AH Google IO 2014 1.1

Why Google Execs Abandoned Ship for Churning Chinese Waters

August 15, 2014 - Written By Tom Miller

It’s no secret that China is fast on the rise in many areas of industry, but its meteoric rise in the tech industry – Gartner, Inc. expects China’s spending on the tech sector to grow by 38% in the next five years, a spending that was around $324 billion in 2013 – is the one that seems to have gotten the attention of more than a couple of U.S. tech executives. In the last year three Google executives have left for Chinese businesses and the reasons they cite for doing so should cause the U.S. to take note.

Hugo Barra, Andrew Ng, and Jane Penner all worked in very different areas of the Google giant, and all three have their own reasons for leaving, but they do have a couple of reasons in common, too. Among them it would seem two of those things are sheer creative boredom and lack of growth. China is a very fast growing economy, one that dwarfs the U.S. economy in terms of tech investment and growth so it shouldn’t really be a surprise to see some people from one of the largest tech giants in the U.S. looking to China for the possibilities that await there.

For one, China’s college enrollment is around 10% higher than the U.S. worldwide. That means it is much easier to recruit highly educated workers to join your business, something that the U.S. is increasingly having a problem with (in 2012 only 5% of the U.S. workforce was employed in a science, technology, engineering, or mathematics field). Numbers like that might mean the brain drain could continue between the U.S. and other more educated countries.

With higher education comes increased growth, which means increased revenue. And that’s where we get to another reason these three have gone off to mingle with the entrepreneurs in China: a greater ability to help grow an already thriving business into one with a stellar stream of capital. More capital leads to more investment in innovation, made easier by the waves of grey matter coming into your business with no need to even relocate. It also helps that the hardware you need to supply your business happens to be manufactured in the very same country, greatly lessening the amount of time required in building your arsenal of number crunchers. In addition, the income per capita in China has tripled over the last eight years. People have lots of money to spend on reinvestment, research, and development.

The last reason we’ll discuss for leaving Google has to do with the part that is probably closest to the hearts of those involved. Whether it is Hugo Barra, who went to Xiaomi to do more creative things with Android (he was recently quoted as saying he was “blown away by what they were doing” with Android), or Andrew Ng, who left to join Baidu to join their intensive research in AI (Baidu invests heavily in deep learning to improve AI), the common thread is that those companies see the wisdom in spending lots of money and time on projects that can do great things, and these newcomers like the freedom that comes along with that openness to cutting edge research. It gives them more time to do what they love. To some, that creative freedom is part of what the American Dream is about. That, and the accumulation of wealth, of course.

China certainly has its shortcomings, but it seems those aren’t enough to keep these ambitious minds from sailing toward the fast moving waters of the Chinese tech industry and it seems the U.S. should take note of the gains China has made and do some targeted reinvestment of its own.