A proposal to assess the societal and security implications of the female deficit in China, a study of the impact of higher education's rapid expansion in large developing economies, and incentives for provision of health care services for one billion people in rural China were among the new projects funded by Stanford's Presidential Fund for Innovation in International Studies (PFIIS) in mid-February. Planning grants for an international health and society initiative in the Indian subcontinent and psychosocial treatment for children orphaned by the tsunami in Indonesia were also awarded.

"These projects show great potential to advance human knowledge, help devise sustainable solutions, and build a better, more secure future for millions around the world," said Stanford President John Hennessy. "In launching The Stanford Challenge, we committed to marshal university resources to address some of the 21st century's great challenges in human health, international peace and security, and the environment."

The $3 million, intellectual venture capital fund was established by the Office of the President and the Stanford International Initiative in 2005 to encourage new cross-campus, interdisciplinary research and teaching among all seven schools at Stanford on three overarching global challenges: pursuing peace and security, improving governance, and advancing human well-being. The first $1 million was awarded in February 2006 to eight interdisciplinary faculty teams examining such issues as the HIV/AIDS treatment revolution in sub-Saharan Africa, why Latin America has been left behind in recent gains by developing countries, and food security and the environment.

"It's impressive to see the committed, collaborative, and innovative ways Stanford faculty are joining together in new interdisciplinary research and teaching to generate new understanding of the linkages among complex problems and train a new generation of leaders to address them effectively," said Freeman Spogli Institute Director Coit D. Blacker, chair of the International Initiative Executive Committee.

New projects qualifying for funding and their principal investigators are:

• Female Deficit and Social Stability in China: Implications for International Security. Melissa Brown, anthropological sciences; Marcus Feldman, biological sciences, and Matthew Sommer, history. As the number of surplus, marriage-age men in China approaches 47 million in 2050, this project will study factors that predict men's inability to marry before 30, the availability of social welfare to men and their families, their contribution to the floating population of rural-to- urban migrants, the labor-related migration of unmarried women, and the impact of this migration for domestic stability and international security.
• Potential Economic and Social Impacts of Rapid Higher Education Expansion in the World's Largest Developing Economies. Martin Carnoy, education; Amos Nur, geophysics; and Krishna Saraswat, electrical engineering. The development of higher education systems in Brazil, Russia, India, and China (BRIC) will have a major impact on their ability to transition to large, developed, knowledge-based economies. Is the way nation states expand and reform higher education in response to global pressures an important indicator of societal capacity to achieve sustained economic growth? This project will examine differing approaches of BRIC governments to higher-education growth and reform, and ask whether these reflect differing levels of state capacity to expand the knowledge base for economic and social development and whether differing approaches result in significant changes in formation of analytical skills in university graduates, particularly scientists and engineers.
• Health Care for One Billion: Experimenting with Incentives for the Supply of Health Care in Rural China. Scott Atlas, radiology; Scott Rozelle, the Walter H. Shorenstein Asia-Pacific Research Center, FSI. This project examines the effects of existing health policies and institutions in rural areas of China - including rural health insurance, privatization of rural clinics, and investment in township hospitals - and introduces a new experiment to study and realign incentives to address a serious flaw in China's health care system, the practice in which doctors both prescribe and derive significant profits from drugs.

Two planning grants were also awarded, as follows:

• Stanford International Health and Society Initiative: Proposal to Plan for an Initial Program in the Indian Subcontinent. Vinod K. Bhutani, pediatrics; Nihar Nayak, obstetrics and gynecology. This project seeks to improve unacceptably high maternal and childhood morbidity and mortality rates in the Indian subcontinent by devising innovative strategies to bridge existing social and access barriers in the micro- and macro- health environment. Includes leadership training and cooperative work on practice and policy strategies with experts from Stanford and the subcontinent.
• Psychosocial Treatment of Children Orphaned by the Asian Tsunami in Indonesia. Hugh Solvason, psychiatry; Donald Barr, sociology. This project's goal is to develop and implement changes to reduce the sense of dislocation, anxiety, and behavioral problems among tsunami orphans at the As-Syafi`iyah Orphanage in Jakarta. By arranging the children into more cohesive groups that can operate like "families" rather than their current state of random associations typically found in orphanages, the project will create a new and ordered social system. In addition, Solvason and Barr plan to develop a system of counseling interventions for the most severely symptomatic children (supervised by Stanford Psychiatry faculty). Translated measures of depression, anxiety, and PTSD will be used to assess the success of the intervention.

The projects will produce new field research, conferences, research papers, books, symposia, and courses for Stanford students.

A third round of project awards will be made in February 2008. A formal request for proposals will be issued in the fall of 2007, with proposals due by December 14, 2007. Priority is given to teams of faculty who do not typically work together, represent multiple disciplines, and address issues that fall broadly within the three primary research areas of the International Initiative. Projects are to be based on collaborative research and teaching involving faculty from two or more disciplines, and where possible, from two or more of Stanford's seven schools.

For additional information, contact Catharine Kristian, ckristian@stanford.edu.

In 2003, consumption of IT goods worldwide was $1.5 trillion. Asia represented twenty percent of this total. Even more telling, Asia produced about forty percent of these goods. The continued rise of Asian IT innovation will pose a challenge to the eminence of traditional IT centers, notably Silicon Valley.

Making IT examines the causes as well as the major consequences of the dramatic rise of Asia in this industry. The book systematically analyzes each country's policies and results, on both a national level and, more importantly, in the innovation regions that have developed in each country: Japan's excellence in technology and manufacturing skills; Bangalore, India's late start and sudden explosion; Taiwan's Hsinchu Science-based Park's entrepreneurship and steady growth; Korea's Teheren Valley's impressive development of large companies; Singapore's initial reliance on multinational firms and its more recent switch to a home-developed strategy; and China's Zhongguancun Science Park's encouragement of investment from foreign firms while also promoting a domestic IT industry.

The book outlines the difficulties in the IT industry, including Japan's tendency to keep out most foreign firms and China's poor protection of intellectual property. Developed by the team that brought readers The Silicon Valley Edge, Making IT analyzes why this region has an advantage in this industry, the similarities and differences in the countries' strategies, why companies have clustered in specific localities, and most important, what will be changing in the coming years.

Making IT should leave no doubt that the United States and other countries competing in the global economy will face enormous challenges--and opportunities--responding to the rise of an innovative Asia.

Contributors

• Jun-Woo Bae, Graduate School of Management, Korea Advanced Institute of Science and Technology (KAIST)
• Zong-Tae Bae, Graduate School of Management, Korea Advanced Institute of Science and Technology (KAIST)
• Rafiq Dossani, Shorenstein Asia-Pacific Research Center, Stanford University
• Kyonghee Han, Department of Human and Community Development, University of California, Davis
• Ken-ichi Imai, former Senior Fellow, Freeman Spogli Institute for International Studies, Stanford University
• Martin Kenney, Department of Human and Community Development, University of California, Davis
• Jong-Gie Kim, Graduate School of Business and Economics in Information, Myongji University
• Kark Bum Lee, Information and Communications University, School of Management
• Noboru Maeda, Graduate School of Creative Cities, Osaka City University
• Sam Ock Park, College of Social Sciences, Seoul National University
• Jon Sandelin, Office of Technology Licensing (OTL), Stanford University
• Chintay Shih, College of Technology Management, National Tsing-Hua University
• Sang-Mok Suh, Myongji University
• Shoko Tanaka, ST Research
• Toru Tanigawa, Kyushu University
• Kung Wang, Graduate Institution of Industrial Economics, National Central University
• Yi-Ling Wei, Industrial Economics and Knowledge Center, Industrial Technology Research Institute
• Poh Kam Wong, Entrepreneurship Centre, National University of Singapore
• Yasuhisa Yamaguchi, Japan Development Bank
• Mulan Zhao, Administrative Committee of Zhongguancun Science Park

Private investment in electricity generation (so called "independent power producers" or IPPs) in developing countries grew dramatically during the 1990s, only to decline equally dramatically in the wake of the Asian financial crisis and other troubles in the late 1990s. The Program on Energy and Sustainable Development at Stanford University undertook a detailed review of the IPP experience in developing countries to identify the principal factors explaining the wide variation in outcomes for IPP investors and hosts. Erik Woodhouse

presented lessons for the next wave in private investment in electricity generation at "International Political Risk Management: Meeting the Needs of the Present, Anticipating the Challenges of the Future," the fifth installment of an annual symposium sponsored by the World Bank's Multilateral Investment Guarantee Agency and Georgetown University's

School of Foreign Service.

Read his general report on Political Economy of International Infrastructure Contracting, Lessons from the IPP Experience and a more detailed analysis of his case selection in a following report titled IPP Study Case Selection and Project Outcomes: An Additional Note.

North Korea's announcement this week of plans to test a nuclear weapon is hardly surprising. The six-party talks to negotiate an end to its nuclear program are dead, and the North faces escalating financial and economic sanctions by the United States and its allies.

Experts have long debated the real motivations of the North in developing nuclear weapons. Some contend that the nuclear program, even the latest pronouncement, is simply a bargaining chip to gain security guarantees and economic aid. Others see a long determination to become a nuclear state.

The North Korean leaders may have begun the nuclear program as leverage. But the U.S. invasion of Iraq seems to have hardened their conviction that the only way to protect their nation and their regime is to join the nuclear club. The North Koreans want to become a Pakistan rather than an Iraq.

Still, officials in Pyongyang hesitated to cross the provocative line of visibly demonstrating their capability. Pressure is being mounted to get them to back down from their pledge. But for a variety of reasons, they apparently believe the timing for a test is now optimal.

First of all, they hope to blame the Bush administration for their decision. In the statement issued this week, the North Korean government argued that alleged American war plans justify a nuclear test, a position that reflects the views of the North Korean military.

Second, the North anticipates the test will be successful. Although a plutonium weapon is more complicated than a uranium bomb, it is quite likely that the North now has sufficient confidence in a Nagasaki-style primitive bomb. This success would be an object of pride for an otherwise failing state, and bolster its claim to the status of a world-class military power.

Third, the North Koreans see their potential enemies tied down and unable to respond effectively. The Bush administration is locked into a disastrous war in Iraq, and about to be weakened even more if the Republicans lose the upcoming midterm elections. In South Korea, the government of President Roh Moo Hyun is already a lame duck and politically paralyzed.

Fourth, Pyongyang may bet that China and South Korea, the two principal sources of trade and economic aid, would not join the United States and Japan in any real sanctions against the North. The July missile tests by North Korea provoked international uproar and led to a U.N. resolution. But the real impact has been minimal.

Finally, the North may calculate that testing will facilitate Japan's efforts to become a "normal'' nation with a broader military role in the region. That prospect could increase tensions in Northeast Asia, especially between Japan and China, and that, the North may believe, is not necessarily bad for it.

The United States, South Korea and China must act together to show that these calculations are misguided and that the North will pay a painful price if it goes ahead. Certainly this severely tests the troubled American alliance with South Korea and the emergent partnership with China. But Pyongyang's miscalculations also offer an opportunity to repair the strained alliance and create a new structure of security cooperation in Northeast Asia.

It is no secret that Seoul and Washington have been at odds over how to deal with North Korea. But the test announcement has already accelerated a shift in South Korean opinion. Rather than holding the United States responsible for the current impasse, most Koreans now see North Korea as the instigator of crisis.

South Korean officials understand that without reinforcing the alliance now, no policy toward the North can be effective. The United States and South Korea should urgently agree on common action plans -- including a shutdown of investment and economic assistance from the South to the North -- and make those consequences clear to Pyongyang.

The planned visits of newly installed Japanese Prime Minister Shinzo Abe to Beijing and Seoul next week offer a similar opening to turn threat into opportunity. Abe intends to repair tattered ties to those Asian neighbors. Now the three Northeast Asian powers can demonstrate that a nuclear test will not lead to increased tensions but to the complete isolation of the North.

The danger of escalating actions that could lead, again, to war on the Korean peninsula is grave. The North Koreans should be assured that the door to a diplomatic solution remains open to them. But they must also understand that by profoundly misreading this moment, the North Korean leadership now stands completely alone in Northeast Asia.

Reprinted by permission.