Forget about the academic papers and patent applications. The real force for change in China today could be venture capital jobs and a new entrepreneurial mindset spreading among China’s youth.
That’s the word from Vivek Wadhwa, a senior research associate at Harvard Law School and director of research at Duke University’s Center for Entrepreneurship, in a column for the Washington Post.
A new generation of smart, motivated, ambitious kids is graduating from China’s top universities. But unlike their parents who lived through the Cultural Revolution and who now work in government or state enterprises, this new generation has no desire to play strictly by government rules. They do not hesitate to challenge (or skirt) authority, think outside the box, take risks and most importantly, innovate.
Wadhwa has been visiting China for the past six years and has noticed dramatic uptick in entrepreneurial activity. For one, Chinese graduates used to dream of joining Western companies. There was also a hidden cultural taboo associated with failure and thus the risk associated with starting a business. But no longer. Thanks to the success of well-known Chinese entrepreneurs such as Jack Ma and Kaifu Lee and the fortunes being reaped by the earlier generations of technology startups, joining a startup is now the “in” thing to do in China, Wadhwa says. It’s even acceptable culturally to start and fail and start a business again.
The change in mindset has had a stunning impact on venture capital jobs and investment, too. He cites data from Lux Research which shows venture capital investment reached $5.4 billion in 2010, an increase of 79 percent year over year. There is reportedly so much angel and venture capital available that investors are beginning to compete for startups. An incubator in Beijing called Garage Café is even offering free office space and Internet connectivity in return for getting to the front of the line in attracting promising entrepreneurs.
Unlike American students who see entrepreneurship as a path to building wealth or perhaps changing the world, Chinese entrepreneurs see it as their chance to rise above the rigid system of Chinese bureaucracy and be their own boss. Their main fears? That once successful, their success will simply be stolen by a bigger company like a Baidu or Tencent, given the lax Chinese laws on intellectual property. Or it will simply be usurped by some government demand for control or a cut of the profits.
Meanwhile, venture capital investment continues to flood into China. What’s your take? Does your firm have plans to increase its focus and/or investment in China? Would you consider working there as a venture capitalist? Add your comments below.
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