Policy push for innovation

The Ministry of Education recently issued a document stipulating that students admitted to universities can apply for a suspension if they start a business. This is a fresh policy to encourage mass entrepreneurship and innovation. However, for the document’s practical and effective implementation, the authorities still have much to do.

Some universities introduced measures encouraging students to temporarily suspend their schooling to start a business more than a decade ago, and there have been a few success stories over the years.

However, according to a report published by MyCOS Research Institute in June 2016, the percentage of self-employed college students in China was only 3 percent, much lower than in the United States.

The low percentage of self-employment among Chinese college students indicates that there is still huge space for promoting business startups.

After decades of fast growth, China’s economy is now in a new normal of slower growth and it is seeking growth driven by endogenous consumption, and innovation rather than exports and investment.

But aside from institutional factors and the deep-rooted notion among some parents and students that a college student should find a government position or a position with a State-owned company after graduation, students’ lack of confidence in their own entrepreneurial abilities is also a factor dampening their desire to start their own businesses. This is a long-term problem in China’s educational system that is more focused on students passing examinations than fostering independent thinking.

To encourage more college students to start businesses, the authorities must first promote educational reforms. Institutional obstacles should be removed and as much support as possible should be offered. In this sense, the education authorities’ recent document points to the right direction and it is hoped some workable follow-up details can be formulated.