Chinese Entrepreneurship in a Global Era

Citation

Peris‐Ortiz, M. (2010), "Chinese Entrepreneurship in a Global Era", Management Decision, Vol. 48 No. 1, pp. 172-174. https://doi.org/10.1108/00251741011014517

The book Chinese Entrepreneurship in a Global Era, edited by Raymon Sin‐Kwok Wong, brings together various approximations on the phenomenon of business and economic development in China and South East Asia, in which political, historical, institutional, cultural, demographic, economic and social circumstances go to explain the behaviour of the entrepreneur. In Hong Kong, the demographic changes and “improved education and training” of the young generation of entrepreneurs ties in with a broad spectrum of economic activities and a probable affinity to western organizational and management practices, which in itself represents a form of entrepreneurship (Wong, Introduction, 13). Whilst in other regions or cities of the Pearl River Delta in China, or in South East Asia, traditional social networks still play a more or less relevant role, according to the case studies on entrepreneurial activities.

In this book, the figure of the entrepreneur is seen as the agent that searches for autonomy and profit, and is capable of identifying opportunities, taking risks and interpreting relevant information, thus creating the innovative mixture of capital and resources that all businesses require. In order to do so, the entrepreneur relies on traditional social networks (Bian, Chapter 8) or at least in the western model (Wong, Chapter 9). The concepts of entrepreneur as innovator (Schumpeter, 1934) or of the corporate entrepreneur as a driver of organizational renewal (Zotto and Gustafsson, 2008) are not addressed in this research. The desire for independence along with the necessary information and resources, and assuming risks combine to shape the figure of the entrepreneur, and research focuses on the historical, social and economic roots of this activity. Depending on whether entrepreneurial activity is studied in Hong Kong or in other cities or areas of South East Asia, the entrepreneur starts up the business with their own resources or appears as linked to traditional family and social networks but; in any case, this figure is the owner of the assets and an important driver of change and industrial and commercial development of the regions studied.

Human action, in this case on the part of the entrepreneur, is the driver of change, and at the same time these actions are conditioned by the context in which there are forces that drive towards the stability of traditional structures, such as family relationships and small business ownership, as well as forces such as increasing globalization (Yeung, Chapter 2, 39), economies of scale and changes in institutions (Long and Han, Chapter 3), which lead to entrepreneurial actions that go further than traditional interpersonal networks. For Long and Han, the evolution of the Chinese entrepreneur towards a western model has come about because the changes in the economic context carry more weight than the traditional cultural context, both in mainland China and around South East Asia, although differences do exist between China, with an enormous potential internal market, and Hong Kong or Taiwan who depend heavily on exports and the brand names and technology of western multinational corporations (p. 54).

Wong (Chapter 4), in an extraordinary chapter on the contemporary social and economic history of Hong Kong, examines the evolution of the country's main industries under the assumption that the distribution of economic activity, the number of workers both self‐employed and employees., and other aspects such as the skills or specialization of managers, make up the framework wherein advances in entrepreneurship in different industries are explained.. Entrepreneurial activity appears here as a consequence of changes in productive forces and of the weight and evolution of traditions, as well as of the detailed information provided by the author who proposes two multinomial logistic regression models that enable the analysis of significativity of the data, highlighting, among other results, the desirability of separating employees and self‐employed workers (two sources of entrepreneurs), and the fact that the types of activity in which “male and female entrepreneurs are involved in are (still in 2001) rather segregated.”

With regard to Malaysia, after the race riots of 1969, the Malay authorities encouraged sizeable inter‐ethnic business partnerships among large firms, which has become diluted over time. However, in the 1990s, in smaller firms, collaboration and ownership arose naturally among members of different ethnic origins, which was capable of contributing to entrepreneurship of the firm (Gomez, Chapter 5). In addition, in a study of Singapore, Liu (Chapter 6) examines entrepreneurship in the transnational context. In this sense, the transnational entrepreneur is defined as “a social actor capable of bearing risks and taking strategic initiatives to establish, integrate and sustain foreign operations” (p. 120). Transnationalists represent “a growing number of persons who live dual lives: speaking two languages, having homes in two countries, and making a living through continuous regular contacts across national borders” (Portes et al., 1999, p. 217)[1]. Moreover, Liu considers Sino‐Singaporean entrepreneurship, with regard to the dimension of the technopreneur (as creator of innovative technology) or entrepreneur as broker (or agent of business and organizational innovation).

In the cases of entrepreneurial activity studied by Chen, Jou and Hsiao in Thailand and Vietnam (Chapter 7), traditional conditioning corresponds to ethnic networks and the forces that emanate from global competition complement each other in examining how the social and economic context help to explain business actions. Chen, Jou and Hsiao illustrate this social and economic context via the evolution of the production network at Cal‐Comp Electronics (Thailand) and at the Sanyang Industry Co. (Vietnam), showing in these in‐house models “that the constant improvement in the production efficiency and coordination capability by means of reciprocal learning is the key for the whole network to survive” (p. 156), in a continuous adaptation of supplier firms to the global competence and the main entrepreneurial firm of the network (the dominant enterprise or the contractor of supplier firms).

Along the same lines as those described above, in which the forms of entrepreneurship are explained from the perspective of social and economic context, Bian (Chapter 8) explains cases of various entrepreneurs in different cities in South East China in which friendship and social relations enable information, suggestions, business opportunities or start‐up investment capital. The author carries out a more systematic study of these questions in three Pear River Delta cities (Zhongshan, Fushan, and Jiangmen), using a sample of 830 firms. 90% of the firms included in the sample indicate that obtaining start‐up investment capital is heavily embedded within the founders' social networks, and that these networks also play a fundamental role in information on business opportunities and in the links that the firm establishes or maintains with its most important customers. The percentage of founder's prior ties with clients is 73.5 percent, and the belief that the relationship with the customer will continue at a later stage is 52.5 percent.

Finally, the book ends with a new chapter on Hong Kong (Wong, Chapter 9), in which the author examines educational, demographic, economic and social circumstances that explain the proximity of the entrepreneur in Hong Kong to the Western economic management model.

The most important aspect to be learnt from this excellent book is to see how entrepreneurial activity, in different social and historical circumstances, corresponds to different forms of entrepreneur. The entrepreneur changes history but, except for revolutionary exceptions, through the channels that establish political, institutional, cultural, demographic economic and social conditions.

Notes

Footnote: Cited by Liu, p. 121.