New policy hardwires scientists for commercial success

"The policies free scientists from their posts while exempting them from the worry of losing their previous jobs. This gives them an opportunity," he said. "They no longer need to put all their eggs in one basket."

Chu is also positive about commercial success becoming a criteria for academic assessment.

"In high schools and academies, scientists are mostly evaluated on exam results and dissertations," he said. "With most of them doing work that is not at all productive, maybe only five out of 100 scientists are coming up with anything entirely original. Only by liberating the other 95 from the academic treadmill can we see the progress we want in society."

The Shanghai Institute of Materia Medica started considering commercial success during performance evaluation last year.

Ye Yang, deputy director of the institute, told Xinhua that its goal was 200 million yuan ($30.64 million) in profit. But to his surprise, the institute converted 15 academic achievements into products with a total contract value of 800 million yuan.

employee and shareholder

The distribution of profits in such a situation is also an issue.

As well as its 50-percent stipulation, the State Council also said that academics should be given shares in the companies to which their work is licensed.

A railway engineering company in Beijing's Zhongguancun, often referred to as "China's Silicon Valley," preempted the official policy.

In 2014, Jiuzhouyigui Shock and Vibration Isolation Co had registered assets nearing 230 million yuan. It gave 30 percent of its shares to eight technicians.

"But they couldn't afford the personal income tax," said Shao Jinwen, chief executive of the company.

Under a pilot project in Zhongguancun, however, they were allowed to pay the tax in installments within five years. "This encouraged the technicians to make more breakthroughs in the future," Shao said.

While last week's announcement has been well received, the Zhongguancun case indicates that the State Council may need to make its guidelines more detailed.

"The policies are good, but we should make sure that they really take effect, so entrepreneurs can really benefit," said Chen Runhai, vice general manager of broadcast equipment producer Osee Technology.