Why there aren't many innovators in China

http://joezhou.posterous.com/startups-in-china-why-there-arent-many-innova

by joezhou • 15 years ago

69 27 15 years ago

joezhou.posterous.com

awflick• 15 years ago

My read on China is that there is a weaker society culture while also having a stronger family culture. This probably means that a lot of startup financing will be from families as the middle class grows and there is spare cash around.

wisty• 15 years ago

The reason I think - China is choked for capital. Yes, there is money, but not a lot. Unless you are doing are doing a government contract (i.e. building infrastructure) or are in real estate, you don't get much capital. Interest rates are artificially low, but only if you can get a loan - i.e. you look very very safe. Why bother investing in business, when you can borrow at a low rate and invest it in houses?

Chinese businessmen look rich. Some of them do have a lot of money, but most are just richer than the average Chinese worker. And because the poor Chinese workers are poor, they can't bootstrap their way up so easily.

dublinclontarf• 15 years ago

Sorry, can't read the article, blocked here(China). There is plenty of money here, especially if you've got a good idea and whats needed, no shortage.

But China in general doesn't do different or new or innovative. They do better at the same thing, where better usually means cheaper, but not always. If they can't compete in that way, then they just try to get the government to crush any non-Chinese competition.

dimmuborgir• 15 years ago

I'd like to know if Posterous itself is blocked in China or just the blog page?

joezhou2• 15 years ago

Posterous. I had to use VPN to post. Seriously

known• 15 years ago

Isn't cloning products and exporting them their forte.

Suan• 15 years ago

I'm a Chinese Malaysian and pretty familiar with Chinese culture and their ways. For those of you who might be skeptical, I think this article quite accurate.

I've tried hard to think of recent Chinese tech inventions that are truly new, and not a ripoff of a popular existing product, and could never come up with any, until just recently. I bought one of these "Air Fly Mouse" http://www.airflymouse.com/ and it works as advertised! Here's to more innovation coming from China.

maeon32• 15 years ago

Did the guy who brought the Air Fly Mouse to market get fantastically rich and have the entrepreneurial spirit to turn those winnings toward a more ambitious goal, like how Elon Musk did with paypal -> SpaceX? Something is blocking the furnace of innovation over there.

corecirculator• 15 years ago

Though they take a lot of flak recently, patents and patent protection are crucial for the environment in which any innovator can market his/her products, without fear of the idea being copied and mass-produced by a mega-corporation.

dasil003• 15 years ago

Where's the incentive to innovate if you have a huge market with tremendous cultural barriers to entry for the most innovative companies in the rest of the world?

moonhorse• 15 years ago

Agreed. The risk for innovating is too high. When there are ideas up for grabs in the US, why not just take it and localize it. This is simply a rational decision.

cleaver• 15 years ago

China has long culture of believing in studying hard and becoming part of the system as the route to success. (The imperial exam system.) Although it no longer formerly exists, there are analogues and the influence is still there. It is ingrained from birth that you study hard, get into the right university then reap the rewards. Beijing locals I talked to were puzzled by the idea that government workers in the west could get in trouble by accepting gifts and favours. In China, that's the main reason you would follow that career path.

This doesn't lead to a very entrepreneurial culture, although there are many who will still try to start their own business. Then you start to hit the barriers discussed in the article. Another barrier you can hit is that if you start to become successful, the government will appoint a party member to your management. Further, if you are in certain fields, the government erects tax and regulatory obstacles that will create an advantage for state-owned enterprises.

It's unfortunate... there are enough in the under-35 age group, who might actually break out of the old culture and innovate. They face a lot of obstacles and that will be bad for China's long-term outlook.

maeon32• 15 years ago

In America intelligence is seen as Yankee ingenuity, building a better mousetrap. Talking back to your superiors and finding a better way is smiled on if you can produce results in the states.

In china, intelligence is seen as efficiency, doing something well, getting the right boxes filled on the exam, non-intelligence related things that are called intelligence. Go talking about how the yuan is pegged to the dollar instead of gold and the government won't hire you because you aren't parroting the group think (I have experience talking to some china-women about this). Try to break out of your class and get beaten back into it.

It's the culture. I really think if china could break out of it's meek-slave mentality and have them start thinking that the Earth is theirs for the taking if they want it, then it could blow United States out of the water a thousand times over. Educate the meek slave class sleeping giant with care! It took thousands of years to craft a group of people who will work and not fight back when exploited.

Qa8BBatwHxK8Pu2• 15 years ago

They can't afford ethics, honesty, "care and affection" and stuff. But without it they can't beat the slave spirit so hardly ingrained in their social DNA. Egg and the chicken, huh? They need to propagate the wealth in their system so they can stop worrying about the cash and start being themselves.

Qa8BBatwHxK8Pu2• 15 years ago

> Yes, there's a lot of money but there's not enough ethical business people.

Well, that's bound to happen when a generation suddenly becomes rich for first time in long family history. You kind of had it coming.

It'd take some metabolism cycles to ingest the wealth they come by. Until then they'll act like pigs on money steroid rather than the rich.

Best to avoid the shitbag of shitstorm until they learn to be civil.

jenhsun• 15 years ago

That's why I was pitching so many times to my friends. Why not go to Taiwan first? Small island for testing the foreseeable mainland market, initial understanding the culture and language, and enjoy freedom of speech and better human right. Mostly OEM industry HQ are all right here. All you have to worried are air pollution, the crazy traffic, and the heat, humidity tropical weather. There is a site called techorange dot com blog talked about China and Taiwan startup. You can have a look.

donw• 15 years ago

As a Westerner, I'll also put in a vote for Taiwan -- great people, big pool of talent, but overall a western-style business environment.

colintan• 15 years ago

This was the most damning line in the article and points to a genuine breakdown in the ecosystem, or lack thereof:

"Actually a more common practice is that VCs would have take one of the pitches he really likes and just hire a bunch of engineers."

zhemao• 15 years ago

The internet in China isn't that good. Transfer fees are slow, there is a lot of government censorship, and not many people can afford it. Why invest in a risky internet startup, then, when there is much more money to be made in manufacturing or real estate? So the financial incentive to invest in a tech startup just isn't there. It's probably also difficult for potential startups to get good engineers, as the brightest students usually go into government or work for one of the large government-sponsored corporations that dominate the economy.

mavin• 15 years ago

Relevant article: China's Education Army

http://www.fastcompany.com/magazine/158/china-education

Why there aren't many innovators in China

Related Stories