Culture Matters to Entrepreneurship Policies : Entrepreneurship Policies in the U.S. versus China

CHINA U.S.

CULTURE IS ... Culture is defined as a shared public context or community- specific ideas about truth, goodness, beauty, efficiency, etc. Although individuals have diverse values, behavior, and attitudes, the concept of “culture” captures the common characteristics shared by individuals within a context.

THE CONCEPT OF ENTERPRENEURSHIP exploring new technological possibilities initiative taking organizing and reorganizing social economic mechanisms somewhat risk bearing

ENTERPRENEURSHIP POLICY enhancing and important source to foster entrepreneurship and to develope the economic in the society. The enivornmental forces come from (i.) the private sector (ii.) social aspects including enterpreneurial culture (iii.) the public sector such as macro policies, business policies, and public safety

ENTERPRENEURSHIP POLICY

ENTERPRENEURSHIP POLICY A Global Entrepreneurship Monitor (GEM) survey found out that both the U.S. and china were among the countries with top scores for the effectives of their entrepreneurship policies and the scores for these two countries are very close. The U.S. scored 3.36 and China scored 3.15 1,300 key informants, the participating national experts and entrepreneurs were asked for their opinion as to whether government policies and programs that aimed at supporting new and growing firms in their countries were effective.

Chinese Culture and the U.S. Culture CHINA U.S. - Collective culture - Collective group interest - Social harmony and social uniformity - Individualistic culture - Emphasizes individual achievements and rights - Social pluralism and social chaos Collective vs. individual

Chinese Culture and the U.S. Culture CHINA U.S. High Power distance Accept and welcome authority Seldom express their disagreement Unequal and hierarchical Low Power distance Everyone tends to have a voice People work closely and may consult each other Equal and independent Power Distance : Relationship between the government and people

Chinese Culture and the U.S. Culture CHINA U.S. High uncertainty avoidance Events clearly predictable Have less leeway for negotiation Low uncertainty avoidance Face more uncertainties and ventures More opportunity to negotiate Uncertainty Avoidance : the extent to which societies tolerate ambiguity

Chinese Culture and the U.S. Culture CHINA U.S. High Context v.s. Low Context Expect more of others than participants Communicate less directly with each other Tend to be more ambiguous, abstract, imprecise High expectation among social members Shared information Need to be more direct, explcit, precise, and specific

Chinese Culture and the U.S. Culture Culture matter : every corner of people’s life Culture matter in Social economic societies Culture influences social and economic development including policy formation. Entrepreneurship policies are influenced by social and economic context including history, culture, industrial structure, the current state of entrepreneurial activity, etc. CULTURE is an important force to shape entrepreneurship policy.

Entrepreneurship Policy and Culture Culture matter in Social economic societies Culture influences social and economic development including policy formation. Entrepreneurship policies are influenced by social and economic context including history, culture, industrial structure, the current state of entrepreneurial activity, etc. CULTURE is an important force to shape entrepreneurship policy.

Relationship between government and businesses the entrepreneurial process in China is controlled by the government The entrepreneurial process in China is controlled by the government Government economy Big entry barrier - local protection : “keep one eye looking at the market and the other eye at the mayor” - Confucian hierarchical administration mode and absolute power of the emperor Government play a small role in the development of Entrepreneurship Partner Enterprise or market economy : government intervene only when market appears “failure” Strong concept of equality from history of immigrant country

Importance of leadership and authority Policies only from national leader high power distance and high uncertainty avoidance make the social authority extremely powerful not allow total pluralism yet but globalization are changing China into more pluralistic cultures Policies not only from President low power distance and low uncertainty avoidance - everyone have equally important opinions Pluralism can motivate the growth of entrepreneurial miliu

Rule of Law Lack a sufficient rule of law for good entrepreneurial milieu Homogeneous society with Han culture Many monetary and fiscal policies and rule of law to motivate entrepreneurship and protect fair competition low-context culture, where rules tend to be explained clearly

Small Business or Large Business Focus on large or medium sized enterprise (LMEs) Type2 “Techno-entrepreneurship policy” Group benefits are emphasized more than that of individuals Focus on small business (SBA) Type1 “focuses social inclusion” Market driven economy

CHINA Conclusion High Power Distance Dominance of Government in Business and Entrepreneurship Policy High Context Lack of explicitly written laws for entrepreneurship development Collectiveness Policy focus on LMEs, not the small businesses

U.S. Conclusion Low Power Distance Smaller role of Government Low Context ( by the immigrant culture ) Detailed written laws to regulate Entrepreneurial activities Individualism Small Business extremely important / Entrepreneurship policy focuses on benefiting SMEs

Globalization is transforming the global culture and this change is dramatically affect entrepreneurship. Entrepreneurs have to understand global market mechanism. China’s entrepreneurship policy therefore needs to integrate Western style entrepreneurial milieu and China’s unique culture perspectives. Instead of just following developed economies entrepreneurship development path.

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