[update] the post

docs/_blog/to-compete-or-not-compete.md

@@ -106,4 +106,121 @@ This explains why the term '内卷' is so popular in China. __With the higher co
 those who are in the lagging position have less resources to innovate and
 compete with those who are in the leading position.__
 
+- _Fact 2_: More intense competition enhances innovation in frontier firms but may
+discourage it in nonfrontier firms.
 
+<div class='figure'>
+    <img src="/blog/images/near-frontier.png"
+         alt="euleriana_map"
+         style="width: 87%; display: block; margin: 0 auto;"/>
+    <div class='caption'>
+        <span class='caption-label'>Figure 4.</span> Total productiviy diverges for groups who are near frontier or far from; source: {% cite aghion2015schumpeterian %}
+    </div>
+</div>
+
+Results from figure 4 are very striking as it shows that the total productivity
+diverges so much between those who are near frontier and those who are far from
+frontier with the increase of competition. This means __if you are not near frontier,
+higher level of competition will even make you become less productive; however,
+if you are near frontier, higher level of competition will make you become more
+productive.__
+
+
+Since individuals are judged by productivity, the total productivity divergence
+for sure leads to the big income gap between those who are near frontier and
+those who are far from frontier.
+
+
+- _Fact 3_: Small firms exit more frequently. The ones that survive tend to grow
+faster than average.
+
+- _Fact 4_: A large fraction of R&D is done by incumbents.
+
+- _Fact 5_: The growth of firms is highly correlated with the trustworthiness of
+the legal system and the social norms of a country.
+
+
+Both fact 3 and 4 are very intuitive, we will not discuss them here. Fact 5 is
+very interesting as most people do not think about the importance of the
+trustworthiness of the legal system and the social norms of a country. However,
+it is very important to have a good legal system and social norms to support
+all the business activities. 
+
+The author used India as an example to show the importance of the trustworthiness of the legal system and the social norms of a country. In India, the legal system is not very good and the social norms are not very good either. As a result, the growth of firms in India is very slow because the firms in India only hire people who they know very well (such as family members, friends, etc.) to manage their firms. This contrains the growth of firms in India as the firms in India. 
+
+<div class='figure'>
+    <img src="/blog/images/firm-growh-indian.png"
+         alt="firm growth in India"
+         style="width: 87%; display: block; margin: 0 auto;"/>
+    <div class='caption'>
+        <span class='caption-label'>Figure 5.</span> Firm growth trend in India, Mexcio and India source: {% cite aghion2015schumpeterian %}
+    </div>
+</div>
+
+_Fact 6_: Average growth should decrease more rapidly as a country approaches
+the world frontier when openness is low.
+
+I listed fact 6 because this fact is very important for developing countries, especially for China. When China's economy grows to be near the world frontier, the average growth should decrease more rapidly if China does not open up its market. 
+
+Fortunately, leaders in China are wise enough to know the importance of
+opening up the market as it is shown in the following figure.
+
+<div class='figure'>
+    <img src="/blog/images/china-open-up.png"
+         alt="firm growth in India"
+         style="width: 87%; display: block; margin: 0 auto;"/>
+    <div class='caption'>
+        <span class='caption-label'>Figure 6.</span> News about China's opening up the market.
+    </div>
+</div>
+
+## Strategies for My Startup
+
+After checking the data and the literature, I have the following strategies for
+my startup:
+
+- Carefully evaluate the level of competition in the market. If the level of
+competition is too high, I will not enter the market. If the level of
+competition is too low, I will not enter the market either.
+
+- Carefully evaluate whether I am near frontier or far from frontier. If I am
+near frontier, I will enter the market. If I am far from frontier, I will be very
+careful to enter the market.
+
+- Always avoid over-competition if I am not near frontier. 
+
+
+- Focus on providing customized solutions to my customers with AI technologies.
+
+Here I listed key business and technologies for my startup:
+
+- Data Collection and Data Analysis
+- Data Visualization
+- Data Mining
+- Software Development with Frontend and Backend
+- Cloud Computing
+- Machine Learning/Deep Learning
+
+With the above dimensions, I measured my relative advantages and disadvantages
+with two metrics: 1) to what extent those technologies have more space to
+be customized and 2) to what extent I am near frontier in those technologies.
+
+__Here is the answer generated by ChatGPT and me__:
+
+| Technology                     | Customization Space | Proximity to Frontier |
+|:---------------------------------|---------------------|------------------------|
+| Data Collection and Analysis    | High                | High              |
+| Data Visualization              | High                | High              |
+| Machine Learning/Deep Learning  | Moderate            | High                |
+| Software Development (Frontend) | High                | Moderate               |
+| Data Mining                    | Moderate            | Moderate            |
+| Software Development (Backend)  | High                | Low               |
+| Cloud Computing                | Moderate            | Low                   |
+
+I measue the proximity to frontier by checking how much I could understand when
+I read the research papers in those technologies.
+
+Since I realized that how much money you have to invest to train a large 
+language model (such as GPT-3), I have already given up the idea of creating a
+startup directly related to AI. However, I will focus on providing customized
+solutions to my customers with AI technologies that are driven by data.