I watched an hour long video about the Chinese city of Shenzhen. It is characterized as the Chinese Silicon Valley. Its origin is in manufacturing relatively low value items. Things North America and Western Europe cannot afford to manufacture.
It is an example of comparative advantage. They can prosper relatively by doing things others cannot do economically. But that isn’t what makes it work.
In 1950 Shenzhen was a tiny village just across the water from Hong Kong. If you want entrepreneurial, Hong Kong is not such a bad place to be near. It’s population those seven decades ago was 3,100. Now in 2021 its population is more. 12.6 million. In 1980 it had not reached 60,000. From 1950 growth of 4,000 times the beginning. Twelve doubles and for those who use the rule of 72, a 71 year growth rate of around 12%.
From 1980 it is nearly 14% growth. The first 30 years were laggard. Just 10% growth rate . Compound growth is more than a little non-intuitive.
Sustained growth at high rates happens for a reason. Entrepreneurs. Good ones. The people used their time, their skill, their energy and what little money they could find to make things happen.
Think of the co-ordination need. The infrastructure alone is stunning. They have the third busiest container port and the fourth busiest airport in the country, Think about roads and bridges and sewers and water distribution. Hydro, telephone, hospitals, schools and a dozen more. It is mindboggling.
Could it happen here? Unlikely. I It takes decades to get approval to build a 1,000 house subdivision.
Shouldn’t that make it harder? Apparently not. It happened. The key difference is their central plan, at least in this case, was strategic rather than one that interferes in every step. A point made in the video was, most of the growth is bottom up. Bottom up just gets things done. Micromanagement slows everything to a crawl.
In your own life, amazing things can happen if you “Just do it” The key to that is being directionally accurate. Go somewhere you would like to be. Learn the how on the way.
I am sure the city is not problem free, but dynamic entrepreneurs eat problems for breakfast. The growth rate will slow because the natural resource of space intrudes eventually, but parts of it will just move somewhere else where the circumstances are more suitable.
That’s how it works. Directionally accurate approaches find their own way.
Directionally accurate is how our governments should behave. People don’t need the heavy hand of bureaucracy getting in their way.
You can watch the video on YouTube. – Shenzhen. The Silicon Valley of Hardware.
Bureaucrats control how you do things. Entrepreneurs start with what they want and find the how as they go. The two method are incompatible. How did we ever get on the “How” and “Must not” path?
Make it a thing in 2022. Be directionally accurate with your planning and learn the how. Overthinking and over-controlling are not helpful. Quite the opposite in fact.
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I build strategy and fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, Banks – from CIBC to the Business Development Bank.
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