Certainly agree on the education part. I'm curious what the gov. thought about rise of ed-tech. The rise of after-school tutorial/online tutorials etc. certainly hints that public education is terrible. Not good for the gov's face. Will the gov. see ed-tech as a threat?
One of the cool patterns I've noticed on Douyin are the rural live-streamers. I watched a Mongolian business owner sell dried beef goods via livestream while playing traditional Mongolian music in the background in rural Inner Mongolia.
Per your essay, I definitely get the "creating economic infrastructure / institutions" framework by strengthening rural economies via livestream tech. It's definitely something I wish the US capitalized on more in its rural areas.
Agree and it's been fascinating watching China's poverty alleviation being partly powered by technology through e-commerce, livestreaming and tourism. Though the upsides to all of this are bounded.
I think the framing of technology platform as institutions is very important for thinking about the kind of growth we're powering.
Lillian, do you know if there is a theory or school of thoughts that focuses around enabling factors rather than leaving them as secondary considerations? In line with your mention of the "one-size-fits all" approach of the IMF, I find there is a similar approach in investing with an obsession on "value". As in, a value-driven approach would look at "Chinese tech" opportunities and assume that the underlying value is based on the same characteristics they share with other non-Chinese tech based companies. Meanwhile, it is those characteristics and the conditions of the market (as you so appropriately point out here) that actually dictate the return on investment. I find this to be such a common point, considering enabling factors as primary factors, that I have to believe there is a school of thought that is built on this.
I haven't come across it though that doesn't mean it doesn't exist - in development we do talk about context specificity a lot but there's not a coherent framework for this.
Let me know if you do come across it, and if not, then maybe I should write one.
Coming back to this comment, it seems that Clayton Christensen's "Jobs to Be Done" theory of market segmentation addresses this point exactly. In his book the Innovators Solution he basically emphasizes that a attribute-based analysis versus a circumstances-based analysis and how understanding the circumstances that drive consumer decisions is a better mechanism for making product decisions - which I would extend to investment decisions as well. Interesting conversation!
Thanks for the insights, but I see there are many "egg and chicken" dilemmas when we try to isolate contexts from phenomena. Many of the factors are interwoven. Since you mentioned in posts that you studied international development. One topic I am always curious about that is relevant to international development is that how the poverty-entrepreneurship relationship plays out in China. I remember research pointed out the only 30% of netizens receive monthly income over RMB 5,000 (around US$ 700). And many of them may originally leaded a modest if not improvised life (sole proprietorships, freelancers, or unemployed).
Some scholars suggest that poverty may induce people's risk-taking behaviors.
Take Livestream E-commerce as an example, the cost of setting up a Livestream is near zero, with the prevalence of broadband networks and mobile phones, the barrier is further lowered. This permits critical mass adoption. And has a higher chance for low-income people to adopt, learn and make profits.
I wonder whether this could be an angle that worth looking into in the future.
All in all, thanks for your insightful coverage. I will definitely follow it.
1. Other than Edtech (love the breakdown there), what other verticals do you see as having particularly unique Chinese characteristics, particularly curious on your thoughts on healthcare
2. In my observations, closing the trust gap seems to differ based on demographics/geography. What are unique mechanisms for closing that in China?
Sorry if these questions are rather vague/open-ended questions, but those are the ones that surface upon an initial read. Thanks. Btw really appreciate the way you lay out your premises and contextualize your arguments, its nuanced.
1.I think every tech vertical has its own unique local characteristics. The most admirable thing about US tech is that it tries to obscure this fact. But European tech knows this well. The list for everything is too long to go through.
2. Blockchains? That's a semi-joke but you're asking essentially how do you democratise trust and I don't think that's a China-specific issue though it is felt more acutely in China.
"technology isn't augmenting existing institutions, but creating them. " this speaks volumes to me. In my Uni days when I took a class on asian tigers, I've always had the presumption that good institutions preceded development (then again it makes sense then given tech's prominence/relevancy in shaping institutions then)
Certainly agree on the education part. I'm curious what the gov. thought about rise of ed-tech. The rise of after-school tutorial/online tutorials etc. certainly hints that public education is terrible. Not good for the gov's face. Will the gov. see ed-tech as a threat?
One of the cool patterns I've noticed on Douyin are the rural live-streamers. I watched a Mongolian business owner sell dried beef goods via livestream while playing traditional Mongolian music in the background in rural Inner Mongolia.
Per your essay, I definitely get the "creating economic infrastructure / institutions" framework by strengthening rural economies via livestream tech. It's definitely something I wish the US capitalized on more in its rural areas.
Agree and it's been fascinating watching China's poverty alleviation being partly powered by technology through e-commerce, livestreaming and tourism. Though the upsides to all of this are bounded.
I think the framing of technology platform as institutions is very important for thinking about the kind of growth we're powering.
seriously some great stuff. can we get a preview of what the paid content might look like? i'm very certain i'd pay.
Sure - if you did the survey and got the 2021 predictions that's a premium subscriber article
Lillian, do you know if there is a theory or school of thoughts that focuses around enabling factors rather than leaving them as secondary considerations? In line with your mention of the "one-size-fits all" approach of the IMF, I find there is a similar approach in investing with an obsession on "value". As in, a value-driven approach would look at "Chinese tech" opportunities and assume that the underlying value is based on the same characteristics they share with other non-Chinese tech based companies. Meanwhile, it is those characteristics and the conditions of the market (as you so appropriately point out here) that actually dictate the return on investment. I find this to be such a common point, considering enabling factors as primary factors, that I have to believe there is a school of thought that is built on this.
Great read!
I haven't come across it though that doesn't mean it doesn't exist - in development we do talk about context specificity a lot but there's not a coherent framework for this.
Let me know if you do come across it, and if not, then maybe I should write one.
Coming back to this comment, it seems that Clayton Christensen's "Jobs to Be Done" theory of market segmentation addresses this point exactly. In his book the Innovators Solution he basically emphasizes that a attribute-based analysis versus a circumstances-based analysis and how understanding the circumstances that drive consumer decisions is a better mechanism for making product decisions - which I would extend to investment decisions as well. Interesting conversation!
Thanks for the insights, but I see there are many "egg and chicken" dilemmas when we try to isolate contexts from phenomena. Many of the factors are interwoven. Since you mentioned in posts that you studied international development. One topic I am always curious about that is relevant to international development is that how the poverty-entrepreneurship relationship plays out in China. I remember research pointed out the only 30% of netizens receive monthly income over RMB 5,000 (around US$ 700). And many of them may originally leaded a modest if not improvised life (sole proprietorships, freelancers, or unemployed).
Some scholars suggest that poverty may induce people's risk-taking behaviors.
Take Livestream E-commerce as an example, the cost of setting up a Livestream is near zero, with the prevalence of broadband networks and mobile phones, the barrier is further lowered. This permits critical mass adoption. And has a higher chance for low-income people to adopt, learn and make profits.
I wonder whether this could be an angle that worth looking into in the future.
All in all, thanks for your insightful coverage. I will definitely follow it.
Another sound article. Two questions:
1. Other than Edtech (love the breakdown there), what other verticals do you see as having particularly unique Chinese characteristics, particularly curious on your thoughts on healthcare
2. In my observations, closing the trust gap seems to differ based on demographics/geography. What are unique mechanisms for closing that in China?
Sorry if these questions are rather vague/open-ended questions, but those are the ones that surface upon an initial read. Thanks. Btw really appreciate the way you lay out your premises and contextualize your arguments, its nuanced.
1.I think every tech vertical has its own unique local characteristics. The most admirable thing about US tech is that it tries to obscure this fact. But European tech knows this well. The list for everything is too long to go through.
2. Blockchains? That's a semi-joke but you're asking essentially how do you democratise trust and I don't think that's a China-specific issue though it is felt more acutely in China.
"technology isn't augmenting existing institutions, but creating them. " this speaks volumes to me. In my Uni days when I took a class on asian tigers, I've always had the presumption that good institutions preceded development (then again it makes sense then given tech's prominence/relevancy in shaping institutions then)