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Opinion / Nicolas Santo

Bit too smart or bit too lazy?

By Nicolas Santo (Chinadaily.com.cn) Updated: 2014-11-21 16:08

If taking risks is not a simple decision, what can governments do to support those who are thinking of doing so, foreign or Chinese? Several Chinese cities and development zones try to attract investment by “simulating” the business environment that exists in places like Silicon Valley or Germany. Undoubtedly, this is of great help. But looking at China’s own backyard is also important. Foreign businesses are dying to learn from the Chinese way of innovating. Foreign businesses need to understand the ecosystem that facilitated the success of companies like Alibaba and Tencent. To make this possible, building strong teams with global vision, especially at the local government levels, is essential.

Edmund Phelps, 2006 Nobel Economic Prize winner who is currently working at a Chinese university, usually highlights that China needs a radical increase in “indigenous innovation”. He also says that, according to the experience of other countries, innovation is powered by the private sector, not by the public sector. True, public sector tends to be bureaucratic and private sector efficient. But what if China can find a way to inject a larger dose of entrepreneurial spirit in the public sector?

Watch out: this should be done abiding by the rule of law to prevent any flourishing of corruption. José Mujica, the Uruguayan president who has become a worldwide celebrity for his austere lifestyle, recently said: “We need to push away from politics those who like money too much”. I agree. However, when finding legal ways to do so, it is vital not to be so restrictive that you exterminate the energy of honest people who have “intrapreneurial” mindsets and do not care about personal economic rewards. Ultimately, it is always preferable to find ways of stopping that person that is a bit too smart rather than finding ways to push that other one that is a bit too dumb.

As it rises, China innovates. The world is waiting. What an exciting time to be here.

The author is an investment consultant with the Foshan Bureau of Commerce and a former research scholar in China-Latin America Economic Relations at the Harvard Law School and Tsinghua University.

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