As MIT political scientist and China expert Ed Steinfeld says, “China [is] one of the most entrepreneurial places on earth.”
Perhaps this observation doesn’t surprise you, given what’s been happening to the Chinese economy in recent years. But you might not recognize how widespread entrepreneurship is in China, or why the country is so full of entrepreneurs.
China doesn’t just have more small business owners than the US; it also has more growth-oriented business founders. According to the 2009 GEM Report, from 2004 through 2009, China had the highest rate of high-expectation entrepreneurship (intending to create more than 19 jobs) of any country covered by the study. More than 4% of the Chinese working-age population is engaging in high-growth-expectation entrepreneurship. In the U.S. that share is less than 1.5%.
Furthermore, China scores higher than the U.S. (and many other nations) on realized rates of new business growth. So it’s not just how much people expect to grow, but also what they accomplish in creating jobs that marks China’s entrepreneurial activity.
What about the rest of the population in both countries? How many plan to become entrepreneurs some day? According to the 2009 GEM, only 7% of Americans between ages 18 and 64 not currently starting a business intend to start a company in the future. In China, the number is 23%.
Photo by babasteve