Avery Martha - The Alibaba way unleashing grassroots entrepreneurship to build the world’s most innovative internet company

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This book is dedicated to two giants in the field: Professor William Baumol for his seminal work on innovation and entrepreneurship, and Professor Edmund Phelps for his contributions to the understanding of the importance of institutions and grassroots dynamism to economic growth and well-being.

I want to thank them for being mentors in my economic research.

by Edmund S. Phelps

by Chen Liang

by Fang Ruonai

by Xiang Songlin

by Dong Youying

by Huang Lingling

by Quan Tao

by Sun Xiaoyu, Xiang Songlin, and Ying Lowrey

Throughout history, China has been a guide to economic progress, in many eras serving as a model for other nationsthough sometimes showing what approaches are best avoided. Now it has returned to its role as a source of guidance and is again achieving domestic progress and offering the promise of future prosperity. The lessons to be learned will surely be useful to China itself because much of its economy has not yet abandoned older and less productive modes of operation and management. This valuable book offers a guide to the activities that will contribute to Chinas success.

However, such a book will also serve as an instrument that benefits China indirectly by enhancing the purchasing power of other countries that are Chinas customers. Here we must remember that impoverished customers are not good customers. It follows that China stands to benefit both directly and indirectly by understanding the economic activities that enhance prosperity.

A key to progress in this direction is the opportunity for encouragement of entrepreneurial activity, within small enterprises and large firms. Both have already made substantial contributions and promise to remain a source of these benefits in the future. These observations may appear to be self-evident, but it is important to bear in mind that entrepreneurs can be relied on to seek to promote their own gains, whether or not the actions adopted are beneficial to other enterprises.

Recent developments in China have shown dramatically how such a society can benefit from the contributions of entrepreneurs and their colleagues in carrying out the activities of a firm. However, they also have provided unfortunate examples in which entrepreneurs put their own well-being ahead of societys welfare. Evidently, the general welfare requires the adoption of incentives that encourage those entrepreneurs whose activities are beneficial, while discouraging others, whose actions conflict with the interests of society.

In China, some of these incentives already have been put to use. In other cases, the orientation of the firms themselves has contributed to achievement of such goals. But there is still more to be learned from the beneficial undertakings of enterprises that are laggards on the road to progress. Indeed, in China and other countries that have experienced substantial growth, some enterprises have explicitly designed their activities to achieve private benefits at the expense of their employees and their customers.

This book focuses on the firms whose activities contribute to the general welfare through the use of innovationboth in producing and in bringing goods and services to the publicthat also multiplies the benefits to society provided by small entrepreneurs. Based on both observed experience and years of research, Professor Lowreys discussion brings out the developments of the recent past that have enhanced the general welfare.

More than that of any other nation, Chinas history entails a story of invention that is unique in its abundance and, thereby, illustrates dramatically how grassroots entrepreneurship can contribute to the general welfareor, in other circumstances, how it can fail to do so. Such contributions clearly offer extraordinary enhancements to economic growth and, thereby, to the general welfare. The analysis offered in this book indicates directions that will enhance both by using innovation to unleash productive grassroots entrepreneurship.