ENTREPRENEURSHIP OR BUST
Ramasamy also expresses concern with China’s ability to nourish an entrepreneurial spirit. Comparing China’s two-decade boom to Japan’s boom in the 1980s, he paints a sobering picture. “Will your children also have that same vigor? That same push to become entrepreneurs?” he asks the lecture hall dramatically. “Even if they’re not entrepreneurs, even to accumulate wealth. Or will they, like the Japanese, get more interested in singing and dancing and playing video games, rather than getting their hands dirty? Will the spirit of entrepreneurship die with the current generation?”
He might be onto something. Despite shrinking unemployment rates — currently a tiny 3.4% — and more able-bodied workers going to work than ever before (including an activity rate of 76% for population between 15 and 64), Japan has sunk into another recession. How can this be? Some believe it’s because Japan’s population is also shrinking. So even if percentages are higher, there are fewer people to go to work. With a cap on children, China could be facing a similar situation.
“Making a profit in China today is probably the most important social responsibility,” Ramasamy says, noting more than 500 million people have been liberated from poverty over the past 20 years. “This is a miracle. No country in the world has ever done this before. How did they do it? Jobs.” Ramasamy believes fixed income is the bridge out of poverty. “If poverty is the single most important social problem we have in China today, creating jobs is the best way to solve poverty and making a profit is the most important social responsibility.”
This is why the Chinese government has become fixated on an 8% annual GDP growth — because, Ramasamy explains, 8% GDP growth creates 20 million new jobs every year. That also happens to be the number of Chinese college graduates every year, he says.
CEIBS CATCHING ONTO ENTREPRENEURSHIP INTEREST
According to Li, an average of about 12% of each class starts their own company upon graduation. Just last year the school introduced an entrepreneurship concentration for full-time MBAs. And they toured students through a brand new on-campus incubator space called the E-Lab. In the greater Shanghai area, Naked Hub, a network of co-working spaces highly popular with entrepreneurs, is sprouting. So far, five Shanghai locations house early-stage ventures like Gululu alongside established foreign brands looking to break into the Chinese market like GoPro and AB inBev. According to Paul Wu, a current CEIBS executive MBA student who manages one of the Naked Hub locations, there will be 12 locations by the end of this year.
Chen believes the entrepreneurial spirit is a natural step in China’s evolution, and one that will persist. “The key driver is the desire of Chinese people to have a good life — just like Americans,” he says. “People want the freedom to explore and to be entrepreneurs.”
But in a product-driven market, Chen says, it’s going to take some creativity and ingenuity. “I think we have reaped the benefit of easy things already. So if you want to go further, you have to be innovative and ahead of the curve,” he explains. “That’s why you see more emphasis on innovation across the nation.”
THE CHINESE TECH BATTLEGROUND
Technology and innovation are the consensus drivers to China’s future and continued rise, Texas-born strategy professor Jeff Sampler says. “Technology is one of the fundamental growth engines of the world’s economy,” he says on the morning of the third day of the boot camp. Parisian and resident China expert David Gosset echoed Sampler the next day during his lecture, telling participants, “The new roots are digital roots. For our European friends in the room, give me one example of a European digital company that has global roots.” The room is silent.
Gosset ticks off China’s global tech companies that are equivalent to those in the United States. Instead of Google, there’s Baidu. It takes a VPN to access Facebook in China, but WeChat, owned by media giant Tencent, allows Chinese and visitors to communicate, post news, and pay for dinner all in one spot. There’s no eBay, but there is Alibaba. Uber exists, but it is bleeding venture capital cash alongside Didi, which is riding a $7 billion funding round, $1 billion of which came from Apple. Of course the intensity of the competition also garners top-talent acquisition.