How to Better Understand Economic History -- The Entrepreneurial Spirit of China (1860–2020)

(Background: In 2020, the Museum of Chinese Entrepreneurial Spirit was established. The philosophical core of this museum, and its academic challenge, lies in how to summarize and conclude the essence of Chinese entrepreneurial spirit from 1860 to 2020. What were the generational characteristics? Who were the representative figures? What constituted their personalized entrepreneurial spirit?

The research team was composed of Chinese economists, historians, and management scholars, with Fu Xiaoyong as the project leader. The study was ultimately completed in the form of commentaries on over 100 entrepreneurs. Their spirit is permanently exhibited in the museum. This article is the preface written by Fu Xiaoyong for this research report.

This year marks the 250th anniversary of the founding of the United States. The Rocky Mountain Center holds a greater curiosity to explore the entrepreneurial spirit of the United States and promote it on a wider scale.)

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Economic history is the history of the metabolism of products, services, technologies, and industries. The most critical responsibility of the entrepreneurial spirit is to drive the emergence of new products, new services, new technologies, and new industries. Understanding the entrepreneurial spirit is key to understanding economic history.

The Spanish root of the word “entrepreneur,” “empresa,” means “to discover, to see, to perceive, to recognize, to capture.” The original meaning of “entrepreneur” is “a person who firmly completes arduous and difficult tasks”—in the Middle Ages, these tasks usually referred to war or the construction of great cathedrals. They were able to accomplish this because they possessed “entrepreneurship”—a special self-drive, a “constant thirst to find, discover, create, or determine new goals and new means.” Conventionally, entrepreneur, entrepreneurial talent, and entrepreneurial spirit are used interchangeably.

Adam Smith explained long ago why economies grow: the expansion of the market promotes the deepening of division of labor, the deepening of division of labor promotes technological progress, technological progress promotes economic development, and economic development leads to increased income, which in turn expands the market, creating a cycle. Joseph Schumpeter correctly pointed out that all four of these links are driven by the entrepreneurial spirit. Schumpeter was not the first to propose the concept of the "entrepreneurial spirit," but he profoundly identified its essence: innovation.

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China is one of the commercially earliest wise nations, yet it long remained mired in agrarian civilization. It was not until 1840 that the cannons of industrial civilization knocked on its door. The Opium War was the result of China’s backwardness, not its beginning—as the famous China expert John King Fairbank said, if not opium, it would have been cotton or molasses.

National salvation became the main theme of Chinese history. The first task was “learning to make things,” or technological imitation, historically known as the Self-Strengthening Movement. Who would make them, and how—the entrepreneurial spirit stepped onto the stage of modern Chinese history. The themes of industry and commerce during the Self-Strengthening Movement and the late Qing Dynasty, such as “officials supervising merchants” versus “gentry-run” and “private-run” enterprises; heavy industrialization versus statism; foreign investment versus “compradors”; light industrialization versus liberalism; and upstream resource-based industries versus downstream livelihood-based industries, have continuously reappeared in subsequent Chinese history, even up to the present day.

In the 160 years since 1860, China has experienced three golden ages of entrepreneurial spirit (the Self-Strengthening Movement, the early Republican era, and the Reform and Opening Up period), two periods of heavy industrialization (the Self-Strengthening Movement and the “planned economy”), two periods of light industrialization (the early Republican era and the 1980s), and the “third wave” characterized by information technology. The “fourth wave,” characterized by artificial intelligence, is also imminent.

The entrepreneurial spirit is a scarce resource in any society. Over these 160 years, the five most important factors influencing the configuration of the Chinese entrepreneurial spirit have been: foreign threats, institutions, ideology, technology, and social values. Different periods saw different characteristics of the entrepreneurial spirit; different eras forged different entrepreneurial spirits.

The history of these 160 years also shows that the process of creating commercial value is also the process of creating institutional and ideological value—the entrepreneurial spirit holds significance beyond its purely economic attributes.

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Every list of individuals represents a viewpoint and implies a degree of bias. There are certainly more outstanding entrepreneurial spirits that have been omitted, and there are definitely more commendable characteristics of the entrepreneurial spirit present in the individuals on the list. This list is not a definitive register of merit but rather an introductory guide intended to prompt further study. It strives for accuracy and seeks to inspire the use of the entrepreneurial spirit as a lens through which to understand economic growth, social progress, and modern civilization.