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Business / Economy

Digital economy to be new engine of growth

By He Yini (chinadaily.com.cn) Updated: 2016-09-09 15:22

Digital technologies are changing the game of doing business by increasingly penetrating into consumer markets, business models and decision-making in large and small companies alike across the world.

It begs a question for young entrepreneurs, though, of how to survive and scale up their businesses in a disruptive age, as they are often lack funds and experience, among others.

This is especially true in China. Statistics show more than 30,000 startups are emerging on a daily basis in the country, a number that's expected to grow with the massive push for policies to support innovation and economic transformation.

"Policy can play a critical role in turning digital disruption into a powerful opportunity for young entrepreneurs," said Rohan Malik, strategic growth leader of global industry in Ernst & Young, on Thursday.

It's very important to create an entrepreneurial environment that encourages young people to establish, grow and scale their businesses, he said during a news release of the company's latest report on digital economy.

Meanwhile, access to funds and mentorship on management, among other factors, are crucial for a new company to survive and maintain a business, but also the biggest challenge in the first year or two, said Malik, citing the report.

According to the report, for high-performing young Chinese entrepreneurs, their approaches to operations management are shifting – from relying on personal experiences to adopting innovative management models that focus on digital technologies, big data analytics and applications.

China has rolled out a slew of measures to boost mass entrepreneurship and innovation, a program initiated in 2014, to reinvigorate the slowing economy by encouraging more people to start their own businesses and unleash their innovation potential.

The latest guidelines were issued on Sept 1 at the State Council's executive meeting presided over by Premier Li Keqiang, in a bid to ensure the healthier and more sustainable development of venture capital that underpins the growth of small businesses and new innovation-driven engines, including the digital economy.

"Venture capital can finance small business startups that have promising markets. Promoting the form can boost economic vitality and help create more opportunities for employment," Huang Qunhui, director of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, was quoted as saying in an earlier China Daily report.

According to the National Development and Reform Commission, the number of newly registered enterprises exceeded 2.62 million in the first half of 2016, up 28.6 percent from last year.

"Start-ups need to improve their own comprehensive competitiveness in order to reduce the risks for investors. Good projects and good companies will see no shortage of funding," said Benson Ng, an advisory partner of Ernst &Young Advisory Services Ltd.

During the 13th Five-Year Plan period (2016-20), enterprises in China and around the world will see more strategic opportunities arising from the implementation of policies to encourage innovation and entrepreneurship, he said.

Digital, which equals inclusive growth, is the new way the government should do business, said Malik. "The future is bright. Young entrepreneurs should seize the time and take the initiative to innovate."

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