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Entrepreneurship On Raise in China
Entrepreneurship On Raise in China
Entrepreneurship On Raise in China
The first wave of reforms and opening up of China’s economy under Deng
Xiaoping spurred the vanguard generation of entrepreneurs in the 1980s.
These entrepreneurs typically had little to no access to knowledge of modern
business management. Some even lacked post-secondary education. At the
time, they were pioneers who were remarkably bold to start their own
businesses. In the early 90s, a number of government officials inspired by
Deng’s “ Southern SO -0.11% Visit” left their government roles and ventured
into businesses. This was a rather speculative move that required great
courage. If they failed, the “iron rice bowl” they had abandoned would not
welcome them back with open arms. At this time, these people were
considered foolish by many for leaving these highly desired positions of
stability and prosperity. The majority of this “Gang of 1992” were quite
successful in their entrepreneurial pursuits and some of them eventually
became industry leaders.
Today in China, we see numerous young people who were born in the 1980’s
and 1990’s with entrepreneurial aspirations. They come from not only the
metropolis like Beijing, Shenzhen or Shanghai, but also from second-tier or
even smaller cities. Undoubtedly, a fair number, or perhaps the majority of
them will not succeed or at least not on their first attempt, but a few may.
China is large and even a small percentage of a large base is still a significant
number. Unlike their predecessors, these youngsters are not afraid of failure.
For them, "trial and error" is an inevitable part of the process. The outcome,
whether positive or not, adds to their experience and opens up even more
opportunities in the future.
To be sure, many business people in China are still trying to take short cuts and may not
abide by rules and ethics. However, we do see an increasingly growing number of
entrepreneurs who are genuinely trying to grow their business and be successful in legitimate
ways. We are living in an era where entrepreneurship is spreading fast, entrepreneurs are
getting younger, and growth is often exponential. This new generation of China’s
entrepreneurs illustrates the vitality, creativity and increased productivity that are the core
driving forces propelling China's next stage of development.
China is now the world’s second largest producer of “unicorns,” i.e., non-listed companies
valued at over US$1Bn. The most representative ones are Xiaomi, Didi Chuxing, China
Internet Plus (recent merger of Meituan and Dianping) and DJI. In addition, Baidu, Alibaba,
Tencent and Xiaomi are on the world’s 50 smartest companies list presented by
MIT Technology Review in 2015. Furthermore, by the count of China’s Ministry of Science
and Technology, there are 115 university science parks and over 1,600 technology business
incubators in the country providing mentorship, legal advice and office space to dreamers and
aspiring entrepreneurs.
A majority of these Chinese innovators excel in business model innovation. As they move on
to acquire new capabilities by building ecosystems through strategic partnerships and
mergers and acquisitions, we expect to see more China-rooted technology innovators on the
global stage. At the heart of China’s disruptors are the entrepreneurs with a shared dream for
success, a pursuit of objectives brimming with creativity and a relentless drive to realize their
goals. These goals will ultimately rewrite the rules of business for China and increasingly for
the rest of the world.
A unique phenomenon is taking place in China today. While its political system is inherited
from a top-down planned economy hierarchy, its leading entrepreneurial companies,
especially the younger, more dynamic ones found in the Internet industry, adopt much of
their mindset, culture and organizational principles from Silicon Valley. In fact, many are
closer to Silicon Valley than they are to Beijing. For these companies, China’s political and
economic structure is mixed with Silicon Valley culture, each influencing the other and
creating something new. This osmosis is changing China in a way that we have not seen
before and would lead China into a new era.
Edward Tse is founder & CEO, Gao Feng Advisory Company, a global strategy and
management consulting firm with roots in China. A pioneer in China’s management
consulting profession, he led the Greater China operations for two major international
management consulting firms for 20 years and is widely known as China’s leading global
business strategist. He is author of The China Strategy (2010) and China’s Disruptors
(2015).