This article is excerpted from Professor Cheng Hong’s column on December 22, “Secret of Innovation in Stanford University”, published in China Business News.
Nowadays, “innovation” is widely discussed in China, no doubt an exciting and prospective top word. For many people, innovation is good but more or less unattainable. Serving as visiting professor in Stanford University, I found that “innovation” is a thing that everyone can do.
On December 5, a seminar was held on China Employer-Employee Survey (CEES), led by Wuhan University, at Stanford University where experts made in-depth discussion on the development trend of China’s manufacturing industry. This seminar was chaired by Professor Takeo Hoshi, the first scholar proposing the concept of “zombie firm” in the world. In 2008, Professor Takeo Hoshi studied the long-term existence of a large number of non-profit firms in Japan, and concluded from the analysis that the survival of the zombie firms was owing to their access to the government’s financial and tax subsidies. He published in the "American Economic Review" published a paper “Zombie Lending and Depressed Restructuring in Japan” in the American Economic Review. Currently, based on CEES data, we have been working with Professor Takeo Hoshi on the phenomenon of zombie firms in China.
Stanford University’s innovative thinking is embodied in all aspects, and one of the very common phenomena is its mechanism and habit of discussing anytime and anywhere. Innovation is an idea that comes from an instant, and people will communicate and interact based on the idea, so it is possible to generate a new idea, and then put it into action to produce economic or social benefits.
Stanford’s innovation is characterized by its “taking the unusual way”, and they are interested in those seemingly unusual and storytelling phenomena and always maintain a dare and conscious desire to innovate. In the discussion, Stanford experts and scholars are most concerned about what interesting questions we have found based on CEES survey data.
For instance, what factors determine the current labor productivity in China? Is it determined by input factors, including physical capital, human capital and investment in science and technology, or by factors other than input? For example, compared to people’s discussion and interaction, is artificial intelligence more efficient than people? Have the government’s subsidies achieved their desired effects? Why some firms acquiring the government’s high-level subsidies are still weak in their ability to innovate? Why are employees willing to invest human capital on themselves? Why are migrant workers willing to keep regular exercises after a heavy load of work?
These CEES-based problems may not correspond to our well-known theoretical knowledge, but they have aroused the most interest of Stanford scholars because they are key factors in discovering new problems and emerging phenomena.
In my opinions, if someone have stayed in Stanford University long enough, then he cannot be immune to innovation. That is because there is a mechanism of open discussion, as well as a creative way of thinking, that is to search for the abnormal, the unusual and problems that seem contrary to phenomena and common sense, pay attention to the real core, and find out the right solutions to the problems.
At present, innovation is much cry and little wool in China’s universities. A large quantity of research have been conducted but few have obtained expected innovative results. That is because we keep too much on the rails, consider too many things as normal and natural, and are poor in digging out the possible causes and nature behind the abnormal phenomena. Scientific research easily falls into the trap because we often treat “needs” as “natural laws”.
Stanford University becomes one of the world’s most innovative universities just because they adheres to the tradition of “learning-by-doing” open discussion, being practical to seek for truth, breaking the routine to look for the abnormal, and even dare to do subversive thinking in the problems regarded as social normal phenomena. This is the origin of unceasing innovation in Stanford University, which therefore incubated the most innovative region in the world, Silicon Valley.
This is exactly the biggest gap between China’s universities and the world’s top universities, as well as the key reason why a lot of domestic research failed to achieve the expected results of innovation.