Boxed Pigs and the External Incentives of Promoting Technological Innovation of Little and Medium-sized Enterprises

This article demonstrates the dilemma of the classic Boxed Pigs model, that is, ¿Strong is always Strong, Weak is weaker¿. Under these conditions, little and medium-sized enterprises (SMEs) will not be able to form their own core competitiveness. Thus, this paper put forward an amended Boxed Pigs model, which is, through the external incentives and the improvement of the game rules, to ultimately change the balanced strategy of all parties. As a result of the strong positive externalities of technological innovation, the Government, as a breeder of making rules, has the responsibility to support and encourage SMEs to carry out technological innovation. And the government-led policy venture capital fund plays an important role in the process of promoting SMEs´ technological innovation.