How to Foster Entrepreneurship in China?

A recent study* found that U.S. graduates are much more likely than Chinese graduates to found a startup or join one. This survey of engineering students at three top Chinese universities and Stanford University found that 22 percent of Stanford grads planned to start or join a startup; 52 percent of top Chinese graduates plan to join the government. One 25-year-old graduate in international business explained it this way: “If you work for private-sector Chinese firms, your family will lose face. Those aren’t famous firms.” She went on to say that entrepreneurial jobs are too risky. In Wenzhou, a city whose recent success has been driven by entrepreneurship, “entrepreneurs were viewed suspiciously by many residents.” Li Hongbin, a Tsinghua University economist who worked on the study, says

The current education system does not produce people who are innovative. That makes it harder for the country to reach its long-term goal of building an innovative society.

The government in Beijing knows that entrepreneurship has driven the Chinese economy, and they now have policies in place–for example, to bring back Chinese professionals who attended university in other countries and stayed there. One policy offers a bonus of as much as $160,000 for those who return; and yet, since 2008, only 3,300 professionals have taken up the offer.

Some of China’s top universities are beginning to offer entrepreneurship education programs, of the sort that are now common in the U.S. thanks in part to the funding of the Kauffman Foundation, which has famously sponsored many “Kauffman campuses” where students can major in entrepreneurship and participant in business plan competitions, under the guidance of experienced local mentors. (My employer, Washington University, is a Kauffman campus.) Three of China’s most elite universities, Tsinghua and Peking Universities in Beijing, and Fudan University in Shanghai, have created incubator programs to help entrepreneurs develop commercial applications.

So what’s the solution for entrepreneurship in China? Schools and universities are an important part of the solution; many Chinese perceive their own schools and colleges to be focused on rote learning and not receptive to creativity and critical thinking.  One international business student chose to attend an English language university, run by Britain’s Nottingham University, specifically to acquire the “critical thinking” that her uncle says is lacking in Chinese graduates.

But colleges can’t solve the problem alone. Cultural attitudes need to change to value entrepreneurs. Venture capital is an essential component, and a business climate of open and fair market competition. Many would-be entrepreneurs give up after they realize the bribes they’re expected to pay, and the unfair advantages given to large state-owned enterprises (SOEs). The path to greater Chinese innovation is complex, but education is one of the core components of greater creativity and entrepreneurship.

*Bob Davis, 2013. “Chinese college graduates play it safe and lose out.” WSJ, Page A1, A10.

Sequestration Rhymes

A protest against the automatic budget cuts, known as “sequestration,” is taking place today in Chicago. The organizers had lots of trouble coming up with catchy protest chants. Here’s the best they could come up with (according to the Wall Street Journal):

  • Thank you for the irritation, We say no to sequestration
  • We have major detestation, for your idea of sequestration
  • Congress should have sterilization, when they thought of sequestration
  • Hey we ask for dispensation, from your fast, called sequestration (you have to understand Lent to get this one)
  • Congress needs some liquidation, they dreamed up this sequestration.

Hilarious!

*Elizabeth Williamson, March 20 2013, “Demonstration against sequestration has reasons, but few rhymes.” Wall Street Journal page A1. (Awesome headline, by the way!)

Intellectual Property Law Update

Today’s Wall Street Journal reports two new developments in U.S. IP law.

First, on Saturday March 16, the U.S. Patent and Trademark Office (PTO) is dramatically changing its patent system, from a “first to invent” to a “first to file.”* Under the old first-to-invent system, if you could document that you were the first person to come up with an idea, you got the rights to that idea–even if someone else had filed a patent for that idea first. So what’s wrong with that? It sounds logical: if you thought of it first, it shouldn’t matter that you didn’t run to the PTO before everyone else.

There are two problems: First, every other country in the world uses a first-to-file system, which means if you filed first for the patent on the idea, it’s yours, no matter who can prove they really thought of it two years before you did (from their lab notebooks or whatever). In an increasingly international economy, having our patent system align with the rest of the world is a big deal.

Second, under first-to-invent, imagine how complex the court cases get, when some inventor somewhere says that they actually thought of that idea five years ago. Then, lawyers are poring over old lab notebooks and reading hundreds of emails. It might sound simple: All you have to do is find the email that contains the idea on a certain date–but in fact, it always takes a lot of complex interpretation. Was this lab notebook sketch really evidence of the idea? Usually, it’s close but not quite exactly the idea that’s in the patent. Many inventors think their idea really was this idea, but everyone thinks their idea has a broader scope than it really does under patent law. Companies have been spending billions defending themselves against patent lawsuits, and this change is intended to reduce the litigation.

The second article** talks about copyright protection on sound recordings. The Library of Congress wants to convert their old (and decaying) sound recordings to digital, and then make these digital versions available to their patrons. And it turns out, that’s illegal for something like 177 years after the recording was originally made. The copyright protection even for the oldest recordings, made when the technology was first invented back in the 19th century, will not end until 2067 at the earliest. In Europe, in contrast, sound recordings enter the public domain 50 years after their initial release.

The more I learn about IP law, the more I realize it’s a huge complicated mess. I’ve been impressed with my IP law colleagues, negotiating complex issues at the intersection of law, economy, and psychology of creativity (hence my involvement with the issue). But as I concluded back in 2007 in my book Group Genius, patent and copyright regimes today are too restrictive, and this is reducing societal innovation.

*Ashby Jones, “Inventors race to file patents.” WSJ March 15, 2013, p. B6

**Terry Teachout, “Copyright protection that serves to destroy.” WSJ March 15, 2013, p. D6

Debra Kaye’s New Book, Red Thread Thinking

I really enjoyed Debra Kaye’s new book about entrepreneurship and innovation, Red Thread Thinking.  Kaye is what I would call a marketing expert, but nowadays the trendier more correct term for marketing is “brand strategy”. She’s an expert on consumer product trends, and she’s consulted for Apple, Colgate, McDonalds, American Express, you name it–she is a tapped in thought leader.

I was intrigued to find a marketing expert (sorry, branding expert) writing a book about innovation, but after reading Kaye’s book it makes perfect sense. For Kaye, successful branding and marketing depends on identifying the hidden links between observations, experiences, facts, and feelings–and when we do that, we uncover fresh and surprising new insights. She’s right: the psychological research likewise shows that the most original and surprising ideas come from making hidden and distant connections. The first epigraph in her book is Steve Jobs saying “Creativity is connecting things” (I quote the same epigraph in my new book, Zig Zag!)

Kaye’s book tells you how to identify and understand these hidden “cultural codes and shifts in consumer perception” with the goal of “catapulting fresh products to iconic status.” Every Chief Marketing Officer wants that! So how do we do it? Kaye identifies five “red threads”

1. Become better at observing and interpreting what’s around us

2. Take a fresh look at the past

3. Know what makes your market tick

4. Learn how to create a new “language” to make your product stand out, and yet also be universally understood

5. Persevere, review, and refine your ideas but without compromising integrity or core beliefs

I liked this book, because I am a psychologist studying creativity, and this brings a completely different perspective to the same phenomenon: How to engage in behaviors and habits that lead to consistent and deliberate creativity.

Creative Careers

The creative journey is filled with twists and turns, unpredictable developments, and surprising new insights (as well as frustrating dead ends). That’s the message of my new book Zig Zag, which is filled with advice about how to succeed in your creative journey.

At the SNAAP conference here in Nashville, today’s lunchtime presentation was an interview with comedian Lewis Black, by playwright and lyricist Willie Reale. Lewis talked a lot about his career, and I was struck by how many zigs and zags he passed through before he became “Lewis Black” the famous comedian. Until the age of 40, he was a struggling playwright, doing okay in serious theater, but starving artist poor…his path to standup comedy was not at all linear. Check out these zigs and zags:

  1. In high school, he loved theater, and decided he would go to college to study theater.
  2. At UNC and then at Yale’s School of Drama, he followed this dream.
  3. He moved to New York, and got a job as a bartender at a divey bar in the East Village. In exchange for tending bar, the owners let him book acts in the club, so he got experience and connections with the theater scene.
  4. Eventually he moved to manage the West End Theater, where he stayed for eight years. He started introducing the acts, and gradually his introductions became longer as he gained confidence. After a few years, he was doing a special one hour stand-up on Saturday nights.
  5. At the age of 40, still pursuing his career as a serious and respected playwright, he cowrote a quirky musical about the Russian Elvis Presley, filled with Cold War themes; it gained some attention.
  6. It was 1989, and two weeks before the play was to open, the Berlin Wall fell. He and his cowriter had to add a second act to the musical in which the Berlin Wall fell; that took six months.
  7. The revision was successful, and they were invited to produce the play at a respected theater in Houston.
  8. Down in Houston, after several days and weeks of being treated badly by the management of the theater, one night he got really frustrated. To let off steam he went across town to the local comedy club’s open mike night. He did a 15 minute bit, and as he put it, “I killed.” On the spot, the owners offered him top billing and $1500 a week. That, he says, was the moment he decided to give up on playwrighting and become a standup performer.

This story is just like the zig-zag path that leads to successful creative innovation. And it’s not just Lewis Black’s career; this morning, Professor Steven Tepper presented data showing that creative careers almost always follow these unexpected twists and turns.

It’s fascinating that creative careers have the same improvisational, unpredictable structure, as the path that leads to a single creative product or invention.

My new book ZIG ZAG is coming out later this March; pre-order it here.

Where Country Music Comes From

Tonight in Nashville, I heard three solo performances by legendary singer songwriters associated with the famous Bluebird Cafe. You might not know their names, but I guarantee you’ve heard one or more of their songs performed by famous stars:

  • Tom Douglas: He co-wrote Miranda Lambert’s hit song “The House That Built Me” with Allen Shamblin (also on the stage tonight; Allen was the one who sang this song) and he wrote Lady Antebellum’s #1 hit “I Run To You” (which he performed).
  • Leslie Satcher: She’s written hit songs for George Jones, Patty Loveless, George Strait, Merle Haggard, Willie Nelson, and Bonnie Raitt. My favorite of her songs was “You Remain” which was recorded by Bonnie Raitt.
  • Allen Shamblin: He wrote Randy Travis’s #1 hit “He Walked On Water” and co-wrote “I Can’t Make You Love Me” (with Tom Douglas, who closed out the evening with that song). I was really impressed by his version of a song I hadn’t heard before, “Number 37405,” which was recorded by Tim McGraw.

As a creativity researcher, I was particularly interested as the songwriters talked about their creative process. The theme that stood out was collaboration: After all, two of the folks on stage, Tom and Allen, cowrite together often. And all three of the musicians talked about the importance of the songwriting community, of sharing ideas and playing bits of melody for each other. Leslie Satcher talked about the value of sharing ideas with non-musicians: actors, movie directors, visual artists. It’s the kind of creative process I describe in my book Group Genius: the power of collaboration to drive creativity.

All three talked about how long it takes for a song to develop–from the first intriguing lyric, to a first draft that might sit on the shelf for five or six years… until something makes them pick it up again and tweak it a little bit more. That’s the story behind “The House That Built Me”: Tom said no artist was interested in the first draft, but five years later, after many revisions and twists and turns, four different artists wanted the final draft. That’s the kind of story I describe in my new book Zig Zag: The Surprising Path to Greater Creativity.

From their stories, it become clear that all three songwriters work in a complex industry system that includes song pickers, agents, producers, and the famous performers themselves. They all told us fascinating stories about the zig-zagging chain of events that resulted in one or another song making its way to the artist who eventually recorded it.

No doubt, the famous singers that recorded these songs have better voices (the songwriters would be the first to admit) and superior production. But I loved seeing the creator of a song, with just a guitar or a piano, singing alone. It’s a window onto the creative process.

The Entrepreneur’s DNA

Last Tuesday’s Wall Street Journal had a special section on “Unleashing Innovation,” with stories that emerged from a recent conference in Singapore. I was particularly interested in an interview with Hal Gregersen, a professor of innovation at Insead business school, and a coauthor (with Jeff Dyer and Clayton Christensen) of The Innovator’s DNA. The “DNA” refers to the five defining traits of innovative people:

  • Associating: Drawing connections between questions, problems, or ideas from related fields
  • Questioning: Posing queries that challenge common wisdom.
  • Networking: Meeting people with different ideas and perspectives.
  • Observing: Scrutinizing the behavior of customers, suppliers and competitors to identify new ways of doing things.
  • Experimenting: Constructing interactive experiences and providing unorthodox responses to see what insights emerge.

In my forthcoming book Zig Zag, I draw on creativity research to identify eight “habits of mind” or disciplines that lead to greater creativity. The overlap with Gregersen’s five is pretty close!

  • “Associating” is essentially identical to my sixth step, FUSE.
  • “Questioning” is just like my first step, ASK.
  • “Networking” overlaps with a couple of my steps, but mostly with LOOK, or staying aware and mindful of new ideas. “Networking” is even more closely associated with my 2007 book Group Genius.
  • “Observing” is basically the same as my third step, LOOK.
  • “Experimenting” is similar to my eighth and final step, MAKE. For me, MAKE is about externalizing your ideas early and often, and then to interact, refine, and revise.

I’m excited to see that Gregersen’s research shows that entrepreneurs are particularly good at engaging in these five activities. In addition, my research shows that these work for all creativity, not only entrepreneurship but also visual arts, music, science, cooking, family life…the eight steps of Zig Zag lead to greater creativity in all aspects of your life.

*Gregerson, Feb 26, 2013, “The Entrepreneur’s DNA.” WSJ, page B13.