As the world’s most dynamic and rapidly advancing region, the Asia-Pacific has commanded global attention. Business and policy leaders alike have been focused on the rise of China, tensions on the Korean peninsula, Japan’s economic recovery and political assertiveness, globalization and the outsourcing of jobs to South Asia, Indonesia’s multiple transitions, competing forces of nationalism vs. regionalism, and the future of U.S.-Asia relations.

What is the near-term outlook for change in the region? How might developments in the economic, political, or security sphere affect Asia’s expected trajectory? And how will a changing Asia impact the United States? These were among the complex and challenging issues addressed by a faculty panel from the Shorenstein Asia-Pacific Research Center (Shorenstein APARC) and the Eurasia Group at the Asia Society in New York on January 23, 2006.

Moderated by director of the Freeman Spogli Institute for International Studies Coit D. Blacker, the Olivier Nomellini Family University Fellow in Undergraduate Education, the panel included Michael H. Armacost, the Shorenstein Distinguished Fellow, former Under Secretary of State for Political Affairs, and former Ambassador to Japan and the Philippines; Donald K. Emmerson, the director of the Southeast Asia Forum at Shorenstein APARC and noted expert on Indonesia; Harry Harding, the director of research and analysis at the Eurasia Group in New York and University Professor of International Affairs at George Washington University; and Gi-Wook Shin, the director of Shorenstein APARC, founding director of the Korean Studies Program, and associate professor of sociology at Stanford.

Q. COIT BLACKER: WHAT IS THE MOST DIFFICULT, CHALLENGING ISSUE YOU SEE?

A. HARRY HARDING:

In China, we are seeing a darker side of the Chinese success story. Millions of people have been lifted out of poverty, China's role in international affairs is on the rise, and China is an increasingly responsible stakeholder in an open, liberal global economy. Yet, the world is now seeing the problems China's reform program has failed to resolve. China's new five-year plan seeks to address a number of these issues, providing a plan for sustainable economic development that is environmentally
responsible and addresses chronic pollution problems, for a harmonious society that
addresses inequalities and inadequacies in the provision of medical care, insurance
and pension systems, and for continuing technological innovation, as part of China's
quest to become an exporter of capital and technology.

A. GI-WOOK SHIN:

The world should be deeply concerned about developments on the Korean peninsula. Two pressing issues are U.S. relations with South Korea and the nuclear crisis with the North. It is not clear when or whether we will see a solution. Time may be against the United States on the issue. China and South Korea are not necessarily willing to follow the U.S. approach; without their cooperation, it is difficult to secure a successful solution. The younger generation emerging in South Korea does not see North Korea as a threat. Our own relations with South Korea are strained and we are viewed as preoccupied with Iraq and Iran, as North Korea continues to develop nuclear weapons.

A. DONALD EMMERSON:

In Southeast Asia, a key problem is uneven development, both in and between the political and economic spheres. Potentially volatile contrasts are seen throughout the region. Vietnam is growing at 8 percent per year, but will it become a democracy? It has not yet. Indonesia has shifted to democracy, but absent faster economic growth, that political gain could erode. Indonesia's media are among the freest in the region;
multiple peaceful elections have been held--a remarkable achievement--and nearly all Islamists shun terrorism. Older Indonesians remember, however, that the economy
performed well without democracy under President Suharto. Nowadays, corruption
scandals break out almost daily, nationalist and Islamist feelings are strong, and the
climate is not especially favorable to foreign investment. While Burma's economy
lags, its repressive polity embarrasses the Association of Southeast Asian Nations
(ASEAN). How long can the generals in Rangoon hold on? Disparities are also
international: dire poverty marks Laos and Cambodia, for example, while the
Malaysian and Thai economies have done well.

A. MICHAEL ARMACOST:

Japan is a "good news/bad news" story. The good news is that Japan has found a new security niche since the end of the Cold War. Previously, when a security problem loomed "over the horizon," they expected us to take care of it while, if prodded, they increased their financial support for U.S. troops stationed in Japan. During the first post-Cold War conflict in the Persian Gulf, Japan had neither the political consensus nor the legal framework to permit a sharing of the risks, as well as the costs, and this cost them politically. Since then, they have passed legislation that permits them to participate in U.N. peacekeeping activities, contribute noncombat, logistic, and other services to "coalition of the willing" operations, and even dispatch troops to join reconstruction activities in Iraq. Clearly, their more ambitious role is helping to make the U.S.-Japan alliance more balanced and more global.The bad news is a reemergence of stronger nationalist sentiment in Japan and more generally in Northeast Asia. In part this is attributable to the collapse of the Left in Japanese politics since the mid-1990s. This has left the Conservatives more dominant, and they are less apologetic about Japanese conduct in the 1930s and 1940s, more inclined to regard North Korea and China as potential threats, more assertive with respect to territorial issues, less sensitive to their neighbors’ reactions to Prime Ministerial visits to Yasukuni Shrine, and more eager to be regarded as a “normal” nation. Many Asians see the United States as pushing Japan to take on a more active security role and, in the context of rising Japanese nationalism, are less inclined to view the U.S.-Japan alliance as a source of reassurance.

Q. COIT BLACKER: WHAT ARE THE COMPETING AND CONFLICTING TENSIONS BETWEEN REGIONALISM AND NATIONALISM?

A. HARRY HARDING:

In China, there has been a resurgence of nationalism over the past 10 to 15 years. Since the end of the Maoist era and the beginning of the reform movement, the leadership has embraced nationalism as a source of legitimacy, but this is a double-edged sword. It places demands on the government to stand up for China’s face, rights, and prestige in international affairs, especially vis-à-vis Japan, the United States, and Taiwan, at times pushing Beijing in directions it does not wish to go.

A. DONALD EMMERSON:

In Indonesia, it is important to distinguish between inward and outward nationalism. Outward nationalism was manifest in Sukarno’s policy of confrontation with Malaysia. ASEAN is predicated on inward nationalism and outward cooperation. Nationalist feelings can be used inwardly to motivate reform and spur development. But there are potential drawbacks. Take the aftermath of the conflict in Aceh. The former rebels want their own political party. Hard-line nationalists in the Indonesian parliament, however, are loath to go along, and that could jeopardize stability in a province already exhausted by civil war and damaged by the 2004 tsunami.

A. GI-WOOK SHIN:

Korea is a nation of some 70 million people, large by European standards, but small in comparison to the giants of Asia, especially China, India, and Russia, making Korea very concerned about what other countries are doing and saying. Korea is currently undergoing an identity crisis. Until the 1980s, the United States was seen as a “savior” from Communism and avid supporter of modernization. Since then, many Koreans have come to challenge this view, arguing that the United States supported Korean dictatorship. Koreans are also rethinking their attitudes toward North Korea, seeing Koreans as belonging to one nation. This shift has contributed to negative attitudes toward both the United States and Japan

Q. COIT BLACKER: GENERATIONAL CHANGE IS ALSO A MAJOR ISSUE IN CHINA, THE DPRK, AND JAPAN. WHAT DOES IT BODE FOR POLITICAL CHANGE?

A. MICHAEL ARMACOST:

Japan has had a “one and a half party system” for more than half a century. Yet the Liberal Democratic Party has proven to be remarkably adaptive, cleverly co-opting many issues that might have been exploited by the opposition parties. It is clearly a democratic country, but its politics have not been as competitive as many other democracies. As for the United States, we have promoted lively democracies throughout the region. But we should not suppose that more democratic regimes will necessarily define their national interests in ways that are invariably compatible with ours. In both Taiwan and South Korea, to the contrary, democratic leaderships have emerged which pursue security policies that display less sensitivity to Washington’s concerns, and certainly exhibit little deference to U.S. leadership.

A. GI-WOOK SHIN:

In both North and South Korea, a marked evolution is under way. In the South, many new members of the parliament have little knowledge of the United States. Promoting mutual understanding is urgently needed on both sides. In the North, the big question is who will succeed Kim Jong Il—an issue with enormous implications for the United States.

A. DONALD EMMERSON:

Indonesians have a noisy, brawling democracy. What they don’t have is the rule of law. Judges can be bought, and laws are inconsistently applied. The Philippines enjoyed democracy for most of the 20th century, but poverty and underdevelopment remain rife, leading many Filipinos to ask just where democracy has taken their nation.

A. HARRY HARDING:

China has seen a significant increase in rural protests. There has been an increase in both the number of incidents and the level of violence. People are being killed, not just in rural areas, but also in major cities like Chengdu. We are seeing a new wave of political participation by professional groups, such as lawyers and journalists, galvanizing public support on such issues as environmental protection, failure to pay pensions, confiscation of land, and corruption. A new generation has been exposed to the Internet, the outside world, and greater choice, but it is not yet clear at what point they will demand greater choice in their own political life.

 

WHAT WOULD YOU ADVISE THE PRESIDENT ON U.S. POLICY TOWARDS ASIA?

In the lively question-and-answer session, panelists were asked, "Given the chance to talk to the U.S. President about change and improvement in U.S.-Asia policy, what would you say?"

MICHAEL ARMACOST: I am struck by a mismatch between our interests and our strategy in Asia. In some respects our Asia policy has become something of an adjunct of our policy toward the Middle East-where we confront perhaps more urgent, if not more consequential, concerns. Asia is still the most dynamic economic zone in the world; it is the region in which the most significant new powers are emerging; and it is where the interests of the Great Powers intersect most directly. Also, it is an area where profound change is taking place swiftly. We are adapting our policies in Asia to accommodate current preoccupations in the Muslim world, rather than with an eye to preserving our power and relevance in Asia.

HARRY HARDING: It is striking how much Asian nations still want us around- as an offshore balancer and a source of economic growth. Yet they want us to understand the priorities on their agenda as well as our own. We are seen as obsessed with terrorism and China. We should exhibit more support for Asian institution building, as we have with the European Union. We also need to get our own economic act together-promoting education, stimulating scientific research and technological innovation, and reducing our budget deficits-and quit resting on past laurels. Requiring Japan to accept U.S. beef exports and then sending them meat that did not meet the agreed-upon standards has been a setback for our relations, since the Japanese public regards the safety of its food supply as critically important.

DONALD EMMERSON: Most opinion-makers in Southeast Asia are tired of Washington's preoccupation with terrorism. To be effective in the region, we must deal-and appear to be dealing-with a wider array of economic, social, and political issues, and not just bilaterally. The United States is absent at the creation of East Asian regionalism. For various reasons, we were not invited to participate in the recent East Asia Summit. Meanwhile, China's "smile diplomacy" has yielded 27 different frameworks of cooperation between that country and ASEAN. We need to be more, and more broadly, engaged.

MICHAEL ARMACOST: The establishment of today's European community began with the historic reconciliation between France and Germany. I doubt that a viable Asian community can be created without a comparable accommodation between China and Japan. Some observers believe that current tensions between Tokyo and Beijing are advantageous insofar as they facilitate closer defense cooperation between the United States and Japan. I do not share that view. A drift toward Sino-Japanese strategic rivalry would complicate our choices as well as theirs, and I hope we can find ways of attenuating current tensions.

This past autumn, the Freeman Spogli Institute ( FSI ) in conjunction with the Woods Institute for the Environment launched a program on Food Security and the Environment (FSE) to address the deficit in academia and, on a larger scale, the global dialogue surrounding the critical issues of food security, poverty, and environmental degradation.

“Hunger is the silent killer and moral outrage of our time; however, there are few university programs in the United States designed to study and solve the problem of global food insecurity,” states program director Rosamond L. Naylor. “FSE’s dual affiliation with FSI and Stanford’s new Woods Institute for the Environment position it well to make significant steps in this area.”

Through a focused research portfolio and an interdisciplinary team of scholars led by Naylor and Center for Environmental Science and Policy (CESP) co-director Walter P. Falcon, FSE aims to design new approaches to solve these persistent problems, expand higher education on food security and the environment at Stanford, and provide direct policy outreach.

Productive food systems and their environmental consequences form the core of the program. Fundamentally, the FSE program seeks to understand the food security issues that are of paramount interest to poor countries, the food diversification challenges that are a focus of middle-income nations, and the food safety and subsidy concerns prominent in richer nations.

CHRONIC HUNGER IN A TIME OF PROSPERITY

Although the world’s supply of basic foods has doubled over the past century, roughly 850 million people (12 percent of the world’s population) suffer from chronic hunger. Food insecurity deaths during the past 20 years outnumber war deaths by a factor of at least 5 to 1. Food insecurity is particularly widespread in agricultural regions where resource scarcity and environmental degradation constrain productivity and income growth.

FSE is currently assessing the impacts of climate variability on food security in Asian rice economies. This ongoing project combines the expertise of atmospheric scientists, agricultural economists, and policy analysts to understand and mitigate the adverse effects of El Niño-related climate variability on rice production and food security. As a consequence of Falcon and Naylor’s long-standing roles as policy advisors in Indonesia, models developed through this project have already been embedded into analytical units within Indonesia’s Ministries of Agriculture, Planning, and Finance. “With such forecasts in hand, the relevant government agencies are much better equipped to mitigate the negative consequences of El Niño events on incomes and food security in the Indonesian countryside,” explain Falcon and Naylor.

FOOD DIVERSIFICATION AND INTENSIFICATION

With rapid income growth, urbanization, and population growth in developing economies, priorities shift from food security to the diversification of agricultural production and consumption. “Meat production is projected to double by 2020,” states Harold Mooney, CESP senior fellow and an author of the Millennium Ecosystem Assessment. As a result, land once used to provide grains for humans now provides feed for hogs and poultry.

These trends will have major consequences for the global environment—affecting the quality of the atmosphere, water, and soil due to nutrient overloads; impacting marine fisheries both locally and globally through fish meal use; and threatening human health, as, for example, through excessive use of antibiotics.

An FSE project is analyzing the impact of intensive livestock production and assessing the environmental effects to gain a better understanding of the true costs of this resource-intensive system. A product of this work recently appeared as a Policy Forum piece in the December 9, 2005, issue of Science titled "Losing the Links Between Livestock and Land."

Factors contributing to the global growth of livestock systems, lead author Naylor notes, are declining feed-grain prices, relatively inexpensive transportation costs, and trade liberalization. “But many of the true costs remain largely unaccounted for,” she says, including destruction of forests and grasslands to provide farmland for feed crops destined not for humans but for livestock; utilization of large quantities of freshwater; and nitrogen losses from croplands and animal manure.

Naylor and her research team are seeking better ways to track all costs of livestock production, especially hidden costs of ecosystem degradation and destruction. “What is needed is a re-coupling of crop and livestock systems,” Naylor says, “if not physically, then through pricing and other policy mechanisms that reflect social costs of resource use and ecological abuse.” Such policies “should not significantly compromise the improving diets of developing countries, nor should they prohibit trade,” Naylor adds. Instead, they should “focus on regulatory and incentive-based tools to encourage livestock and feed producers to internalize pollution costs, minimize nutrient run-off, and pay the true price of water.”

LOOKING AHEAD

The future of the program on Food Security and the Environment looks bright and expansive. Building on existing research at Stanford, researchers are identifying avenues in the world’s least developed countries to enhance orphan crop production— crops with little international trade and investment, but high local value for food and nutrition security. This work seeks to identify advanced genetic and genomic strategies, and natural resource management initiatives, to improve orphan crop yields, enhance crop diversity, and increase rural incomes through orphan crop production.

Another priority research area is development of biofuels. As countries seek energy self-reliance and look for alternatives to food and feed subsidies under World Trade Organization (WTO) rules, the conversion of corn, sugar, and soybeans to ethanol and other energy sources becomes more attractive. New extraction methods are making the technology more efficient, and high crude oil prices are fundamentally changing the economics of biomass energy conversion. A large switch by key export food and feed suppliers, such as the United States and Brazil, to biofuels could fundamentally alter export prices, and hence the world food and feed situation. A team of FSE researchers will assess the true costs of these conversions.

The FSE program recently received a grant through the Presidential Fund for Innovation in International Studies to initiate new research activities. One project links ongoing research at Stanford on the environmental and resource costs of industrial livestock production and trade to assess the extent of Brazil’s rainforest destruction for soybean production. “Tens of millions of hectares of native grassland and rainforest are currently being cleared for soybean production to supply the global industrial livestock sector,” says Naylor. An interdisciplinary team will examine strategies to achieve an appropriate balance between agricultural commodity trade, production practices, and conservation in Brazil’s rainforest states.

“I’m extremely pleased to see the rapid growth of FSE and am encouraged by the recent support provided through the new Presidential Fund,” states Naylor. “It enables the program to engage faculty members from economics, political science, biology, civil and environmental engineering, earth sciences, and medicine—as well as graduate students throughout the university—in a set of collaborative research activities that could significantly improve human well-being and the quality of the environment.”

The Office of the President and the Stanford International Initiative announced on February 1, 2006, the award of eight new grants totaling $1.05 million to multidisciplinary Stanford faculty teams. The grants are the first to be awarded from Stanford’s new Presidential Fund for Innovation in International Studies (PFIIS) created in 2005.

“The world does not come to us as neat disciplinary problems, but as complex interdisciplinary challenges. The collaborative proposals we have selected for this first round of funding offer great potential to help shed light on some of the most persistent and pressing political issues on the global agenda today—issues acutely important to our common future.” john hennessy, stanford president

The fund supports interdisciplinary research and teaching on three overarching global challenges: pursuing peace and security, improving governance at all levels of society, and advancing human well-being. Priority was given to teams of faculty who did not typically work together, representing multiple fields, and choosing to address issues falling broadly within the three primary research areas of the Initiative. Projects were to be based on collaborative research or teaching, involving faculty from two or more disciplines, and, where possible, from two or more of the University’s seven schools.

“The International Initiative’s Executive Committee was encouraged to receive more than 35 proposals of an impressive caliber and, after careful review, to award the first project and planning grants, totaling $1.05 million, to eight deserving faculty teams.” Coit D. Blacker, director of the Freeman Spogli Institute and chair of the Executive Committee“The International Initiative’s Executive Committee was encouraged to receive more than 35 proposals of an impressive caliber and, after careful review, to award the first project and planning grants, totaling $1.05 million, to eight deserving faculty teams,” stated Coit D. Blacker, director of the Freeman Spogli Institute and chair of the Executive Committee.

The projects qualifying for first-round funding of approximately $1.025 million are the following:

• Governance Under Authoritarian Rule. Stephen Haber and Beatriz Magaloni, political science; Ian Morris, classics, history; and Jennifer Trimble, classics. Will examine the political economy of authoritarian systems and, by drawing on methods from history, archaeology, political science, and economics, determine why some authoritarian governments are able to transition to democracy, stable economic growth, and functioning political institutions, while others prove predatory and unstable.
• Addressing Institutional and Interest Conflicts: Project Governance Structures for Global Infrastructure Development. Raymond Levitt, civil and environmental engineering, and Doug McAdam and Richard Scott, sociology. Will examine the challenges of creating effective and efficient public/ private institutions for the provision of low-cost, distributed, and durable infrastructure services to underserved populations in emerging economies, drawing on engineering cost management, organizational and institutional theory, political science, political sociology, and transaction cost analysis.
• Combating HIV/AIDS in Southern Africa: The Treatment Revolution and Its Impact on Health, Well-Being, and Governance. David Katzenstein, infectious diseases, and Jeremy Weinstein, political science. Based on the 2005 commitment by the Group of 8 donors to put 10 million people infected with HIV/AIDS on treatment within five years, will research the impact of this treatment revolution on health, wellbeing, and governance in Sub-Saharan Africa, with an emphasis on South Africa and Zimbabwe. Seeks to develop a systematic protocol for the collection and analysis of biomedical and social science data.
• Evaluating Institutional Responses to Market Liberalization: Why Latin America Was Left Behind. Judith Goldstein, political science; Avner Greif, economics; Stephen Haber, political science; Herb Klein, history; Grant Miller, medicine; and Barry Weingast, political science. Will research the dynamic interaction between inequality and Latin American institutions, formal and informal, in explaining the poor performance of Latin American countries over the past two decades, seeking in particular to explain why liberal institutional reforms, such as trade liberalization, have failed to yield expected economic benefits.
• Feeding the World in the 21st Century: Exploring the Connections Between Food Production, Health, Environmental Resources, and International Security. Rosamond Naylor, FSI/economics; Stephen Stedman, FSI/political science; Peter Vitousek, biological sciences; and Gary Schoolnik, medicine, microbiology and immunology. Launches new research and teaching program at Stanford on Food Security and the Environment (FSE), with an initial priority on two research areas: 1) Food Security, Health, and International Security; 2) Globalization, Agricultural Trade, and the Environment. Seeks to address the problems of global food insecurity and hunger, the “silent killer” of our time, affecting more than 1 billion people globally. Research and teaching will focus on the interconnections between food security, agricultural production, infectious diseases, environmental degradation, and national and international security, with the aim of advancing human well-being by identifying linkages, policy interventions, and new forms of political cooperation.
• Political Economy of Cultural Diversity. James Fearon, political science, and Romain Wacziarg, Graduate School of Business. Will research the effect of cultural diversity on economic and political performance, examining specifically the role of ethnic, linguistic, and religious diversity on economic growth, the free flow of trade and capital across borders, governance, development of democratic institutions, and political stability. Will develop novel measures of ethnic, linguistic, and religious differences within countries and use these to assess their causal impact on important political and economic outcomes.

Two planning grants were also awarded, as follows:

• Global Health by Design. Geoffrey Gurtner, plastic and reconstructive surgery; David Kelley, mechanical engineering; Thomas Krummel, surgery; Julie Parsonnet, medicine, health research and policy; and Paul Yock, medicine, bioengineering. Will design a project to examine how new technology can be used to develop effective, affordable, and sustainable methods and devices to prevent disease in the world’s poorest countries.
• Ecological Sanitation in Rural Haiti: An Interdisciplinary Approach to Sanitation and Soil Fertility. Ralph Greco, surgery, and Rodolfo Dirzo, biological sciences. Will develop a plan to test the efficacy of ecological sanitation in decreasing disease and enhancing soil fertility in rural Haiti.

“It is abundantly clear that addressing some of the most significant problems on the global agenda will require imaginative thinking, bold approaches, and interdisciplinary collaboration,” Blacker said. The projects will produce new field research and protocols, conferences, research papers, books, symposia, and courses. Additional annual project awards totaling roughly $1 million each will be made in the fall of 2006 and in 2007.

A new era is under way for global high-technology innovation and entrepreneurship, marked by the rise of Greater China. During the past several decades, Taiwan, Singapore, and others have developed as centers in key information communications technology (ICT) industries. More recently, from Beijing to the Pearl River Delta, markets for new products are expanding, competencies in new technologies are growing, and a new generation of high-technology regions is emerging. All these signs point toward China as a rising powerhouse, accelerating the shift of locus for the global high-technology arena across the Pacific.

The contours of the nature and pace of this change are already evident in some ICT industries but have yet to be fully analyzed. The Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) (SPRIE) is leading a research program to advance the understanding of the dynamic systems of innovation and entrepreneurship that drive China’s ascendance in high technology and its implications for the global knowledge economy.

CHINA'S QUEST FOR INDEPENDENT INNOVATION

No longer satisfied with China’s role as the world’s factory, Chinese government leaders have declared that zizhu chuangxin (“homegrown” innovation) is the watchword for the future. They are sounding an urgent call to reduce dependence on foreign technology and build China into an “innovation-driven economy.” As President Hu Jintao said, “homegrown innovation” is the “core of national competitiveness”— the path to sustainable economic prosperity and global leadership.

Last May, SPRIE co-sponsored Greater China's Innovative Capacities: Progress and Challenges, a two-day, invitation-only workshop at Tsinghua University in Beijing that attracted scholars from Europe, the U.S., and Asia, as well as Chinese industry leaders and government policymakers. More than 70 participants tackled topics such as indicators of innovative capacity (patent data and journal citations, for example), reforms of Chinese research institutions to spur commercially useful innovation, and the changing roles for innovation of the state, multinational corporations (MNCs), and domestic firms.

A few numbers illustrate China’s progress over the past decade. Total R&D spending nearly tripled, reaching 1.3 percent of GDP in 2005, even while GDP doubled. China is now ranked third worldwide in overall R&D spending (after the U.S. and Japan), with targets to increase spending to 2 percent of GDP by 2010. Science and engineering PhDs more than doubled between 1996 and 2005. And China’s growth rate of U.S. patents granted has eclipsed Japan, Taiwan, or Korea, with an even steeper trajectory in Chinese-authored science and technical publications in international journals.

Yet, according to SPRIE Co-Director Henry S. Rowen, “the highest value-added work in China still is done largely in foreign-invested companies and increasingly in firms led by returnees who have been educated and worked abroad. Currently most R&D is focused on incremental improvements of existing products and services. Nevertheless, the key building blocks are in place for increasing technology contributions.” At MNC R&D centers like Nokia and Microsoft, top Chinese teams are beginning to contribute to worldwide product design and research. Through interviews at more than 75 firms in Beijing and Shanghai, SPRIE researchers have identified emerging competencies at some of the best domestic research labs and companies, ranging from multimedia chip design to communication equipment.

Huawei, the telecommunications networking giant with 2005 revenues of $5.9 billion, reports consistently spending more than 10 percent of sales on R&D. Boasting more than 10,000 researchers in China plus R&D centers in Bangalore, Silicon Valley, Dallas, Stockholm, and Moscow and 3,600 patent applications in 2005, the company epitomizes China’s growing pursuit of low-cost innovation, not just low-cost manufacturing and services.

However, obstacles to China’s drive for innovation are not trivial. Many Chinese institutions, though improving, still fail to provide an environment conducive for innovation, including a competitive and open system for R&D funding or effective intellectual property protection. As SPRIE associate director Marguerite Gong Hancock observes, “The current gold rush mentality for quick profits runs counter to breakthrough technology innovation that is typically the result of patient investments in research with long-term and uncertain payoffs. To date, some of the most innovative bright spots are not in disruptive technologies but in processes, services, and business models.”

One notable obstacle confronting Chinese high-tech firms is a leadership talent shortage, a problem that is the focus of another SPRIE research initiative.

HIGH-TECHNOLOGY LEADERSHIP IN GREATER CHINA

Since 1999, founders have led 24 Chinese firms to IPOs on NASDAQ. From this unprecedented number of startups to a rising class of billion-dollar giants going global, high-tech companies in China have a dramatically intensifying need for leadership.

To examine how China’s high-tech executives are facing this challenge, SPRIE partnered with Heidrick & Struggles, a leading executive search firm, to conduct more than 100 interviews with executives at both domestic and multinational high-tech firms operating in China.

Leaders face what Nick Yang (MS ’99), founder of wireless service provider KongZhong, described as “uncharted waters.” They must create a cadre of top leaders and managers in the face of an acute shortage of seasoned managers and globally capable executives. As John Deng, founder and CEO of Vimicro (a fabless semiconductor company with $396 million market cap), said, “I don’t lack other things, such as funding, infrastructure, or government relations. What I lack now is people.”

SPRIE Co-Director William F. Miller commented, “Interestingly, not one interviewee expressed an intention to adopt a management model that diverges significantly from the dominant global model,” a model defined by competencies well documented as key among U.S. and European executives. Based on the SPRIE-Heidrick study, some of these competencies currently are both more critical and more difficult to find in China: the ability to drive results, achieve customer orientation, provide visionary leadership, create organizational buy-in, model key values, and delegate and empower. The best leaders not only are seeking these competencies in senior executives but also cascading these attributes throughout their organizations.

The impact ripples throughout the talent pipeline, from recruiting to retaining to developing key people. High-tech leaders in China are deploying a wide range of new tactics. Miller noted, “To address pressing leadership shortages, executives are devoting an unusually large amount of their time and attention to talent and human resource issues.” As Mary Ma, CFO of computer giant Lenovo, stated, “I have become an HR manager. I spend 30 percent of my time on people and succession issues.” And the best companies are systematically using their best leaders to mentor and mold the next generation of professionals—the mid-level managers and team leaders, who are mobile, scarce, and frequently lack the full set of skills needed to drive results.

Emerging trends in leadership among China’s hightech executives may be a good harbinger, pointing to how and where this influential generation of China’s high-tech leaders are steering their firms—firms that have been charged with the task of leading China’s future economic growth.

Business, government, and academic communities increasingly recognize the role that entrepreneurship and innovation play in addressing some of the world’s most complex problems. At Stanford, the new Hasso Plattner Institute of Design, also known as the d.school, takes innovative design approaches beyond the traditional disciplines of product and industrial design. There, students and faculty use design thinking to tackle difficult problems that demand interdisciplinary solutions. Research projects and classes range from building better elementary schools to enabling farmers to step out of poverty to changing how small businesses innovate.

Design thinking, a methodology that grew out of the Design Division at the School of Engineering at Stanford, has been refined over the years through programs such as Engineering 310, “Team Based Design Innovation with Corporate Partners.” At the core of Design thinking lie 1) a human-centered approach to finding solutions, 2) a strong collaborative culture that brings together multidisciplinary teams and encourages diverse perspectives, and 3) a continuous prototyping process.

In April 2007, Professor Larry Leifer, director of the Stanford Center for Design Research (CDR) and a member of the d.school, together with Philipp Skogstad, executive director of E 310, visited the Pontificia Universidad Javeriana (PUJ) in Cali, Colombia. During the three-day visit, sponsored and facilitated by IOP, the Stanford University International Outreach Program (http://iop.stanford.edu/), the Stanford delegation negotiated a detailed plan to engage two teams of 5th-year students at PUJ with two Stanford master level teams on a corporate project in the E 310 program. Professors Larry Leifer and Mark Cutkosky will co-lead this nine-month international collaboration, which will start in fall 2007 and will include regular videoconferences, online collaboration, and short-term visits.

The goals of this collaboration are twofold. 1) Students and instructors at PUJ and Stanford will have an opportunity to learn from each other as they participate in E 310. For Stanford participants, it will be the first time to have a South American perspective represented in the globally distributed E 310 program. For PUJ participants, it will be an opportunity to learn more about design thinking as the university develops its own design program, allowing them to strengthen the connection between the university and industry, a bridge that traditionally has been weak across South America. 2) Both universities will be able to build upon the E 310 opportunity and apply the design thinking approach to other socially and economically useful innovations, with a particular emphasis on global challenges that have a strong impact on developing countries.

The collaboration between PUJ and Stanford is well matched with IOP’s goal of promoting new multidisciplinary curriculums that address global challenges, introduce innovative learning and teaching approaches, and take advantage of appropriate uses of information and communication technologies.

Walking down a side street in Shanghai’s French Concession, a partially preserved corner of that city’s gloried and turbulent past, visitors come upon an ivy-covered house that served as the headquarters for the Shanghai branch of the Communist Party in the 1940s. Here the spartan quarters of Mao’s second in command, Zhou Enlai, are carefully preserved, the narrow beds and wooden desks evoking a simpler, revolutionary China.

A short ride away, across the murky waters of the Huangpu River, monuments to the new China are being erected in what was farmland less than two decades ago. The Pudong New Area, with its clusters of highrise office towers and multi-story shopping malls, is emblematic of the rush to wealth and economic power that now drives China.

These were among the images from a visit to China by a delegation of scholars from the Walter H. Shorenstein Asia-Pacific Research Center from April 8–14, 2007. Though time was short, the group managed to visit Shanghai, Hangzhou, and Beijing.

Fulfilling Shorenstein APARC’s mission to carry its work “into Asia,” the delegation met senior officials from government and business and held wide-ranging exchanges with Chinese scholars and policymakers at leading universities and research institutions. The conversation ranged from China’s development strategy to the current state of relations between China and its longtime rival and neighbor, Japan.

The delegation was led by Shorenstein APARC director and professor of sociology Gi-Wook Shin and by professor of political science Jean C. Oi, who has launched the center’s new China studies program. The group included Shorenstein distinguished fellow Ambassador Michael H. Armacost, associate director for research Daniel C. Sneider, and senior program and outreach coordinator Neeley Main. In Beijing, Freeman Spogli Institute director Coit D. Blacker joined the delegation, as did Shorenstein APARC’s Scott Rozelle.

The trip started in Shanghai, a dynamic center of finance and industry that has drawn in many Stanford graduates. State-owned enterprises such as Baosteel, one of the world’s largest steel producers, are in the midst of becoming players in the global marketplace. From Baosteel’s sprawling complex of docks, blast furnaces, and rolling mills along an estuary of the Yangtze River, products are now being dispatched around the world. In a meeting, the leadership of the Baosteel Group expressed an eagerness to tap into the educational and training opportunities offered at Stanford University.

Shanghai is not only the business capital but also a political center, rivaling Beijing. The Shanghai Institute for International Studies is an unofficial foreign relations arm of the Shanghai government. Shanghai Institute scholars are also players in national policy debate on many key issues facing China, such as relations with Taiwan, with Japan, and even with the Korean peninsula.

The scholars presented their views on a wide range of issues, from the preparations for the 17th Congress of the Communist Party this coming fall to emerging structures of regional integration in East Asia. Professor Xu Mingqi, who is also a senior leader of the Shanghai Academy of Social Sciences, explained that China’s development strategy is shifting toward a more balanced approach. Whereas local government officials previously were pressed to meet targets for GDP growth, foreign investment, and export volume, now they must also raise employment levels, close the growing income gap, and provide social security.

Hangzhou, considered one of the most beautiful cities in China, is a two-hour drive south of Shanghai. The modern roadway passed a tableau of the suburbanization of this part of China’s countryside, with multi-story brick homes mushrooming amidst the fields. The delegation arrived at Zhejiang University, considered among the best of China’s provincial higher educational institutions and growing rapidly in size and scope.

The Shorenstein APARC delegation met with faculty members from Zhejiang’s social science departments, who briefed the delegation on their research work in areas such as distance education, international relations, Chinese history, even a school of Korean studies. Zhejiang is also the site of a new research institution, the Zhejiang Institute for Innovation (ZII), founded by Stanford engineering graduate Min Zhu, a Silicon Valley entrepreneur who is determined to bring the lessons of Stanford and the valley to his home province and his undergraduate alma mater. ZII aims to foster applied research that can tie the university to the vibrant entrepreneurial culture of Zhejiang province. Shorenstein APARC researchers may soon be carrying out fieldwork in this laboratory of change, based at ZII.

Beijing, however, is still the place that matters most in China, not only in the realm of government but also when it comes to academic scholarship. The delegation met with two of Shorenstein APARC’s longtime corporate affiliates in China—PetroChina, the state-owned oil and gas giant, and the People’s Bank of China. Shorenstein APARC dined with a lively group of Chinese journalists, organized by former Stanford Knight fellow Hu Shuli, the editor of Caijing Magazine, considered China’s leading independent business publication.

The substantive task was to forge new ties with key research institutions. The current state of China’s development strategy was again on the agenda when the delegation met with senior officials from the National Development and Reform Commission (NDRC), formerly China’s State Planning Commission. Alongside the NDRC, the delegation met as well with the leadership of an offshoot of China’s State Council, the China Development Research Foundation, which is doing important work in promoting good governance in areas such as poverty alleviation, nutrition, and budgeting. Those conversations were echoed later in our meetings with scholars from Peking University’s School of Government.

Shorenstein APARC’s own China program, as Oi explained, is focused on understanding the tensions that arise as China grapples with the consequences of its rapid economic development. Out of the meetings in Beijing, an ongoing dialogue has begun, to be advanced this summer with a visit from a NDRC delegation and in the fall with an international conference at Stanford on China’s Growing Pains.

The delegation also engaged in frank and useful exchanges on a variety of international relations issues. We had an extended meeting with scholars and leaders of the China Reform Forum (CRF), a think-tank associated with the Communist Party’s Central Party School, the premier institution for training party leaders and officials. The CRF is credited with authoring important concepts such as the foreign policy doctrine of China’s “Peaceful Rise.” These discussions were followed by a visit and exchange with scholars from Peking University’s widely respected School of International Studies.

The scholars shared analysis of the current state of the North Korean nuclear negotiations, as well as evaluating the outcome of Chinese Premier Wen Jibao’s visit that week to Japan. Over dinner with CRF Vice Chairman Ding Kuisong, the conversation turned to the American presidential politics and the future direction of U.S. foreign policy.

Professors Blacker, Shin, and Oi also met with senior officials of Peking University, as part of an ongoing dialogue about cooperation between these two premier institutions of higher education.