I report in today from Shanghai where preparations are underway for a major global summit on entrepreneurship at the end of March. The recent events in Egypt have put a spotlight on the role of a younger, well-educated generation of entrepreneurs peacefully channeling expressions of economic freedom. China has been miles ahead in reconciling a strong government with messy entrepreneurialism and offers some useful lessons for Arab nations as they grapple with enabling, rather than blocking, their citizens under the age of 25.
It is well-known China has seen dramatic increases in growth over the past decade and has enormous potential, plus the human resources, to realize even more growth in the future. The motivation and freedom to start new companies is evident here with plenty of examples of founders who have taken the leap. Baidu’s Robin Li and many more following Li and other rockstar entrepreneurs offer excellent role models. Tomorrow I will join, among others, Niu Wenwen, founder & president of The Founder Magazine—which has become a leader in shining the light on startup entrepreneurs in China—in announcing that China will host the Global Entrepreneurship Congress in Shanghai next month, gathering hundreds of such Chinese entrepreneurs in one room.
Yet challenges, as with all large economies, abound and enthusiasm could wane if, for example, the Chinese government does not help ensure a fair entrepreneurial environment, as one of the readers of this blog pointed out when I last posted on China. For example, deeply-embedded Informal institutions like guanxi need to be balanced with formal institutions that create more trust among many more risk-taking entrepreneurs. Fortunately, most Chinese leaders are well aware of the power of entrepreneurship and understand the requirements to build a supportive environment for entrepreneurial risk-taking. Many, like scientist and Vice Chairwoman of the Standing Committee of the 11th National People's Congress, Yan Junqi, are actively working to put in place the right incentives to foster a new generation of companies not subsidized at the outset by public funding.
Chinese are confident that they will out-innovate their competitors, perhaps aware of their increasingly strong abilities to innovate technologically and of their large local market. According to an Intel-Newsweek survey, 63 percent of Chinese believe that China will overtake the U.S. on technology innovation over the next 30 years. According to this survey, the Chinese people are confident in and think positively about the role that commercializing innovation will play in driving future economic growth.
The education ecosystem also offers a growing pool of scientific talent. For example, it is estimated that more than 700,000 computer science-related engineering students graduate each year in China. Many educational institutions also offer entrepreneurship training. Shanghai Jiao Tong University, for example, has professors that understand entrepreneurship, such Dr. Tony Ni, an entrepreneur both in China and in United States. Moreover, China has established the Entrepreneurship Foundation for Graduates (EFG) with a mission to create a favorable entrepreneurial environment by promoting commercialization of scientific and technological breakthroughs and to cultivate creative entrepreneurial talents. EFG is the proud host of Global Entrepreneurship Week/China.
In addition, China has been increasingly benefitting from Chinese graduates from top U.S. universities that look to China as the base for their companies. Si Shen, for example, founded of PapayaMobile, a software application that turns mobile phones into social networks, after she obtained her degrees in computer science and engineering from Stanford.
Long gone are the days when China relied on large, state-managed industries such as banking, steel, and electricity generation. Just ask Zafka Zhang, founder of China Youthology, a market-research company that helps the giant companies tap into China's youth culture. Long-term growth for the 21st century will come from the hard work and vision of start-up entrepreneurs in a range of industries, including clean technology, health care and the next wave of technological gadgets that simplify our lives.
Overcoming the obstacles to entrepreneurship, especially China’s overall less developed legal and regulatory transparency, will accelerate China’s transition to global economic leadership. As was evident during the recent visit of China’s President to the United States, many Americans fear this. I view it differently. If the world’s most populous country becomes an even more entrepreneurial economy, we all win.
Stay tuned for more in the lead up to the Global Entrepreneurship Congress in Shanghai March 29th.
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Jonathan Ortmans is president of the Public Forum Institute, a non-partisan organization dedicated to fostering dialogue on important policy issues. In this capacity, he leads the Policy Dialogue on Entrepreneurship, focused on public policies to promote entrepreneurship in the U.S. and around the world. In addition, he serves as a senior fellow at the Kauffman Foundation.