China, with the rest of the world, needs to learn how to impart 'know-how' rather than 'know-about'

It is almost universally accepted that the transition from a labor-intensive to a knowledge-based economy is the next major milestone on China's road to superpower status. Recognizing the crucial distinction between information and intelligence will be vital to achieving this aim.

With the world more connected than ever before, it is easy to underestimate the scale of the task. A hundred years ago the number of people we could reach simultaneously was determined by our strength of voice. Nowadays an audience of billions can absorb events at the same time. A century ago the mass transfer of the written word necessitated printing, hard-copy distribution and perhaps even translation. Soon the content of every library of every culture could be available in every language almost instantaneously.

Yet facts are genuinely useful only if we know what to do with them. We have to know what they really mean, how they might be applied and how they link and combine to make new facts. All the information on Earth is meaningless unless the recipient can process it. Take, for example, the humble bicycle: we can circulate the specifications for a new design and perhaps even share a video of the optimum assembly method, but what we cannot transfer so simply is the skill of riding. The latter is an example of what the scientist and philosopher Michael Polanyi called "tacit knowing", and it is summed up in his celebrated aphorism: "We know more than we can tell."

Tacit knowing might be succinctly described as the difference between "know-about" and "know-how". We all appreciate that communicating the former is nowadays a matter of mere mouse-clicking. Imparting know-about is far more difficult, and it is a problem absolutely pivotal to the continuation of China's growth story.

In the sphere of business one of the most in-demand qualities is entrepreneurship - the ability to recognize opportunities and to deliver value through invention, innovation and creativity. Entrepreneurship is undoubtedly a tacit skill, one that cannot be digested, memorized, regurgitated in an exam and then all but forgotten. To believe such a gift may be effortlessly learnt from a book or via rapid-fire reference to the Internet is akin to believing a martial artist could attain mastery without the guidance of a shifu (master).

A major challenge for modern educationalists is to effect the transfer of tacit, experience-based skills as well as fact-based knowledge. Nowhere is that challenge likely to be greater or more pressing than in China. There is a widespread fear in the West that China is already an unstoppable hotbed of innovation and, as such, will dominate both our present and our future. Such concern is misplaced. Research by the University of Nottingham, as featured in China Daily on March 9 this year, has exposed this myth by revealing that the patent explosion of the past few years has been fuelled to an overwhelming extent by incremental innovations rather than substantive new technologies. The Dragon is still an imitator, not an innovator.

A recent report by the Chinese Academy of Social Sciences and the MyCOS Research Institute, an education consultancy in Beijing, echoed this pragmatic assessment by showing that the commercial success of numerous well-known Chinese entrepreneurs has done little to encourage young graduates to become their own boss. According to the findings, keenness to start a business is most prevalent among vocational-college graduates; moreover, many young entrepreneurs are based in the less developed central and western areas. The resulting overall impression, as noted in an article in the Wall Street Journal, is that the typical Chinese entrepreneur is a restaurant owner or a pig farmer. Of course, precisely what constitutes an entrepreneur has long been a source of academic debate.

A sizeable proportion of the Western public conceives an entrepreneur as nothing less than a dynamic and hugely successful businesswoman or businessman, very probably one operating in a high-tech sector, as epitomized by Apple's Steve Jobs or Microsoft's Bill Gates. Such a notion is in many ways fanciful. In reality, it is perfectly reasonable to contend that anyone who owns a business, irrespective of its comparative failure or success, is an entrepreneur.

Yet in the case of China, where the need to work with brains as well as hands is viewed as increasingly fundamental to significant progress, the go-getting, deal-doing, pioneering stereotype is arguably much closer to what is actually required. Various academic studies have suggested Chinese students are wont to dismiss creativity as of scant merit and habitually refrain from taking risks. The rote-based nature of China's education system is usually blamed for this unadventurous attitude. Western graduates, by comparison, generally benefit from a more business-focused approach.

However, it is worth pointing out that Western countries are also under pressure to advance the philosophies underpinning their economies by adopting concepts such as radical innovation and entrepreneurship and that their own education systems, like China's, are in large part not ideally geared toward attaining this goal.

Take Britain as an example. Over the past 20 years a growing concentration on short-term financial performance has led British manufacturers to specialize in next-generation products based predominantly on customer feedback - that is, the same kind of incremental innovations that have occasioned China's patenting boom - while the country's universities, on the whole, have set about educating engineers to preserve this uninspired and uninspiring status quo.

This cannot go on in the face of enormous economic and societal challenges that can be met only by embracing a culture of radical innovation. As highlighted in a report by the prestigious Royal Academy of Engineering, quick-fix thinking and systemic myopia must give way to creativity and transformation. In short, Britain has to have an innovation economy: like China, it has to have more thinkers, more risk-takers, more game-changers, more entrepreneurs. So we are united by that much. And we are united by something else: our students, notwithstanding the respective shortcomings of our education systems, possess an innate capacity to become just the sort of people we need.

Research by Nottingham University Business School has repeatedly demonstrated how the ability to identify opportunity - the cognitive capacity that enables individuals to make novel connections and foresee prospects, benefits and advantages within business settings - can be developed in anyone. Background is irrelevant. Regardless of origin or nationality, the students who have taken part in these studies, have exhibited more similarities than differences in how they react to the exercise.

In addition, there is a firm consensus on how this skill, this necessary vision, is most effectively enabled: it is best nurtured through mentoring by practised entrepreneurs and by working in groups. In other words, it demands immersion, action and familiarity. It is a classic case of know-how rather than know-about. The importance of this consideration was paramount when the University of Nottingham Institute for Enterprise and Innovation was established in 1999.

At the institute students are not merely introduced to the principles of entrepreneurship, innovation and creativity: they are also afforded practical experience through work on real-life projects. Engineers are urged to work alongside business, science, social science and humanities students to develop leading-edge inventions that could be taken to market. Students present their ideas to experts in technology transfer and research commercialization, equity investors and intellectual property development professionals. There are modules for undergraduates, postgraduates, MBA students and executives from the public and private sectors.

The Royal Academy of Engineering's report stressed that initiatives such as these must be mainstreamed if Britain is to enjoy economic stability and maintain a notable presence on the global stage. Essentially, know-how has to become an integral part of the curriculum. Clearly, much the same might be said for China, perhaps even more so.

A connected world can just as easily share in failure as it can share in success; and progress, whether in the East or the West, will inevitably stall in the absence of mindsets and environments that foster new ways of thinking and breakthrough technologies. This inescapable truth lies at the heart of the distinction between information and intelligence, and we ignore it at our peril.

It is a precious subtlety that China will have to acknowledge, adapt to and exploit to the full if the dragon's remarkable rise is to be maintained.

The author is a professor of entrepreneurial development and dean at Nottingham University Business School. The views do not necessarily reflect those of China Daily.

(China Daily 10/12/2012 page11)