Innovation is the key to success in today’s increasingly competitive business environment. As Jack Katz and Jean-Jacques Vitrac discussed in their recent essays on the Global Strategic Research Institute website, new approaches are essential in business as well as education. So where can the next generation of global business leaders learn the skills and knowledge base needed to innovate? The answer appears to be in the American university system with California institutions of higher learning the number one destination.
According to a recent State Department press release, the number of foreign students studying in the United States increased 6% last year to a record high of more than three quarters of a million students, 25% of whom are Chinese.[i] Demand from China as well as from other countries for an American education is growing astronomically—the number of Chinese students increased 23% in one year making them the largest group of international students studying in the United States. [ii]
Why America: Learning vs. Teaching
The best of American higher education focuses on teaching students to think creatively, not just memorize textbook concepts and information. These programs encourage students to challenge professors, and examine problems in an innovative ways that goes beyond textbook theory to practical applications of concepts.
For example, the top engineering programs promote multidisciplinary problem solving as illustrated by Stanford Engineering’s mission statement: “…to educate engineers who possess not only deep technical excellence, but the creativity, cultural awareness and entrepreneurial skills that come from exposure to the liberal arts, business, medicine and other disciplines...” [iii] Another example is the Thayer School of Engineering at Dartmouth whose the motto is “The box does not exist.” [iv] Thayer students are encouraged to combine a major in engineering with art, philosophy, and other liberal arts coursework in order to prepare these future leaders with broad critical thinking skills and vision.
American business schools like Stanford, Harvard and the University of Virginia teach leadership and entrepreneurship using case studies and role playing to encourage students to analyze real life situations in order to craft creative solutions to complex challenges. This approach directly contrasts with the methodology I witnessed while teaching college age students in Beijing and Nanchang. The Chinese education system has focused on rote memorization and traditional teaching methods that enable students to score well on standardized tests, but are not effective training for the global business environment.
Role of Chinese (Helicopter) Parents
Chinese parents realize that while their students may achieve top scores by memorizing, this skill will not help them to figure out what it takes to become entrepreneurial or to successfully compete in the global marketplace. My experience with Chinese students in the United States has been at Silicon Valley University in San Jose, California. Over 75% of these students are Chinese, and not one is on scholarship. Their parents send them to Silicon Valley to learn how to become innovative, to improve their English skills and to learn what has made America suceeful. However, it is not just the middle class and small business owners who realize the value of an American education. Some of the most conservative Communist party politicians are sending their children to be educated in the United States. President Xi Jinping’s daughter Xi Mingze is studying at Harvard under an assumed name. Premier Lie Keqiang also has a daughter studying in the United States. Vice President Li Yuanchao sent his son to study at Yale. The Former Chairman of the National Committee of the CPPCC (known for his anti-western views) Jia Qinglin’s granddaughter Jasmine Li quickly adapted to life on the Stanford campus and joined the equestrian team. Bo Guagua, son of the disgraced politician Bo Xilai continues to study at Harvard, and the list goes on. [v]
Once obtaining their American degree, over 70% of the Chinese students return to China including my Silicon Valley students who will return home to run family-owned factories and real estate businesses after graduation. According to the Chinese Ministry of Education the number of returning students has increased 375% since 2005, quite a reversal from the 1990’s and early 2000’s. [vi] when most wanted to stay and work in America.
A Study in Contrasts
So now that the majority of students are returning to China after studying in the United States, is American education helping to fuel Chinese innovation? I believe that the answer is yes. Growth in Beijing’s Zhongguancun high-tech district is a strong indication of increasing entrepreneurship. One important sign is the 526, 412 patent applications filed in the State Property Office--20,000 patents more than were filed in the United States during the same period. [vii] Chinese companies are gaining worldwide attention for their innovative work. A recent McKinsey report suggested that Beijing Genomics Insitute may very well be able to sequence more genetic material then Harvard and MIT combined. Huawei once the center of an intellectual property suit with Cisco, introduced a new smartphone platform with its own design of software at Computer Electronics Show (CES) in Las Vegas, Nevada. Xiaomi known for its Apple-like marketing campaigns, is expected to sell over 15 million phones in 2013, and the list goes on. [viii]
However, in the Internet world, the answer to this question is more qualified. Innovation has been slow among Internet companies despite the exponential growth in Internet usage. According to the Boston Consulting Group, the number of new Chinese Internet users in 2012 was approximately the same size as the entire population in South Korea, and the number of new Chinese e-shoppers in the same year was greater then the number of people in Canada! I witnessed this trend while teaching at Jiangxi University of Finance and Economics. The majority of my students bought their books, clothes and technology on line. They have grown up communicating on QQ or RenRen, both Chinese internet companies which according to chinawatch.com, social media users in China own on average 2.78 Chinese social media accounts.
Yet, despite tech savvy students, the software startups in search and social media are still primarily clones of American companies. My students would “baidu” instead of “google” for information. They post videos on Youku (not YouTube) and chat with friends on RenRen and QQ (Facebook equivalents). With government control of the Internet, unclear property rights, and the ease of illegal downloading, there is very little financial incentive to innovate in this area. As a result, it is unlikely that the software industry in China will develop as quickly as other industries in the high technology area.
Threat or Opportunity?
Increasing numbers of Chinese students are coming to the United States to learn innovation has in turn helped to fuel entrepreneurship in Communist China. It should not come as a surprise that the students are learning quickly--entrepreneurship has been very much a part of the Overseas Chinese culture. The threats are obvious: American universities are training future competitors. In addition, highly educated engineers, scientists and technical researchers returning to China create a “brain drain” in the American economy. However, there are positive aspects. These same Chinese students contributed to the American research and the scientific communities while in the United States. They spend money: foreign students paid out close to $23 billion dollars boosting local economies. Approximately 70% of these students paid full tuition potentially enabling more American students to receive scholarships funded in part by the foreign students’ tuition. [ix] Studying alongside their Chinese counterparts, American students are exposed to another culture and other ways of thinking. These study partnerships can evolve longer term into fruitful business relationships between citizens of the number one and two economies in the world. Innovation sparks more innovation as demonstrated daily in Silicon Valley. In the long run the global community benefits from the breakthroughs in technology whether these take place in the United States or China.
Concerns with China will remain: intellectual property rights and cyber warfare are top areas of contention and the focus of the recent meeting between President Barrack Obama and President Xi Jinping. However, American and Chinese economies are increasingly interconnected financially and now on a personal level as more Chinese study in the United States, and Americans study in China. These connections can help both sides become more globally competitive and successful despite current deep political differences.
[i] http://www.iie.org/en/Who-We-Are/News-and-Events/Press-Center/Press-Releases/2012/11-13-2012-Open-Doors-International-Students The actual number is 764,495 for the 2011/2012 academic year. California saw the largest influx with the majority matriculating at USC and UCLA.
[ii] http://blogs.wsj.com/chinarealtime/2013/03/27/chinese-students-struggle-for-returns-on-education-in-u-s/ 194,029 Chinese students studied in the U.S. in the 2011-2012 academic year. This is a 207% increase from just 10 years ago.