In the U.S. and even Europe, smarter people are more likely to found businesses and for their businesses to succeed.
But in China, smarter people are actually less likely to start businesses🧵
But in China, smarter people are actually less likely to start businesses🧵
To be sure, in China, scores on the Gaokao are related to company performance.
The smarter the founder, the more likely the firm is to expand, to get out of its founding province, to become listed on a stock exchange, and so on.
The smarter the founder, the more likely the firm is to expand, to get out of its founding province, to become listed on a stock exchange, and so on.
The smartest kids in a school also produce businesses that are more likely to survive for a long time.
But, the smartest kids are, in general, heading off to work in the government rather than to start businesses.
That's just how China's incentives are set up!
That's just how China's incentives are set up!
The impact of this on Chinese innovation and growth is likely to be stunning, because China's bureaucrats, ministers, and other officials face stunningly bad incentives.
In effect, China is sentencing its most capable to a career in which they'll generally just lie.
In effect, China is sentencing its most capable to a career in which they'll generally just lie.
China's best and brightest are going off to play games, to siphon off funds from the public purse, and, to be sure, to effectively govern, but that talent is wasted because the overhead on what government officials can produce is so low.
We haven't yet seen an innovative China, and I doubt we will either.
Want to learn more? See my latest article: cremieux.xyz/p/chinas-upsid…
Want to learn more? See my latest article: cremieux.xyz/p/chinas-upsid…
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