Senior fellow and contributing author, %people1%, comments in <i>Nature</i> on the release of the Millennium Ecosystem Assessment--a four year endeavour that explores the link between human well-being, the status of ecosystems and their sustainable use.

How can ecosystems provide sustainable services to benefit society?

Four years in the making, the Millennium Ecosystem Assessment (see Nature 417, 112-113; 2002) is released this week (starting 30 March). This gigantic endeavour explores the link between human well-being, the status of ecosystems and their sustainable use.

What has this assessment taught us about developing our planet, and will it, or should it, be continued? To answer the first part of this question, the assessment is an invaluable record of where we stand now, and why. But for it to be useful, the answer to the second part of the question must be 'yes'. We need to take a consistent approach to measuring the status and trends of the world's ecosystems. To take one example, the Convention on Biological Diversity has set the target of reducing the rate of global loss of biodiversity by 2010. But the data to evaluate whether this goal is being met are not readily available, as biological diversity is more than just an enumeration of species present or absent - it includes parameters such as the populations of species and the ecosystems in which they reside. In addition, biodiversity is just one of the many aspects of change in ecosystems and their related functions assessed in the Millennium Ecosystem Assessment. Only from a periodic audit of the state of our natural resource base can we determine if we are indeed approaching sustainability.

At present, there are no formal plans to repeat the Millennium Assessment. There should be, and we hope that the informal discussions among the current sponsors will bear fruit from the seeds sown by the many smaller, ongoing sub-global assessments that were stimulated by the assessment.

Achievements and goals

The Millennium Ecosystem Assessment took a new pathway of evaluating the status of the Earth's human support systems. Rather than the standard environmental audit, the new assessment places audits of numbers of organisms and so on into the context of how ecosystem changes have affected human well-being, and how they may do so in the foreseeable future. It had to find a link between the status of biotic systems and the status of individuals in various societies in the world to estimate the capacity of ecosystems to provide services that benefit society. Many of these links are obvious, but others have not been appreciated, nor have all these linkages been quantified. In essence, we had to make a large leap from the current styles of evaluations of status and trends in ecosystems to an entirely different approach - an ecosystems services database related to how ecosystems and societies operate, and how they interrelate.

Current status of ecosystems

Human societies have made marked progress in increasing provisioning services, such as crops and livestock, to meet the demand of a growing population (see Box 1). Food is more abundant and cheaper than in the past. Despite these dramatic accomplishments, there are still more than 850 million undernourished people, and some advances in production are at the cost of other services essential for human well-being, such as ocean fisheries, wood for fuel, genetic resources and - perhaps the most important - fresh water. It is the poor in many nations that are most directly dependent on services from ecosystems, and the degradation of these systems can exacerbate their poverty. Millions of people face the reality of the declining availability of cheap protein from local fisheries, inadequate water for sanitation or live on degraded landscapes.

There are a number of issues that cloud the goal of sustaining a high level of provisioning services. The use of fertilizer in agriculture has greatly increased to meet food demand, but at the cost of polluting off-site unmanaged ecosystems, such as groundwater, rivers and coastal fisheries. In many regions, water for irrigation is being pumped from groundwater and in some cases from fossil sources. Rivers are dammed and diverted for irrigation, altering ecosystems that depend on this water - causing the loss of many of the services they provided.

Further, we are diminishing crucial 'regulating' services responsible for climate, erosion, air- and water-quality control, as well as for the regulation of pests and natural hazards. We are losing these services due to massive land-surface conversion, atmosphere alteration, eutrophication, overharvesting and the impact of invasive species. The Millennium Assessment concluded that 60% of the ecosystem services evaluated were either being degraded or being used unsustainably.

As an example, cultivated systems (areas where at least 30% of the landscape is in croplands, confined livestock production or freshwater aquaculture) now cover a quarter of the Earth's surface, partly by conversion of temperate grasslands, Mediterranean-climate forests and many tropical ecosystem types. Forests have essentially disappeared from 25 countries, with 9.4 million hectares being lost annually from the Earth's surface. Historically important fisheries have collapsed or are overfished, one third of the mangrove forests for which there are historical data have been lost, as have 20% of the coral reefs, with a further 20% degraded. Nearly 40% of the rivers of the world have been fragmented. Species and populations of species are being lost at unprecedented rates, while at the same time the global biota is becoming homogenized owing to the introductions of alien species to new regions. These examples represent major losses of pieces of the biosphere machinery, which have a serious impact on the delivery of ecosystem-regulating services - impacts such as greater prevalence of infectious diseases in disrupted ecosystems, adverse effects on local climates by ecosystem modification, and the loss of flood protection (as in the recent tsunami in Indonesia).

What we can do

The drivers of change in ecosystems and their services will continue in direction and intensity. So how can these trends be reversed to achieve sustainability and to relieve the negative impacts of the loss of services to society, particularly to the disadvantaged? New pathways and approaches can and must be taken. But these are major initiatives, which will mean profound changes in the way global society operates. As learned in the Millennium Assessment, favourable responses need to take place at all levels, from the local to the global. Global mechanisms do not necessarily solve local problems, yet are an important part of the overall solution. At the same time, local players and solutions can feed into regional and global approaches. The players at these different levels address different decision-makers, who can collectively put in place the major changes that are needed for ecosystem sustainability.

The Millennium Assessment examines the merits of options for mechanisms and policies, to accomplish the goal of maintaining and enhancing the delivery of ecosystem services to society. Some of these require major reorganization in the way we do business. At present, our organizational structures address separately the issues of a single resource, such as agriculture, fisheries or the environment. There is little interaction within and between each issue, and much less again with trade and the treasury bodies. The lesson of the Millennium Assessment is that all these resource issues are interrelated: action on one issue has consequences for another. It is crucial to address how to minimize the trade-offs (biodiversity or clean water for agricultural yield), either on-site or by managing landscapes. One important example of how this process can work is the EU system of directives for nitrate accounting on landscapes.

Some institutional innovations are moving towards more integrated views of issues and responses to them. For example, Britain has a government department for Environment, Food and Rural Affairs. These are all closely interrelated domains, but in other countries are often handled by competing agencies. Elsewhere, interagency groups are evolving to address central issues such as climate change, but their effectiveness is hampered by competitiveness and politics. We need new kinds of institutions in better positions to achieve sustainability of ecosystems that provide for human well-being.

We must also try to improve the economics. Although provisioning services are enmeshed in the local (and increasingly global) marketplace, regulating services are not. We must accelerate our ability to value ecosystem-regulating services at the national level, as well as the ecosystem services that provide crucial cultural amenities, and ensure that these values are considered in decision-making.

Some progress is being made. Costa Rica has established a system of conservation payments, under which contracts are brokered between international and domestic 'buyers' and local 'sellers' of sequestered carbon, biodiversity, watershed services and scenic beauty. On a global scale, the Ecosystem Marketplace consortium is beginning to track transactions, pricing trends and buyers' requests on the carbon, water and biodiversity markets. It is predicted that the global carbon market will reach US$44 billion by 2010.

We need to eliminate the subsidies that promote the excessive use of ecosystem services and evaluate more carefully the trade incentives that damage ecosystem services. We must work harder to educate the public on the strong links between sustainable ecosystems and the lives of humans. The role of new technologies in more efficient use of natural resources is crucial and needs more incentives.

There is plenty that can and needs to be done to deal with the crisis that has already enveloped us. The path is open for scientists to quantify, to a much greater extent, the way in which the operation of ecosystems is directly linked to human well-being, and hence model the course of human activities on future outcomes of the delivery of these services. The Millennium Assessment is certainly providing a strong stimulus for such studies.

Millennium Assessment

Acknowledgements. We thank the scientists, reviewers and members of the review board who provided input to the Millennium Ecosystem Assessment, and the sponsors of this work.

In 2004, SPRIE launched the three-year Greater China Networks (GCN) research program. Its goal is two-fold. First, the GCN seeks to advance understanding of the systems of innovation and entrepreneurship that drive Greater China's ascendance in high technology. Second, it will study the nature and impacts of the region's integration into the global knowledge economy. The research agenda includes a focus on activities or institutions that underpin systems of innovation and entrepreneurship, especially for the new generation of ascending high tech regions in Greater China. These include university-industry linkages, globalization of R&D, venture capital, new firm formation and development, and flows of technology and business leaders.

On February 25, 2005 a panel of researchers presented preliminary findings from surveys of 176 CASPA members (171 valid responses). The discussion included the interpretation of study findings, key issues and trends, and implications for professionals, corporate managers, and policymakers in the semiconductor industry. Panelists included Hsing-Hsiung (Hubert) Chen (pictured above left), SPRIE visiting scholar and director of Integrated Research Division, ITRI; Jian Hung Chen (pictured above center), SPRIE visiting scholar and ITRI researcher; and Mr. David Wang (pictured above right), vice president, Fibera Inc., CASPA President 2003-2004.

The Rise of Greater China in the Global Semiconductor Industry

Dr. Hsing-Hsiung Chen shared with the participants some striking statistics that clearly highlighted the rise of Asia and Greater China in the semiconductor industry. While in 1985 Asia accounted for only one percent of worldwide semiconductor production and 7 percent of worldwide semiconductor consumption, the numbers are expected to reach 21 percent and 42 percent respectively in 2005. The story for Greater China is particularly salient. Take the year of 2004 as an example. In IC design, the top thirty firms in this sector commanded 86 percent of the worldwide market share and half of them were founded or co-founded by Chinese professionals. In fabrication, eight of the top ten foundry companies were Chinese and together they covered 88 percent of the market. A similar story can be told about packaging and testing companies, with eight of the top ten companies located in Taiwan and mainland China and accounting for half of the global market share.

The Connection of Silicon Valley Professionals to Greater China

Mr. David Wang pointed out the role of the Silicon Valley as a hotbed for entrepreneurs, managers, and engineers that found or join semiconductor companies in Greater China. For example, CASPA, a leading semiconductor professional organization for Chinese Americans, has over 3,500 members in the United States and Asia, with the majority residing in the Silicon Valley. Among 171 CASPA survey respondents, half had worked in the United States and Greater China. Fifteen percent had worked at more than one place in Greater China.

Many aforementioned top Chinese semiconductor companies have strong ties to the Silicon Valley. Companies such as SST and ISSI were founded by Chinese in the Silicon Valley but have strong presence in the Greater China region in production and sales. Other Greater China-based companies like UMC, SMIC, ASMC, HuaHong NEC, and Winbond have drawn an impressive list of senior managers from Silicon Valley companies.

Job Movement Trends

Dr. Jian-Hung Chen presented some preliminary findings of the surveys and identified some interesting trends in job movement. When being asked "Will you consider working permanently in a region different from your current location?" 7 percent of the respondents revealed that they were already considering moving, while 52 percent said they would consider moving within 1-3 years. Young professionals (with fewer than ten years of work experience) were somewhat more likely to move within three years (65 percent) than more experienced professionals (~57 percent). In terms of geographic destinations, only 10 percent favored moving to or relocating to elsewhere in the United States. The rest all preferred relocations within or to Greater China. Shanghai was the most popular site, voted by 50 percent of the respondents as their preferred destination. Taiwan and Beijing followed with 13 percent and 14 percent of the votes. Breaking down the data according to the origin of the respondents into Mainland China, Taiwan and the United States (indicated by the location of undergraduate education), Shanghai remains the topic choice for all three populations. Interestingly, professionals originally from Taiwan were more likely to move to Shanghai (39 percent) than return to Taiwan (33 percent) and none of the professionals originally from mainland China regarded Taiwan as an option.

An examination of key influential factors on movement decisions may shed some light on the observed trends. Growth potential, family matters, and quality of Life were ranked the three most important factors in one's movement decision. others' success/failure examples and company decision received the lowest scores. Senior professionals were more likely to be influenced by company decision (compared to junior professionals), while junior professionals more by others' success/failure examples (compared to senior professionals). Host company size did not seem to be a noteworthy differentiator.

Finally, in terms of the type of company one hopes to work for after relocation -- the choices being startup, multinational, local company and company decision (i.e. internal transfer) -- professionals moving to Taiwan strongly favored local company and internal transfer, while professionals moving to Beijing and Shanghai preferred startup much more than the other three modes.

Greater China's Regional Advantage

Several participants chipped in their insights on the mainland's labor cost advantage. For semiconductor professionals moving from the Silicon Valley to Shanghai, "The rule of thumb is a 1/3 to 1/2 pay cut, although they may be awarded with [the realization of] the growth potential through other forms, such as stock options" observed Mr. Wang. Such expatriate compensation packages are still substantially higher than those for local hires, whose salary level is usually 20-25 percent of that of the Silicon Valley. Overall local income increase is estimated to be about 5-10 percent a year, although most of it is due to the move up the semiconductor industry value chain. Salary increase for the same position is probably less than 5 percent a year. Entry-level salary has also been heavily affected by the recent surge in the local supply of engineers, thanks to a substantial increase in college engineering graduates. Hence, taking into account differences in cost and experience, "for now, the common and effective practice seems to be hiring one expatriate for every 25 local hires," said Dr. Jian-Hung Chen.

Going beyond cost considerations, discussions centered around a provocative question raised by a member of the audience: "Is it just a question of time or is there any other fundamental piece that needs to get in place before Chinese firms can penetrate high value-added nodes in the semiconductor industry value chain [i.e. design]?" SPRIE Director, Professor Henry Rowen responded by pointing out that although to this day, probably only a handful of the 400-500 design companies in Mainland China have real technologies and products, let alone profits, Chinese fabless design companies are growing rapidly and can find lots of applications in the domestic market, especially in telecommunication. Dr. Wang concurred that it is probably more of a matter of time. "If a foundry moves to the next-generation technology, firms up- and down-chain will follow suit and build complementary capacities as well. It's a clustering effect. It just takes time."

Other Issues

Panelists and the audience also engaged in lively discussions about corporate strategy for semiconductor multinational companies in Greater China, family, social and cultural factors affecting the flow of talents, and inter-regional collaboration. Networks and flows of managerial and technical leaders -- particularly their connection to the Silicon Valley and their worldwide reach -- are new priority areas of research for SPRIE.