The following is one of a series of blog post that were written while I was in China in the spring of 2009 as part of my Eisenhower Fellowship. If you have interest in China’s culture I think you will enjoy this series.
The New Resource
In the pre-industrial era, the act of boarding a small boat that was packed with hundreds of people and setting off across the sea in hopes of arriving in America was a tremendously dangerous task that required great risk, tolerance and sacrifice. These daring journeys required men, woman and children to live in small cots and hammocks packed together to maximize space during the long voyage. Food turned moldy and sour and water became foul and undrinkable. The discomforts were nothing compared to the risks of survival. Childbirth, disease and death in these tiny quarters were commonplace. Storms and pirates also claimed many ships during this journey that would typically take over six weeks.
On arrival, it was understood that America was not the place to go if you wanted an easy life. America was a difficult environment that often required hard manual labor to survive. The newly arrived were not asked who they were, but what they could do. For those willing to work, the opportunities were endless. The federal and local governments of the day provided access to what is now called the American Dream, by providing incentives to invest in cheap, fertile land in the west.
Between 1820 and 1920, 33 million immigrants arrived on the shores of America. They viewed this journey as a calculated risk in search of a better life for themselves and their families.
Likewise, those who were happy with their lives or simply unwilling to take a great risk remained in their respective countries. As a result, compared to other nations in the world, America emerged as a country filled with a disproportionate number of calculated risk-takers. This culture has been reinforced as those who are not comfortable with calculated risk-taking typically fail to flourish in the American culture. What has emerged is a society that admires hard work and calculated risk-taking by those with a passion and purpose to excel. This is a key ingredient to our success as a society.
Standing in the Matrix Ventures board room on the 27 floor in downtown Beijing, one can see massive buildings and new construction as far as the eye can see through the hazy Beijing air.
As we sit down to speak with our host for the day, Mark, it is clear that no interpreter is needed. A brief introduction revels that Mark was born in California. His parents had emigrated from China to the United States well before his birth. Growing up in San Francisco Mark never learned a single word of Chinese. After attending Stanford he held a couple of jobs in early stage businesses and one with a small boutique venture capital firm. About 3 years ago he took a step back and tried to look at the world objectively. At the age of 26 his goal was to determine the best path forward which would provide him the greatest opportunity.
After an honest reflection of his situation he decided to leave the bay area where he was born, raise and worked his entire life (in fact, he had always lived in a 5 mile radius). His journey would land him at a University in Beijing were he quickly learned the basics of the Chinese language. His American education provided him unlimited opportunities in this developing land with an endless need for well educated individuals with strong experience.
The need for knowledgeable talent is so well recognized by the Chinese government that several plans are in place to attract the world’s top talent. The most compelling program is the one designed to attracted entrepreneurs. In short, the plan provides aspiring entrepreneurs who have degrees from western universities the following incentives to start a business in one of the country’s 54 high tech parks:
1) A subsidy of 1 million RMB ($150,000 USD) to start a business. They take no equity; it does not need to be paid back.
2) Several other financing options by local governments which could provide loans for up to an additional 1 million RMB. Loans are typically guaranteed by the company not the individual.
3) Tax abatement – zero taxes in years 0-3, 17.5% taxes in years 4-7
4) Basically free rent at the industrial parks which have every imaginable resource an entrepreneur would need.
5) Assistance in finding local talent.
6) Guaranteed employment for one’s spouse.
The program also offers many other small benefits.
Mark’s migration in itself would not be significant, if I had not met over 10 ex-patriots in the past week, all educated in the United States, who told me similar stories. Like electricity that follows the path of least resistance, talent tends to follow the path of opportunity.
The governments of the past have competed over real estate and natural resource. Today, there is a quiet unknown battle brewing to attract and maintain the most valuable resource in the world: Knowledge.
