Abstract: Industry institute is a new institution of higher education co-built by application-oriented colleges and universities and enterprises. The industry institute has its distinct organizational characteristics, run by the director of the school board and director of the college. The school and enterprise work together with focuses on practical training and coordination. Such operations have advantages and potentials. But the industry institute also faces problems. Without established legal status, it lacks legal support for further development. And as a modern governance model is yet to be built,university administration often interferes the operation of industry institutes. Besides, the lack of a market mechanism leads to high costs in the operation. We suggest that the independent legal status of the industry institute be established, the policy environment for the development of the industry institute be created,and modern governance model and market mechanism be established so that industry institutes play the role to the full.

Key words: industry institute, application-oriented colleges and universities, university-enterprise cooperation, governance structure, practical training