New MIT Sloan “China Lab” to boost entrepreneurism in China

Prof. Yasheng Huang puts development research into practice

CAMBRIDGE, Mass., Nov 30, 2007 — Putting into practice some of the proposals he has tried but failed to get the Chinese government to adopt, MIT Sloan School of Management Prof. Yasheng Huang is developing “China Lab,” a new program that partners MIT Sloan MBAs, Chinese business students, and small entrepreneurs in China to strengthen the firms while providing the MBAs with actual experience not available in a classroom.

“Most people look at a country such as China by just studying a very narrow set of data, such as GDP growth,” said Huang, whose recent research focuses on private sector development in China and India. “Just looking at data doesn't tell the true dynamics of a place and an economy.” So Huang, in collaboration with MIT-China Management Education Project, sought a fresh way to help students learn through direct experience.

“Exchange programs are fine, but we thought we could do better by situating our students in a real business environment where they could learn, while also being helpful to some local businesses,” said Huang. The result is “China Lab,” which will send its first group of 24 MBAs to China in March. In China, the MIT students will connect with business students at the four Chinese universities affiliated with the MIT-China program. Working in combined teams, the MIT Sloan and Chinese students will divide into separate groups, each spending a week working with a small, young Chinese company.

“Our students can offer their knowledge to local entrepreneurs, who may have not been exposed to such information that may enable them to sell in the U.S. market or move to the next stage of their development or to perhaps launch new R&D projects,” said Huang, who added that the inspiration for China Lab came from research for his new book, Capitalism with Chinese Characteristics (Cambridge 2008). “Chinese businesses can learn how our MBAs think about and approach business issues.”

Upon returning from China to their Cambridge campus, the MIT Sloan students will take a course taught by Huang about business and economic issues in China and India. But rather than a typical academic paper, “the students will write a deliverable for the business they visited,” said Huang. “It may be a finance plan, or a marketing proposal— anything they agreed upon during the visit.”

At the same time, students from the four Chinese universities will come to MIT Sloan, where they will take courses and meet with Boston-area businesses.

For Huang, the new China Lab program puts into practice some of the issues and themes at the core of his research and writing. “I have always been interested in ways to help local entrepreneurs in China, as opposed to foreign companies operating there. For many North American business schools, the emphasis has been on General Motors or Microsoft or other companies with massive investments in China. That's fine, but the real economic agent of change is not GM or Microsoft. Local entrepreneurship is far more important in influencing the economic direction of countries such as China and India.”

Huang has proposed that the Chinese government offer more support to such local firms, but with little success. “In a small, small way, I am trying to counteract the ineffective and inefficient policies of the government, which doesn't support these entrepreneurs,”” he said. “I want our students to see beyond the major companies and the skyscrapers of China.” Beyond that, Huang hopes to create a similar program in India.

“My long-run vision is to create a platform for students from both India and China so that they can leverage their business skills to help local entrepreneurs in each country, while learning from each other,” he said.

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