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Entrepreneurship: Antidote to Uncertainties

Nov 04-2020   



In a recent summit on manufacturing, Prof. Zhang Weiying of the NSD laid out the four types of uncertainties confronted by innovation and the critical role of entrepreneurship therein. He’s PKU Bo Ya Distinguished Professor and Director of the Network Economy Research Center of PKU.

 

China’s economic growth in the past was largely arbitrage-driven, i.e. combining successful technologies from around the world with extremely low production costs. But such opportunities have dwindled in number while concurrently an ever more higher bar is set for innovation.

 

Innovation is bound up with four types of uncertainty: the uncertainty of technological feasibility; the uncertainty of innovation’s commercial value; the uncertainty of complementary innovation; and the uncertainty of institutions, cultures and policies. He invoked a range of examples to illustrate. Steve Jobs’ request for a smart screen for iPhone, in the place of a traditional keyboard or stylus, was concluded ‘impossible’ by all of his engineers. He insisted and overturned their conclusion, subsequently pulling off an unprecedented success. In the case of A380, the tech side seemed unassailable, yet the commercial side hadn’t been validated and its production has been suspended. Sometimes a complementary innovation has to emerge to make the original innovation viable; for example, high-purity glass became available in 1970 and got laser, invented in 1960, into full play in the form of optic cables. In 1650, the first café was opened by a Lebanese in Britain but was vehemently opposed by bars, tea merchants and other drink providers, to the extent that the then king issued a decree to close it down in 1675 on ‘national security ground’.

 

The uncertainties today are no less daunting than those of yesteryears. For Wechat, TikTok and Huawei to truly go global, what to surmount has nothing to do with technology and much to do with institutions, cultures and values.

 

Innovation is getting harder. Entrepreneurship holds a special place in overcoming the challenges. Prof. Zhang elaborated on the discrepancies between entrepreneurial decision making and ordinary decision making. The former isn’t a scientific one; rather than simply based on data, entrepreneurs must rely on imagination and judgement to see the unseen. Among corporate decisions, 95% are management in nature and 5% are entrepreneurial. Moreover, entrepreneurial decision making is not about seeking answers to given constraints, but about transforming the constraints per se. If they fail to create the desired conditions, they risk being labeled a liar. Elon Musk has been on verge of such a disgrace for several times. In addition, an entrepreneur doesn’t just set out to make money – which is but one of the criteria for proving his ideas. Prof. Zhang called on the entrepreneurs to make something of value for the consumers, society and country. One must always bear in mind that the market is the ultimate litmus test, he said.

Entrepreneurship: Antidote to Uncertainties

Nov 04-2020   



In a recent summit on manufacturing, Prof. Zhang Weiying of the NSD laid out the four types of uncertainties confronted by innovation and the critical role of entrepreneurship therein. He’s PKU Bo Ya Distinguished Professor and Director of the Network Economy Research Center of PKU.

 

China’s economic growth in the past was largely arbitrage-driven, i.e. combining successful technologies from around the world with extremely low production costs. But such opportunities have dwindled in number while concurrently an ever more higher bar is set for innovation.

 

Innovation is bound up with four types of uncertainty: the uncertainty of technological feasibility; the uncertainty of innovation’s commercial value; the uncertainty of complementary innovation; and the uncertainty of institutions, cultures and policies. He invoked a range of examples to illustrate. Steve Jobs’ request for a smart screen for iPhone, in the place of a traditional keyboard or stylus, was concluded ‘impossible’ by all of his engineers. He insisted and overturned their conclusion, subsequently pulling off an unprecedented success. In the case of A380, the tech side seemed unassailable, yet the commercial side hadn’t been validated and its production has been suspended. Sometimes a complementary innovation has to emerge to make the original innovation viable; for example, high-purity glass became available in 1970 and got laser, invented in 1960, into full play in the form of optic cables. In 1650, the first café was opened by a Lebanese in Britain but was vehemently opposed by bars, tea merchants and other drink providers, to the extent that the then king issued a decree to close it down in 1675 on ‘national security ground’.

 

The uncertainties today are no less daunting than those of yesteryears. For Wechat, TikTok and Huawei to truly go global, what to surmount has nothing to do with technology and much to do with institutions, cultures and values.

 

Innovation is getting harder. Entrepreneurship holds a special place in overcoming the challenges. Prof. Zhang elaborated on the discrepancies between entrepreneurial decision making and ordinary decision making. The former isn’t a scientific one; rather than simply based on data, entrepreneurs must rely on imagination and judgement to see the unseen. Among corporate decisions, 95% are management in nature and 5% are entrepreneurial. Moreover, entrepreneurial decision making is not about seeking answers to given constraints, but about transforming the constraints per se. If they fail to create the desired conditions, they risk being labeled a liar. Elon Musk has been on verge of such a disgrace for several times. In addition, an entrepreneur doesn’t just set out to make money – which is but one of the criteria for proving his ideas. Prof. Zhang called on the entrepreneurs to make something of value for the consumers, society and country. One must always bear in mind that the market is the ultimate litmus test, he said.