28th September, Professor Mark Jacobs hold a lecture of Entrepreneurship management on subject of “Entrepreneurship and institutions”, he invited David Diebold, principal, David Diebold & Associates, the chairman of Cornell University, used to work in Commerce Department of United States, to walk into IMBA class to give a speech regarding “The Institutional Situation of Entrepreneurship in China”.

At the very beginning of his speech, David predicted there will be huge pressure for the coming new generation of government to reform. The institutions in China are in old model, financial banks should encourage private entrepreneurs to boost the economy.

An important factor which David indicated is the emerging requirement of innovative economy in China. China’s economy should get away from low-rage labor-intensive manufacturing industry. He hereby illustrated this point by examples of internet technology businesses in China, such as Baidu, Alibaba, they broke the old way of business model to create new opportunities. Business in China needs to be more diverse aspect, also it should focusing on the concept of “service” to add more potential values.

Whereas ever since China entered WTO, with the rapid development of globalization, global supply chain drives the change of institutions worldwide. David mentioned protectionism exists in China, which resists some innovation entering China market. On the other hand, in Chinese domestic business market, most capital & resources are controlled by state-owned companies, recently real estate development attracted much investment yet not sustainable. Though some ventures moves back to private sectors & entrepreneurs’ business, resources are still not enough for them to compete with huge giant ones.

“Gaokao”, the most important exam in China for young students entering college, according to David’s analysis, contributes the most to current lack of innovation in China. There is a common bias against failure, people take innovation as a risk. The education system in China does not encourage innovation, students should follow what teachers told them to do, no discussion, no innovation in class. Robin Lee, the CEO of Baidu, and Jack Ma, executive of Alibaba are best examples to illustrate it again.

Finally, David had a good discussion with IMBA crew, both Chinese & overseas exchange students. They passionately questioned Mr. David with topics such as “how does Chinese private & small entrepreneurs compete with state-owned companies”, “Chinese education system” etc.

“Creativity, patience, determinations”, said David, “I believe would be the most important things for entrepreneurs in China.” Talking about which field he would suggest new entrepreneurs to enter into, he mentioned, in “IT” sector, there are still no state-owned ones, which would be a best choice. “Never goes into strong-controlled field, such as phone or PC industry”, he introduced.

RBS IMBA students listening to David’s speech(above)

David on IMBA class. (above)

Mr. David Diebold. (above)

David Diebold’s photo with RBS IMBA students. (above)

Written by: Jenny Zhang – RBS 2012IMBA