The average lifespan of China's conglomerates is 7 or 8 years, and the average lifespan of small businesses is 2.9 years, with nearly 1 million businesses closing down each year.
Liu Xingguo, a researcher at the research department of the China Enterprise Confederation, published an article in the Economic Daily in 2016, "Why is the average life expectancy of Chinese enterprises short", a sample survey showed that the average life expectancy of private enterprises in China is only 3.7 years, the average life expectancy of small and medium-sized enterprises (SMEs) is only 2.5 years; and in the United States and Japan, the average life expectancy of SMEs is 8.2 years, 12.5 years respectively.
Additionally in 2012, "China's small and medium-sized human resource management white paper" published data, China's small and medium-sized enterprises, the average life expectancy of only 2.5 years, the average life expectancy of the group enterprise is only 7, 8 years. And there was an article in the Fuzhou Evening News in 2014, "Statistics say life expectancy of China's small and micro enterprises is less than 3 years," which said that the average life expectancy of China's SMEs is only 3.7 years, with small and micro enterprises having less than 3 years.
Expanded Information
From within the enterprise, subjective factors from the enterprise and entrepreneurial level have determined that it is difficult for China's enterprises to cross the bottleneck of growth and realize sustainable development.
On the one hand, compared with Europe and the United States, China's entrepreneurs have inherent disadvantages and deficiencies: Europe and the United States of America's higher education popularization is significantly higher than in China, entrepreneurs' cultural quality is generally higher than that of our country, and Europe and the United States of America's entrepreneurship education system is developed, the university generally open entrepreneurship education courses, and our country in recent years only began to pay attention to entrepreneurship education;
Europe and the United States of America's application-oriented universities accounted for
Applied universities in Europe and the United States account for 80% of the total, and are committed to cultivating technical talents with practical ability, while China's university education is generally blindly pursuing academic talent training, and most of the university graduates are neither proficient in academics nor good at application, and it is difficult to effectively combine what they have learned with entrepreneurial practice;
Entrepreneurs should be a group of risk enthusiasts who are able to cope with uncertainty through continuous innovation, but a large proportion of our entrepreneurs do not respect the spirit of entrepreneurship. However, a large part of our entrepreneurs do not respect the entrepreneurial spirit, but are impatient, trying to get rich overnight, it is difficult to expect them to lead the enterprise to achieve sustainable development.
On the other hand, the lack of self-growth ability of China's start-ups is not enough to support the sustainable development of enterprises: China's start-ups are heavily concentrated in the fields of catering, wholesale and retail services, and low-end consumer goods manufacturing, which are characterized by low thresholds, fierce competition, and fast-changing demand, making it difficult for entrepreneurs to create differentiated advantages for long-term development;
Continuous innovation is an inevitable requirement for the competition of the current enterprises, but China's SMEs are generally lacking in the ability to create new business opportunities. However, China's small and medium-sized enterprises (SMEs) generally lack a sense of innovation and are unwilling to invest in innovation and equipment renovation, so the added value of their products and services is low, profitability is limited, and it is difficult for them to realize sustainable development through self-accumulation.
From the external viewpoint of enterprises, the imperfect enterprise development environment is the external cause that hinders the sustainable growth of China's newly created enterprises. Over the past 30 years of reform and opening up, China's political and economic system reforms have made outstanding achievements, and the external environment for enterprise development has improved considerably compared with the past, but there is still a gap with the requirements of a mature market economy.
Financing is difficult and expensive, is a major problem faced by China's small and medium-sized enterprises, only a small number of small and medium-sized enterprises can successfully obtain credit support from the bank, and the cost of financing is significantly higher than the bank's benchmark interest rate, part of the small and micro-enterprises of the integrated cost of financing is even more than 20%.
A large number of SMEs have died not from fierce competition, but from the drag of high financing costs, and the outbreak of "bridge" costs and interconnected mutual insurance risk has further pushed up the mortality rate of SMEs. Some fast-expanding start-ups, unable to get timely financing support, have died unexpectedly due to a break in the capital chain.
People's Daily Online - Liu Xingguo: Why the average lifespan of Chinese companies is short