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at the time. In 2012 23.9 million students
attended institutions of higher learning in
China—some 4 million more than the enrollment at U.S. colleges and universities.
Private colleges and universities now account for more than a quarter of all higher
education institutions in China, and they
are growing at a faster rate than public ones.
Large companies are also getting involved.
Alibaba’s Taobao unit, for instance, has established Taobao University, initially to train
e-business owners, managers, and salespeople. In time it will offer business education to more than a million online students.
China will soon turn out more PhDs
each year than any other country in the
world, as Chinese universities aim to be
cradles of high-level, creative research and
forces capable of transforming research
and innovation into higher productivity.
The Chinese government and many other
sources are pumping enormous revenues
into the leading institutions. Within 10
years, the research budgets of China’s elite
universities will approach those of their U.S.
and European peers. And in engineering
and science, Chinese universities will be
among the world’s leaders.
Will Chinese universities set global
standards in the 21st century? It is possible (even though none currently ranks
in the global top 50) simply because of the
resources they are likely to have. But the
more important question is whether China
has a good institutional framework for
innovation.
Our answer at present is no. The governance structures of China’s state-owned
universities still leave too many decisions
to too few, too self-important, people.
Chinese universities, like state-owned
enterprises, are plagued with party committees, and the university party secretary
normally outranks the president. While
a few extraordinary party secretaries are
central to their universities’ success, as a
rule this system of parallel governance limits rather than enhances the flow of ideas.
The freedom to pursue ideas wherever
they may lead is a precondition for innovation in universities. But by any comparative
measure, faculty members in Chinese institutions have little or no role in governance.
Indeed, it was not a good sign when China’s
then–vice president (now president), Xi
Jinping, visited China’s leading universities in June 2012 to call for increased party
supervision of higher education.
PERHAPS ABSOLUTE innovation, like absolute leadership and power, is overvalued.
In industry, as in education, China can enjoy for some time what Joseph Schumpeter
called the latecomer’s advantage: the ability to learn from and improve on the work
of one’s immediate predecessors.
Certainly, China has shown innovation
through creative adaptation in recent decades, and it now has the capacity to do
much more. But can China lead? Will the
Chinese state have the wisdom to lighten
up and the patience to allow the full emer-
gence of what Schumpeter called the true
spirit of entrepreneurship? On this we have
our doubts.
The problem, we think, is not the innovative or intellectual capacity of the
Chinese people, which is boundless, but
the political world in which their schools,
universities, and businesses need to operate, which is very much bounded.
HBR Reprint R1403J
Regina M. Abrami is a senior fellow at the
Wharton School, the director of the Global
Program at the Lauder Institute, and a senior
lecturer in political science at the University of
Pennsylvania. William C. Kirby is the Spangler
Family Professor of Business Administration at
Harvard Business School and the T.M. Chang
Professor of China Studies at Harvard University.
F. Warren McFarlan is the Baker Foundation
Professor and the Albert H. Gordon Professor of
Business Administration, Emeritus, at Harvard
Business School. They are the authors of Can
China Lead? Reaching the Limits of Power and
Growth (Harvard Business Review Press, 2014).
Words
to the
Wise
Harvard
Business
Review
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