Previous versions of this essay have been published in: Chinese Soft Science, issue no. 4, 1998; Internet I3 UPDATE, 1997.10; Internet World, issue no. 2, 1999; Journal of Knowledge Management, vol. 3, no. 1, 1999; the Global Technological Change-From Hard Technology to Soft Technology, INTELLECT LTD,　2005.1, London

The world has entered the Knowledge Age. Traditional organizational systems are experiencing difficulties maintaining competitiveness in this unpredictable world. ‘Organization’ itself has become the most important factor of competition. Organizational revolution is the first item on the agenda.

In this paper I have thoroughly analysed the disadvantages of traditional Chinese research organizations, indicating that organizational innovation is a precondition for all kinds of creation and innovation. In this Appendix I will describe a new mode of research organization — the virtual institute — along with its background and significance. I will also discuss organizational change in China after its reform and opening up and provide examples of virtual institutes in both America and in China. Through summarizing China’s experiences in implementing virtual institutes I will make a case for the idea that moving in the direction of the virtual institute is the way of the future and that the growth of virtual institutes may even be inevitable. Finally, I will discuss the outlook of virtual institutes and the challenges they will inevitably face.

1) The New Organization Mode Embodies the Features of the New Era
2) The Defects of Traditional Organizations of Science and Technology in China
3) Virtual Institutes: A New Mode of Research Organizations
(1) Virtual Organizations
(2) Background and Significance of the Virtual Research Institute
4) The Development of Virtual Research Institutes in China
5) Discussion
(1) Long-term Influences
(2) Fierce Challenges