubator for the whole province or even the whole country."