The difficulties of institutional innovation of state-owned enterprises (SOEs) in old industrialbases lie in the fact that there are a great number of enterprises that need to be reformed, andit would be an extremely difficult task. It is, therefore, essential to accelerate the creation ofa social security system, introduce strategic investors to diversify their property rights andrenew their ideas, while changing the governments functions to create a good environmentfor institutional innovation and reform, and for the smooth structural reform of SOEs. The difficulties of institutional innovation of state-owned enterprises (SOEs) in old industrialbases lie in the fact that there are a great number of enterprises that need to be reformed, andit would be an extremely difficult task. It is, therefore, essential to accelerate the creation ofa social security system, attracting strategic investors to diversify their property rights andrenew their ideas, while changing thegovernmental functions to create a good environment for institutional innovation and reform, and for the smooth structural reform of SOEs.