Book Excerpt: ‘Can China Lead?’

Creativity and innovation can be nurtured in different educational and institutional settings, but does China have a good institutional framework for innovation? An excerpt from Can China Lead?

Can China Lead: Reaching the Limits of Power and Growthbook excerpt

The Importance Of Being Innovative

From Chapter 4, Can China Lead: Reaching the Limits of Power and Growth

By Regina M. Abrami, William C. Kirby, and F. Warren McFarlan

One can surely doubt that creativity can be mandated or that innovation can be planned. Both can, however, be nurtured in different educational and institutional settings. The question, then, is this: does China have a good institutional framework for innovation?

Our answer at present is no: the governance structures of Chinese state-owned enterprises and universities still leave too many decisions to too few, too self-important, people. Chinese universities, like state-owned organizations, are still plagued with party committees, and the university party secretary normally outranks the president. (It should be noted that a few extraordinary party secretaries are key to their university's success, but as a rule this system of parallel governance limits rather than enhances the flow of ideas.) Few party secretaries—like few presidents of American universities—look favorably on the prospect of unbridled faculty governance of universities. But the freedom of faculty to pursue ideas wherever they may lead is a precondition for sustained innovation in universities. By any comparative measure of leading international universities, faculty in Chinese institutions have little role in governance. It was not a good sign when China's vice president (and president-designate) Xi Jinping visited China's leading universities in June 2012 to call for increased party supervision of higher education.

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Deans and presidents everywhere must make decisions and set priorities. In reality, however, many of the best ideas—those that deans and presidents will be compelled to support on their intellectual merits—will come from the mistakenly named "bottom" up, from faculty at the top of their fields. Having an institutional structure to support this is rare anywhere, and in Chinese universities today it is rarer still.

Can world-class universities exist in a politically illiberal system? Perhaps. But perhaps only if they are largely self-governed. German universities in the nineteenth century were subject to much political pressure, but they were the envy of the world in part because they also had traditions of institutional autonomy that fostered and (at times) protected creative thinkers. China's universities today boast superb scholars and among the world's best students. But these students are also forced to sit through courses in Party ideology. They learn a simplified book version of the history of their own country and almost nothing about the historic tragedies of the ruling party. In the realm of politics and history, the disconnect between what students have to learn in order to graduate, and what they know to be true, grows greater every day. This is why, in 2012, when students in Hong Kong were faced with the prospect of enduring "patriotic education" as taught in mainland China, they took to the streets.

Can Chinese universities come to set global standards in the twenty-first century? It is surely possible, simply because of the resources they are likely to have. But here much depends on what happens elsewhere—particularly in the United States, where the great public systems of higher education are in the process of slow-motion self-destruction. The University of California system, once the greatest system of public higher education in the world, has been weakened and made increasingly dysfunctional due to state budget problems. As that great system declines, the leading private universities—the Harvards and Stanfords, for example, which compete with the University of California for faculty and graduate students—may be less challenged and may likely decline as well.

For the moment, American universities still enjoy their hour in the sun as the innovative places to educate leaders. After all, actual Chinese leaders send their kids to American universities, and in increasing numbers. But it is worth recalling that in the 1920s and 1930s, China's paramount leader, Chiang Kai-shek, sent his sons to study in the leading (if quite different) institutions of his day in the Soviet Union (Chiang Ching-kuo) and Germany (Chiang Wei-kuo and Tai An-kuo). Times change. Today there is no shortage of American families who send their children to China. As Chinese universities increase their international offerings, this is a trend to watch.

Perhaps absolute innovation, like absolute leadership and power, is overvalued. In industry as in education, China—like the United States before it—can enjoy for some time what Joseph Schumpeter, the great twentieth-century economist, called the latecomer's advantage: learning from and improving on one's immediate predecessors in a given field. Certainly in business as in education, China has shown innovation through creative adaptation in recent decades, and it now has the capacity to do much more.

Reprinted by permission of Harvard Business Review Press. Excerpted from Can China Lead: Reaching the Limits of Power and Growth. Copyright 2014. Harvard Business School Publishing Corporation. All rights reserved.