Being the Leader of Value with the Courage of Disruptive Innovation

       Zhu Yicai remarked that, under the guidance of the Third Plenary of the 18th CPC Central Committee, state-owned enterprises, private enterprises, and foreign enterprises should compose new chapters together, and private enterprises should make greater contributions. The other day, some news reported that, Yurun Group planned to establish a private bank. For this, Zhu Yicai said that, Yurun had filed an application together with several partners.

       “Chinese enterprises are ‘followers of value’, but not ‘leaders of value’. To be a leader of value, we should first have the concept of scientific and advanced value, and secondly, the innovation of business mode. China’s private enterprises should transform from a follower to a leader of value.”

       Yesterday morning (Nov. 29, 2013), at the 3rd China Listed Company Leaders Summit, Zhu Yicai, chairman of the board of directors of Yurun Group, gave a speech of “The Main Line Surrounding the Coordinated Development of Capital Market and Real Economy”, and accepted the exclusive interview of the Chengdu Business Daily reporter. Zhu Yicai said, “Under the guidance of the overall reform deepening route chart plotted by the Third Plenary of the 18th CPC Central Committee, the ‘upgraded version’ of China’s economy would be supported by reform bonus, domestic demand potential, and innovation energy, state-owned enterprises, private enterprises, and foreign enterprises should compose new chapters together, and private enterprises should make greater contributions.” The other day, some news reported that, Yurun Group planned to establish a private bank. For this, Zhu Yicai said that, Yurun had filed an application together with several partners.

 

“Glass Door” Phenomenon in Private Enterprises’ Development Will Possibly Be Eradicated.

       Zhu Yicai said, “After China’s economy steps from the original hyperactive phase of high growth into the stable growth period of shift transition, and the market rises from the fundamental status to the decisive status the explosive energy of private enterprises will show an unprecedented impetus for development.”

       He considered that, under the new situation of interaction between top-level design and grass-roots energy, private enterprises in the country will usher in three new opportunities for development:

       The first is the new opportunity in terms of system environment for the development of the private economy. Zhu Yicai said that, over the past 35 years since the reform and opening to the outside world, China had more than 10 million private enterprises, and private capital accounted for more than 60% of the total social capital, but the phenomena like “glass door” and “ceiling” always exist in the development of the private economy. The Decision of the Third Plenary of the 18th CPC Central Committee strengthened such concepts as equal right, equal opportunity, and equal rule of the non-public owned and public owned economy, truly making the private enterprises usher in a new era of system environment.

       The second is the new opportunity for deepening and enhancing the concept of the socialist market economy. He considered that, the Third Plenary of the 18th CPC Central Committee pushed China’s market economy to the intermediate and advanced stage, popularized and enhanced the value concept of modern market economy at all levels of the society, and further revealed the basic characteristics of “social people”. Under such a situation, the whole society’s identification with the private economy would be further strengthened, and the private enterprises would earn greater respect and support of the society.

       The third is the new opportunity brought about by economic transformation & upgrading and commercial reform. He told reporters that, for economic transformation and upgrading, whether it be an adjustment of the economic structure, or a construction of the new industrial system and overall integration of ecological civilization construction, we should develop the real economy vigorously. Promoting the reform of enterprises’ business mode will bring about great business opportunities. As the most animated market subject, private enterprises could completely grasp the decisive occasion and expand the space for new development by dint of advanced operation philosophy and business mode.

 

Transforming from Follower to Leader of Value for Upgrading and Breakout

       Are private enterprises ready in face of such an opportunity? How should Chinese private enterprises realize a breakout by utilizing this opportunity?

       Zhu Yicai said, “It’s impossible to give an answer now, and I will just mention my thoughts on strategic direction and target location, which can be summarized in three key phrases, namely, innovation ability, responsibility undertaking, and value guiding.”

       The so-called innovation ability is just that, private enterprises should cultivate sustainable innovation ability from a strategic height. Generally speaking, the group of private enterprises having ultra-strong innovation-driven development ability is to be further expanded, and there are few enterprises which can stand at the front of the international society and represent national competitiveness, and even fewer enterprises which have the ability to integrate global innovation resources. “I think, large private enterprises have natural advantages in terms of system, mechanism, power, and ability, and shall further exert such advantages and demonstrative driving effect in the new system environment.”

       In terms of responsibility undertaking, “the social responsibility of private enterprises is mainly embodied in economy, society, culture and ecological civilization construction.”

       In terms of value guiding, private enterprises should have the courage to be a value leader in the strategic action of economic transformation and upgrading. Zhu Yicai considered that, the greatest difference between enterprises in China and those in developed countries was that, Chinese enterprises were “followers of value”, but not “leaders of value”. To be a value leader, we should firstly have scientific and advanced value concept, and secondly, the innovation of business mode, and this had been proved by the success of Microsoft, Apple, and Google. To transform from a follower to a leader of value, China’s private enterprises must have the courage of disruptive innovation and ultrastrong strategic foresight.

       “As seen from the future trend, I think that, for value leading, private enterprises may realize a breakthrough in the following two aspects: the first is the development mode of real economy, and the second is the constant pursuit of perfect product manufacturing and service.” Zhu Yicai considered that, even though we were confronted with many challenges brought about by decelerated development of real economy, responsible private enterprises must hold fast to industry and expand the real economy. Only when the real economy became powerful could the capital market have the foundation for sustainable development; similarly, a stable return from the capital injected into the real economy could accelerate the transformation and upgrading of the industry and economy. (Source: National Business Daily)

 

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