Why is it so hard for college graduates to start businesses in rural areas? Poor infrastructure and lack of funds
At the age of 29, amid the incomprehension and mockery of relatives and friends, Liu Zhenhua turned his life in a completely different direction. This former Suzhou white-collar worker, who had once “leaped over the dragon gate,” returned to his rural hometown in Heze, Shandong, and began a entrepreneurial career growing fruit and vegetable greenhouses.
What he devoted himself to was precisely the land on which his parents' generation had grown “poorer the more they farmed.” Through arduous cultivation and investment in science and technology, he reaped from this land surprises his parents' generation had never known: in the first half of 2014 alone, he made a profit of nearly 200,000 yuan. In his long-term plan, one can also see fully automated seedling greenhouses and the ever-expanding scale of the cooperative.
From graduating from university to steadily embarking on the path of rural entrepreneurship, Liu Zhenhua spent a full 6 years. To return or not to return? How difficult is this entrepreneurial path to walk? As the difficulty of college graduates finding employment, as a hotly debated topic, impacts the public eye year after year, these questions have begun to attract the attention of more college students.
On August 30 of this year, Shandong's first research report on the current state of rural entrepreneurship among college students was released. The report was completed by Shen Zhao, secretary of the Youth League General Branch of the Business School of Shandong Jianzhu University, together with 197 student volunteers. “The deepest impression the research gave me is that, compared with the relatively mature and relaxed entrepreneurial environment in cities, the situation for college students starting businesses in rural areas is even more severe. Apart from policy and institutional factors, traditional social prejudice, backward rural infrastructure, and uncontrollable climate all invisibly increase the hardship and difficulty of entrepreneurship.” Shen Zhao said.
67.12% of fresh graduates have the intention to start businesses in rural areas, but only 6.85% put it into practice
This survey lasted two months and covered the current situation of university graduates who have already started businesses in rural areas across 17 cities in Shandong, as well as the willingness and awareness of college students currently enrolled in agriculture-related and business majors across the province to start businesses in rural areas. Data collection combined questionnaire surveys and interview records: 4,943 questionnaires were distributed, 4,651 were collected, and 4,543 were valid; 743 people were interviewed, with respondents spread across 50 agriculture-related counties.
The impetus for this survey was inseparable from the growth journey of a student club.
In 2010, Shen Zhao guided students to establish a club named “Yizong,” relying on the Business School's curriculum model, aiming to train farmer brokers and ignite the spark of rural entrepreneurship. Over 4 years, the club trained more than 200 student brokers, 80% of whom came from rural areas. The students gave full play to their professional advantages and many times helped farmers around Jinan sell unsalable agricultural products.
At graduation, Shen Zhao was surprised to find that only two students chose to return to rural areas to start businesses. “At that time I especially wanted to know, what are the students' real thoughts? What factors restricted their choices?”
In the survey of 2014 fresh graduates, students who had plans to start businesses in rural areas accounted for 67.12%, while those who were already prepared and had done so accounted for only 6.85%. As for under what circumstances they would choose to start businesses in rural areas, 47.21% of students said they needed to “discover a clear new business opportunity.” This means that most graduates' willingness to start businesses in rural areas has not yet truly been put into practice.
Among the college students willing to start businesses, nearly 70% had some understanding of rural entrepreneurship, but only 2.56% could be considered very knowledgeable about it.
In addition to low awareness of relevant policies, some cognitive biases clearly hinder the entrepreneurial choices of enrolled college students. The survey results for enrolled college students showed that the main obstacle to rural entrepreneurship was considered to be lack of experience and lack of social connections (43.58%), followed by lack of funds (29.57%).
“The traditional employment concept of ‘excelling in learning leads to officialdom’ and the long-standing urban-rural dual structure, along with the huge gap in social security and public welfare hidden behind it, are the main reasons for college students' low willingness to find employment or start businesses in rural areas.” Shen Zhao summarized.
Judging from the intensity of willingness to start businesses in rural areas, the closer students' lives are to rural areas, the more willing they are to return home to start businesses. College students' willingness to start businesses in rural areas is also affected by the main income channel of their family's location; students whose hometowns rely mainly on agricultural planting for income have a stronger willingness to start businesses in rural areas. This indirectly reflects that the more students come from backward areas, the greater their willingness to return home to start businesses.
Funds! 57.69% of college students who have already started businesses regard this as the biggest obstacle to rural entrepreneurship
Unlike the imagined picture of rural entrepreneurship held by enrolled college students, those graduated college students who have already rolled up their trousers and thrown themselves enthusiastically into the fields have a deeper understanding of rural entrepreneurship.
In 2004, Zhangqiu university graduate Li Shaoqing and his spouse started their business from a veterinary clinic, meeting strong opposition from family, who denounced it as “the lowly work of castrating cattle and geldings and hogs.” Today, the couple has set up a black pig farm with annual sales of ten million yuan, becoming a famous star breeding household near and far.
Even so, Li Shaoqing is still worried about raising funds to expand the breeding scale: “We used our house as collateral for a loan of 2 million yuan, and it still hasn't been approved after two months. By comparison, we have already reached a certain scale, let alone those college students just starting out.”
The survey results confirm this point. 57.69% of college student entrepreneurs believe that the primary problem in rural entrepreneurship is insufficient funds; the second is insufficient experience (39.01%).
For entrepreneurial college students starting from zero in everything, insufficient industry experience is the primary problem they face. In 2012, Si Yanhui, who resigned from his position as a teacher at a vocational college, returned to his hometown in Heze to set up a wood processing factory. At first, he did not even know the off-season period for the products, and it was common for him to be unsure of the ruler when measuring the diameter of wood.
How to deal with complex interpersonal relationships is another difficult problem they face. Liu Zhenhua recalled that when he first returned to the village, he did not understand the need to “grease the wheels” for human relations during festivals and holidays, and often hit walls when getting things done. Once, a leader even left him with a remark to his face: “Many things are hard to handle and also very easy to handle; it all depends on how you handle them.”
Shen Zhao has also heard students describe more than once how they encountered hidden rules in the process of rural entrepreneurship and how they gave gifts to village officials and leaders of competent departments.
The survey results show that more than half of the respondents (51.65%) considered the rural entrepreneurial environment average; regarding the services of relevant local government management departments, 55% of respondents were only basically satisfied, 37% said they were somewhat dissatisfied, and only 6% were very satisfied.
“For the group of college students starting businesses in rural areas, the state has issued some relevant policies, but many respondents reported that it is difficult for policies to be implemented on the ground.” Shen Zhao said.
In addition, the survey also showed that among university graduates, more than 25% of entrepreneurs had not received government policy support; among those who had received government policy support, more than half (56%) of respondents thought the effect was average, while 33% thought the effect was poor or did not understand government policies.
In Li Shaoqing's view, the training currently received by college students starting businesses in rural areas is disconnected from practice: “The training we need more, such as financing operations, low-cost promotion, and protection of rights and interests, is basically nonexistent.”
How to make the path of college students' rural entrepreneurship smoother
“The choice to start a business in rural areas should not be a blind decision; it requires a certain amount of social experience and sufficient psychological preparation, and it requires capital accumulation, family support, and a field of entrepreneurship that reflects one's personal strengths.” Liu Zhenhua said.
The survey shows that 66.48% of respondents believed the best time to start a business is 2 to 5 years after graduation. The motivation for college students' rural entrepreneurship is first to realize personal ideals and self-worth (27.91%), followed by responding to the severe employment situation (24.12%).
The survey results also show the advantages of college students in rural entrepreneurship: college students have strong learning ability, an innovative spirit, are young and energetic, brave in striving, and better at discovering business opportunities.
How can the path of college students' rural entrepreneurship be made smoother? The research report recommends improving the mechanism for integrated urban-rural development, realizing the return of “farmer” from an identity to an occupation, strengthening national publicity on rural development, entrepreneurial policies, and typical entrepreneurial examples, and creating a social environment conducive to stimulating college students' enthusiasm for rural entrepreneurship.
The difficulties of financing and land use are key factors affecting and restricting the success of college students' rural entrepreneurship. In response, the report recommends deepening reform of the rural land system, building a three-dimensional and composite modern agricultural management system, innovating financial service models, and implementing and improving various preferential policies supporting entrepreneurship.
In view of the current problems that the departments involved in college students' rural entrepreneurship are complex and that there are difficulties and gaps in coordination and cooperation, the report recommends clarifying the management and service departments, exploring the establishment of a database on the status of college students' rural entrepreneurship and a project resource database, and setting up a rural entrepreneurial youth association and a network information platform, to help college students' rural entrepreneurship shift from a survival type to an opportunity type.
The survey also shows that entrepreneurship education in colleges and universities plays an important role in promoting college students' rural entrepreneurship. Therefore, the report recommends integrating new-type professional farmers and farmer brokers mainly engaged in agricultural product e-commerce into the university talent training and entrepreneurship education system, including the number of college students starting businesses in rural areas in the employment rate statistics of university graduates, giving play to the professional and intellectual advantages of colleges and universities, and providing continuous follow-up guidance for graduates starting businesses in rural areas.
As one of the college students starting businesses in rural areas, Liu Zhenhua now rarely feels the loneliness he felt when he first returned, even though in this village of more than 1,000 people, the young people who have stayed behind are not even enough to make up a card game: “Now what I think about more is how to do things well.”
However, Liu Zhenhua frankly said that he hopes more college students will join this entrepreneurial team: “Rural areas need more fresh blood injected into them. If everyone changes a little, together it adds up to a whole new world.”
In Shen Zhao's view, as the state resolutely breaks down institutional and mechanism-related drawbacks and comprehensively deepens rural reform, the current situation of a low rural entrepreneurship rate among college students and a mainly survival-type orientation will inevitably gradually improve. “College students' rural entrepreneurship is of great significance, has broad prospects, and holds promise for a wonderful future.” Shen Zhao said.