When the world's most famous venture capitalist speaks, people listen.
And right now, John Doerr is talking about entrepreneurship in China.
Recently I found myself, for the second time in so many months, on stage in front of a giant and attentive audience, interviewing Doerr.
The last time was before an association of Indian executives in Silicon Valley. In my column about that event, I focused on Doerr's growing -- and by that I mean hundreds of millions of dollars in investment money -- interest in "Green" technology.
We talked about that on this occasion as well -- to an audience from the Hua Yuan Science and Technology Association, an organization for Chinese professionals in Silicon Valley. I found his comments so interesting and informative – and so full of potential opportunities – that I've not only decided to base this column on my notes, but also (for the first time for me) attach a video selection from the event.
But our main focus this time was another subject dear to Doerr's heart: the emerging technology economy in China.
It hardly needs to be said again, but China is the hottest region in the world right now for new business investment.
And the numbers that support this only grow more impressive: the largest population on Earth (1.3 billion), the fast GDP growth (an average of 9.4 percent per year from 1979-2003; and predictions for 9.8 percent growth this year), the largest manufacturing sector, the largest foreign direct investment ($60 billion last year), and 400 million cell phone users.
Despite this primacy in so many areas, China still has enormous untapped potential.
At $442 billion in 2004, it is still only the world's third-ranked importer. It is third in automobile purchases, second (behind the United States) in Internet usage, and still far back in consumer electronics purchases, communications, banking, health care and energy.
China also has unique cultural advantages, Doerr says.
For example, it has a sophisticated educational system that is pumping out astonishing numbers of new technical graduates: 250,000 engineers per year, as well as 450,000 new IT professionals.
Better yet, in the calculus of competitiveness, all of these professionals are ready to work -- and at comparatively low salaries: The average labor cost in Chinese high-tech corporations is just $500 per month.
But perhaps most important, China, like most ancient cultures, has a deep embedded entrepreneurial spirit. If England was "a nation of shopkeepers," China is the nation where shopkeeping was first invented.
Given all of those traits, and the more relaxed attitude toward capitalism by China's communist regime (at least local), it is not surprising that the Middle Kingdom has become the subject of considerable investment frenzy over the last two decades and why, in Doerr's words, "It's a good time to be a Chinese entrepreneur."
These days China is comparatively awash in venture-capital money. Last year, venture-capital firms in China raised $4 billion, compared with $700 million the year before.
Seventy percent of that money came from foreign investors. And that money is hungry -- according to Doerr, quality Chinese startups these days can expect to have an army of VCs banging on their doors. One Chinese startup that Doerr tracks had 24 venture-capital investment offers in just two months.