Entrepreneurship embodies patriotism, innovation, integrity, social responsibility, and global vision. Photo: TUCHONG

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Cultivating and promoting entrepreneurship is an important aspect of economic practice and theory in the new era. Entrepreneurship is closely related to the operation of the entire market mechanism and is the most important production factor for modern economic development. It is the key factor in integrating production factors into socialized mass production, fostering creativity and productivity, which determines the production function of each enterprise.

Innovation in uncertainty

The market economy is a mechanism in which multiple market entities make decentralized decisions under the guidance of value laws. Since the Industrial Revolution, enterprises have been the most important microeconomic entities. Entrepreneurs, driven by entrepreneurship, must make decisions in uncertainty, seize market opportunities through innovation, and seek ways to survive and thrive. It can be said that entrepreneurship is closely related to the operation of the entire market mechanism, is the most important production factor for modern economic development, and is the soul of the market economy.

Entrepreneurs are decision-makers in the face of uncertainty. This uncertainty includes both internal uncertainty within the firm and external uncertainty from environmental, political, military, macroeconomic, and other aspects. Those with an entrepreneurial spirit should grasp, judge, and manage uncertainty, and excel at making decisions within this context. Entrepreneurs need to bear variable and uncertain benefits. The most important quality for entrepreneurs is an ability to face uncertainty and actively respond to it.

Innovation is the fundamental support for sustainable development of enterprises and an important manifestation of entrepreneurship. Innovation primarily encompasses two dimensions: technological innovation and economic innovation. In his book The Theory of Economic Development, Joseph A. Schumpeter (1883–1950) defined innovation from an economic perspective as the establishment of a new production function, the introduction of a new combination of production factors and conditions into the production system, and the recombination of production factors or conditions. Entrepreneurs are innovators engaged in creative destruction.

Entrepreneurs are adept at discovering and seizing market opportunities amidst uncertainty. The actual market is often in an unbalanced state, offering opportunities for profits. Seizing these opportunities can drive the market toward equilibrium. This requires entrepreneurs to possess the ability to keenly recognize previously unidentified opportunities and anticipate market demand.

Social vitality

Over the past 40 years of reform and opening up, China has gradually established and continuously improved a high-level socialist market economy system, with the market system and market entities experiencing continuous vigorous growth. Entrepreneurship in the new era should be grounded in five dimensions: patriotism, innovation, integrity, social responsibility, and global vision.

As an important participant in economic activities, enterprises are the driving force and source of sustainable economic development. In the era of the digital economy, driven by innovation, the role of entrepreneurs in effectively integrating basic research with applied research cannot be overlooked. Economic research has demonstrated that the outcomes of basic research do not translate directly into economic growth. It is only through the application of new technologies and inventions to socialized large-scale production that economies of scale can be realized, thereby promoting economic growth. This application process hinges not only on the physical organization of the enterprise, but also on entrepreneurs who lead the enterprise in transforming new knowledge and technologies into products and services that match consumer needs. Labor, capital, and technology are important factors for economic growth, and their organic combination embodies the acumen of entrepreneurs, namely entrepreneurship.

Entrepreneurs are the main force driving the construction of China’s socialist market economy. In the early stages of reform and opening up, local entrepreneurs, known for their daring to think and take risks, saw the opportunities brought about by market-oriented reforms and vigorously promoted the industrialization drive. In the 1990s, a group of entrepreneurs with higher cultural literacy, emerging from the public sector, furnished successful practical cases for the exploration and improvement of the socialist market economy system. In the 21st century, with the rapid development of modern information technology, a large number of private internet enterprises fearlessly innovate, explore new technologies and markets, and cultivate unique Chinese brands and corporate culture within the wave of economic globalization, laying a solid foundation for the rapid growth of the Chinese economy.

Entrepreneurial enterprises, characterized by their strategic emerging technologies, have emerged as an important force in promoting high-quality economic development in China, further expanding their global vision. Rooted in the physical industry, from low-tech and low-capital industries such as catering and labor services, to the new era’s internet industry, enterprises are constantly growing, optimizing, and strengthening. As the mainstay of the national innovation system, they have become the “primary engine” of innovative development, providing robust support for high-quality development.

Rule of law

Cultivating and promoting entrepreneurship ultimately relies on the rule of law. The market economy is inevitably an economy observing the rule of law, and enterprises and entrepreneurs, as the primary entities of the market economy, naturally constitute the mainstay of a nation based on the rule of law. Protecting the property rights of private enterprises and the rights and interests of entrepreneurs in accordance with the law is conducive to unleashing the nation’s entrepreneurial potential. The improvement of the legal regulatory system provides the institutional infrastructure for corporate governance, ensuring the healthy and stable development of private enterprises.

From a macro governance perspective, stable legal systems such as property rights and a pro-business environment are the foundation for safeguarding entrepreneurship. From a micro governance perspective, the focus lies in inspiring the spirit of entrepreneurs oriented towards economy under the rule of law. The rule of law has become a crucial influencing factor in corporate decision-making, and the spirit of the rule of law is becoming an important component of entrepreneurship.

Entrepreneurship is the basis for building world-class enterprises, the key to implementing the innovation-driven strategy, and a vital force for advancing Chinese modernization.

Xiong Jinwu is a professor from the Business School at China University of Political Science and Law.

Edited by ZHAO YUAN