Abstract:Enterprises are the principal players of scientific research and technology innovation. Increasing the participation of enterprises in basic research is of great significance for China to realize high-level self-reliance and strength in science and technology and to improve the efficiency of national innovation system. However, there is still an obvious gap between the basic research capabilities of Chinese enterprises and those of the United States, Japan, or other developed countries. In this study, we firstly reviewed the characteristics and problems of Chinese enterprises' basic research, finding that expenditure on basic research in enterprises accounts for a relatively low proportion of that in the whole society. At the same time, even though the output of basic research produced by enterprises has increased, its contribution to knowledge creation still needs to be improved. Then, using an “incentive-ability” analysis framework, we revealed the constraints hindering Chinese enterprises to conduct basic research. It shows that incentive for firms to invest in basic research is insufficient. From the perspective of ability, the problem of talent restriction is prominent, industry-university-research cooperation in basic research is limited, and it is difficult for enterprises to use scientific research infrastructure. In the last part of this paper, we present the corresponding countermeasures and suggestions put forward in this study to improve the policy system to support the basic research in enterprises. These measures include: develop differentiated basic research guidance strategies for different industries; support enterprises in setting up laboratories and cultivating talents together with universities and institutions; improve the selection, organization, evaluation and decision-making mechanisms for major scientific and technological projects undertaken by enterprises; expand sharing of science and technology infrastructure and achievements; reform the government outsourcing system to encourage original investment by enterprises; and improve the intellectual property protection system.