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Gi-Wook Shin
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This essay was first published by Seoul National University's Institute for Future Strategy. You can also view the Korean version.



Technological hegemony surrounding artificial intelligence (AI) has emerged as a central facet of national economies and security. Global competition among countries and corporations to secure high-level talent has intensified into a matter of survival. Worldwide demand for AI talent now exceeds supply by more than threefold. In Silicon Valley, AI dominates the discussion, and competition among big tech firms to attract talent is escalating. Ultimately, the rivalry between the United States and China will be decided not only by capital or technology but by who succeeds in attracting and retaining global talent.

In South Korea, concerns over talent outflows from Korea are growing. Last year, Korea ranked fourth among the 38 OECD countries in terms of AI talent outflow. Compared to other advanced economies, Korea’s AI industrial ecosystem remains underdeveloped, while overseas firms offer better compensation and research environments. The recent phenomenon of 56 Seoul National University professors relocating abroad over the past four years, a “new brain drain,” must be understood in this broader structural context.

This reality is also clearly reflected in the Global Talent Competitiveness Index, published annually by INSEAD. Korea ranked 31st this year, a position disproportionately low relative to its economic standing, and fell seven places compared to two years ago. In particular, Korea performed poorly in attracting and retaining talent, ranking 55th and 37th, respectively. These findings suggest that, beyond economic incentives, social, cultural, and environmental factors play a decisive role in talent mobility.

Korea’s talent outflow is especially alarming because it coincides with record-low fertility rates and rapid population aging. Before this convergence hardens into irreversible decline, Korea must establish a Ministry of Human Resources to oversee a comprehensive national talent strategy and devise systemic measures for talent development, attraction, and utilization.
 

Talent Portfolio Theory
 

Cover of the book "The Four Talent Giants" by Gi-Wook Shin.

In a recent book published by Stanford University Press, The Four Talent Giants, I proposed a framework titled “talent portfolio theory.” Just as financial investment strategies adopt a portfolio approach, national talent strategies should also be portfolio-based, emphasizing diversification to minimize risk and continuous adjustment (rebalancing). In other words, just as financial portfolios are composed of cash, stocks, real estate, and bonds, talent portfolios consist of four elements—the “4B's”: brain train, brain gain, brain circulation, and brain linkage.

Moreover, just as investors design different portfolios, each country’s talent portfolio varies depending on its economic needs as well as cultural and institutional contexts. Japan, Australia, China, and India (all discussed in the book) include all four B's but have constructed distinct portfolios that contributed to their respective economic development. A portfolio approach transcends the traditional binary of “brain drain versus brain gain” and offers a more comprehensive and flexible framework for understanding national talent strategy, one that is particularly relevant for Korea.

First, “brain train” refers to developing domestic human resources through education and training. It is a fundamental element of any portfolio. In Japan’s portfolio in particular, homegrown talent accounts for a large share. Japan has favored domestically educated and trained talent over foreign or overseas-trained individuals, making them the backbone of its economic development.

By contrast, Australia places greater emphasis on “brain gain.” Brain gain involves importing foreign labor, and approximately 30 percent of Australia’s workforce is foreign-born. Until the 1970s, Australia upheld the “White Australia” policy, but a major shift toward multiculturalism subsequently elevated brain gain to a central position in its portfolio. Brain gain pathways include the study-to-work route, where international students remain for employment, and the work-to-migration route, where individuals enter on work visas and later settle. Australia has effectively utilized both pathways.

“Brain circulation” involves bringing back nationals who were educated or employed abroad, and it has been critical to China’s portfolio. Following China’s opening in the 1980s, Chinese nationals came to represent the largest share of participants in the global talent market, including international students. Approximately 80 percent of them returned to China after the 2000s. Known as haigui (sea turtles), these returnees played prominent roles in China’s science, technology, education, and economy, supported by numerous central and local government programs designed to promote talent circulation.

“Brain linkage” refers to those who do not return home after studying or working abroad but instead serve as bridges between their host countries and their homeland. By leveraging their local networks, social capital, they support their home country from abroad, making this a key component of India’s portfolio. India refers to them as a “brain bank” or “brain deposit,” exemplified by leaders of Silicon Valley big tech firms such as Google CEO Sundar Pichai.

However, all talent portfolios carry inherent risks. When adjustment is delayed or fails, risks can escalate into crises with negative effects on the broader economy. The experiences of the four countries illustrate this point.

Japan has faced two major risks. A talent strategy centered on domestic talent weakened its global competitiveness, while demographic decline reduced its labor pool. Although Japan actively attracted foreign students to increase brain gain, its exclusive social and cultural environment limited their integration into the workforce after graduation. While there are many reasons behind Japan’s “lost 30 years” since the 1990s, one factor was its failure to adjust a portfolio overly concentrated on domestic talent in a timely manner.

Australia has confronted rising anti-immigration sentiment and tensions with China. Public concern grew over excessive immigration and perceived threats to national identity, prompting the government to tighten immigration policies. Amid conflict with China, Australia diversified its foreign talent sources from China to India and Southeast Asia. The pandemic, which restricted cross-border mobility, dealt a severe blow to Australia’s talent attraction efforts.

In China’s case, despite aggressive brain circulation policies, top-tier global talent has remained hesitant to return, as relinquishing careers built abroad is not easy. China accordingly shifted its focus toward brain linkage for these elite individuals. At the same time, brain circulation and linkage strategies became a source of friction with the United States, and rising anti-immigration and anti-China sentiment in the U.S. and Europe reduced opportunities for study and employment abroad. Recently, China has adjusted its portfolio to strengthen domestic talent development.

India, despite its strong brain linkage, remains vulnerable to brain drain. However, as economic opportunities expand domestically, return migration has increased, gradually reshaping its portfolio composition.
 

What Should Korea’s Talent Portfolio Strategy Be?


What, then, about Korea? Let us examine Korea’s situation by comparing it with the four countries through the lens of talent portfolio theory.

Brain train: Human resources have been critical to Korea’s economic development, with the government playing a central role. Key examples include preferential policies for technical and commercial high schools during the 1970s under the Park Chung Hee administration to support industrialization, and efforts to internationalize universities in the 1990s as part of globalization. While less dominant than in Japan, brain train has constituted a significant share of Korea’s talent portfolio.

Brain gain: Korea has imported low- and semi-skilled labor from China and Southeast Asia to fill so-called 3D jobs, but attraction of global high-level talent has remained limited. As in Japan, social exclusivity and cultural barriers continue to impede integration.

Brain circulation: Comparable to China, brain circulation has played a vital role in Korea’s economic development. Overseas education and experience have carried strong premiums, and China explicitly benchmarked Korea and Taiwan when designing its own policies.

Brain linkage: Compared to brain circulation, brain linkage has, until recently, occupied a relatively small share of Korea’s portfolio.

Facing the AI era, low fertility, and the crisis of a new brain drain, what strategy should Korea pursue in the global competition for talent? As noted above, rather than fragmented and ad hoc measures, Korea must comprehensively review and continuously adjust its talent strategy through a portfolio approach.

Brain train: Korea must cultivate talent for future industries, particularly in science and engineering. Training should be aligned with AI-related fields to better match university output with corporate demand. The excessive concentration of top students in medical schools must be corrected. Support mechanisms to retain domestic talent should be strengthened. A recent Bank of Korea survey of 1,916 science and engineering master’s and doctoral degree holders working domestically found that 42.9 percent of science and engineering master’s and doctoral graduates are considering overseas employment within three years—an alarming signal. While brain train will remain vital, its relative share is likely to decline.

Brain gain: As demographic crises intensify and the share of brain train diminishes, the necessity and importance of brain gain will grow. In particular, Korea must actively utilize the more than 300,000 foreign students currently in the country as human and social capital. At present, universities focus merely on filling enrollment quotas, and most foreign students either leave Korea immediately after graduation or remain employed only briefly. This, too, constitutes a form of brain drain. To increase the share of brain gain in the portfolio, foreign students must be managed holistically from selection to graduation and employment. While immigration is ultimately inevitable, it must be approached cautiously and deliberately, considering its impact on the domestic labor market and anti-immigration sentiment. Australia’s successful experience offers useful lessons.

Brain circulation: Although it occupies a relatively modest share of Korea’s portfolio, a certain level should be maintained. With declining numbers of students studying abroad and reduced inclination among overseas Koreans to return, care must be taken to prevent a sharp drop in this component. Otherwise, Korea risks losing global competitiveness, as Japan’s experience warns.

Brain linkage: Alongside brain gain, brain linkage is crucial to Korea’s portfolio adjustment. Key target groups include departing domestic talent (the new brain drain), foreign students, and the diaspora. Although their likelihood of reemployment in Korea is low, their potential for exchange and collaboration with Korea remains open. Like India, Korea should foster and support brain linkage by treating them as a “brain bank” or “brain deposit.”
 

Toward the Establishment of a Ministry of Human Resources


At the national level, a control tower is needed to design an optimal talent portfolio and make timely adjustments. Korea should establish a Ministry of Human Resources by consolidating functions currently dispersed across the Ministry of Education (universities and graduate schools), the Ministry of Science and ICT (R&D), and the Ministry of Employment and Labor (foreign employment support). It is worth recalling that Singapore, ranked first globally in talent competitiveness, established its Ministry of Manpower early on. Expanded and reorganized from the Ministry of Labor in 1998, it played a pivotal role in transforming Singapore into a talent powerhouse. Through education and development investments, Singapore strengthened domestic talent competitiveness while opening its doors to multinational talent, and it also implemented policies to promote talent circulation and linkage. From the perspective of talent portfolio theory, Singapore represents a successful case of diversification and continuous adjustment. In the increasingly fierce global competition for talent in the AI era, nations and firms that fall behind cannot secure their future. Korea is no exception.

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Illustration of the four component of 'Talent Portfolio Theory' and technology concept.
Japan, Australia, China, and India include all four components (four B's) of a Talent Portfolio Theory – brain train, brain gain, brain circulation, and brain linkage – but have constructed distinct portfolios that contributed to their respective economic development.
Courtesy of the Institute for Future Strategy, Seoul National University.
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To survive in the global competition for talent while facing the AI era, low fertility, and the crisis of a new brain drain, South Korea must comprehensively review and continuously adjust its talent strategy through a portfolio approach.

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Encina Hall backdrop with text "A Summit Discussion with Prime Minister Kishida Fumio of Japan and President Yoon Suk Yeol of the Republic of Korea"

This event is at full capacity and has closed for registration. There is no waitlist.
No walk-ins will be accepted.

The Walter H. Shorenstein Asia-Pacific Research Center (APARC) is honored to host the Prime Minister of Japan, Kishida Fumio, and the President of the Republic of Korea, Yoon Suk Yeol, for a special summit discussion. The event co-hosts are the Freeman Spogli Institute for International Studies (FSI) and Hoover Institution.

Portraits of Prime Minister Kishida Fumio of Japan and President Yoon Suk Yeol of the Republic of Korea.


Following remarks by Prime Minister Kishida and President Yoon on the challenges and future of science and technology, they will engage in a moderated conversation with Secretary Condoleezza Rice, the Tad and Dianne Taube Director of the Hoover Institution. Discussion topics include decarbonization and clean energy, quantum technology, and startup innovation.

Speakers will also include Professors Gi-Wook Shin and Kiyoteru Tsutsui, Director and Deputy Director of APARC, respectively, and Professor Michael McFaul, Director of FSI.

This historic gathering on the Stanford campus of the leaders of the two key U.S. allies in the Indo-Pacific — a convening that would have been almost unthinkable just over a year ago — follows a period in which the two leaders have made extraordinary progress in strengthening Japan-ROK bilateral relations, and is particularly significant in the aftermath of the August 2023 Camp David U.S.-Japan-ROK trilateral summit, which has been touted as the beginning of a new era in trilateral cooperation among the three allies as they seek to advance peace and prosperity in the Indo-Pacific region.

This event is available to in-person attendees and will not be livestreamed.

When registering, please be sure to read carefully the terms and conditions for attendance.

Members of the press should follow the media advisory below. For press/media inquiries, please contact aparc-communications@stanford.edu.

We will keep registrants informed of any program revisions subject to Japanese, Korean, and U.S. government protocols.

1:00 p.m. 
Registration check-in opens

1:30 p.m.
Doors to the auditorium open

2:10 p.m.
Audience seated and doors to the auditorium close

2:30 p.m.
Event begins

Welcome
Michael McFaul
Director, Freeman Spogli Institute for International Studies
Ken Olivier and Angela Nomellini Professor of International Studies, Department of Political Science
Peter and Helen Bing Senior Fellow, Hoover Institution

Remarks
The Honorable Kishida Fumio
Prime Minister of Japan

The Honorable Yoon Suk Yeol
President of the Republic of Korea

Discussion
Moderated by 
Condoleezza Rice
Tad and Dianne Taube Director, Hoover Institution
Thomas and Barbara Stephenson Senior Fellow on Public Policy, Hoover Institution
Denning Professor in Global Business and the Economy, Stanford Graduate School of Business
Senior Fellow, by courtesy, Freeman Spogli Institute for International Studies

Q&A Session
Guided by 
Kiyoteru Tsutsui
Senior Fellow, Freeman Spogli Institute for International Studies
Professor of Sociology
Henri H. and Tomoye Takahashi Professor and Senior Fellow in Japanese Studies, Walter H. Shorenstein Asia-Pacific Research Center
Deputy Director, Walter H. Shorenstein Asia-Pacific Research Center
Director, Japan Program

Closing Remarks
Gi-Wook Shin
Senior Fellow, Freeman Spogli Institute for International Studies
Professor of Sociology
William J. Perry Professor of Contemporary Korea
Director, Walter H. Shorenstein Asia-Pacific Research Center
Director, Korea Program


Hauck Auditorium
David and Joan Traitel Building
Hoover Institution
435 Lasuen Mall
Stanford, CA 94305

Panel Discussions
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Shorenstein APARC's annual report for the academic year 2022-23 is now available.

Learn about the research, publications, and events produced by the Center and its programs over the last academic year. Read the feature sections, which look at Shorenstein APARC's 40th-anniversary celebration and its conference series examining the shape of Asia in 2030; learn about the research our postdoctoral fellows engaged in; and catch up on the Center's policy work, education initiatives, publications, and policy outreach. Download your copy or read below:

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Stanford University's Walter H. Shorenstein Asia-Pacific Research Center (APARC) is pleased to unveil the Stanford Next Asia Policy Lab (SNAPL), an interdisciplinary initiative committed to producing evidence-based, actionable policy research to facilitate structural reform and propel Asia toward a future defined by growth, maturity, and innovation. Based at APARC and led by sociologist Gi-Wook Shin, the William J. Perry Professor of Contemporary Korea and a senior fellow at the Freeman Spogli Institute for International Studies, SNAPL seeks to tackle pressing social, cultural, economic, and political challenges facing Asian countries, including aging populations, escalating inequality, brain drain, environmental threats, and institutional deficiencies in areas like the rule of law and cultural intolerance.

"SNAPL represents a significant milestone in our commitment to building research networks that engage academics, policymakers, business leaders, and civil society organizations interested in regional and global perspectives on contemporary Asia," said Shin, who is also the director of APARC and the Korea Program within APARC. “Through an interdisciplinary, solution-oriented, and comparative lens, we aim to set a research and policy agenda to help Asian nations create their unique roadmaps to becoming and remaining innovation-driven economics at the center of 21st-century dynamism and growth. At the same time, we believe that research on Asia could uncover important implications and lessons for the United States and European countries as they grapple with their own social, cultural, economic, and political challenges.”

Combining theoretical and field studies, SNAPL researchers will initially examine issues such as the prospects for reform of educational institutions, immigration policy, and cultural attitudes in Asia; paths to combating recent democratic declines; and U.S.-Asia relations. In addition to Shin, the lab director and principal investigator, the SNAPL inaugural research team includes Research Scholar Xinru Ma, Postdoctoral Fellows Gidong Kim and Junki Nakahara, Research Associates Haley Gordon and Irene Kyoung, and a cohort of Stanford undergraduate and graduate students serving as research assistants. The lab plans to continue offering fellowship and training opportunities to scholars and students.

“SNAPL’s education mission is to nurture the next generation of researchers, including students and visiting scholars, and we firmly believe that the laboratory model, proven successful in the sciences — with its mentorship and hands-on engagement — holds immense potential for nurturing talent in the social sciences,” notes Shin. “I look forward to our team’s contributions to U.S.-Asia dialogue and Asia’s security and prosperity, and I am grateful to our supporters for providing foundational funding for the lab.”

On August 29-30, 2023, SNAPL will co-host its inaugural event, the Sustainable Democracy Roundtable, jointly with the Korea Foundation for Advanced Studies and APARC's Korea Program. The two-day event will convene scholars and students from the United States and South Korea to present solutions that address global democratic backsliding, promote social progress, and advance long-term development.

For more information about SNAPL, visit the lab’s website at aparc.stanford.edu/snapl.

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Stanford Next Asia Policy Lab team members.
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Housed within the Walter H. Shorenstein Asia-Pacific Research Center, the lab will pioneer evidence-based policy research to help Asian nations forge pathways to a future characterized by social, cultural, economic, and political maturity and advance U.S.-Asia dialogue.

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Flyer for Asia in 2030, APARC@40 Conference and Celebration with an image of Encina Hall facade

The culmination of a special event series celebrating Shorenstein APARC's 40th Anniversary, "Asia in 2030, APARC@40"

Join us in celebrating APARC's 40 years of research, education, and engagement. Recognizing the accomplishments of the past four decades and looking forward to the future, the two-day program will highlight multiple aspects of APARC’s core areas of expertise and examine key forces affecting Asia’s present and shaping its future.

1-1:30 p.m.

Opening Session

Opening Remarks

Gi-Wook Shin
Director of Shorenstein APARC and the Korea Program
William J. Perry Professor of Contemporary Korea
Professor of Sociology
Senior Fellow at the Freeman Spogli Institute for International Studies
Stanford University

Congratulatory Remarks

Kathryn Ann “Kam” Moler
Vice Provost and Dean of Research
Marvin Chodorow Professor
Professor of Applied Physics, Physics, and Energy Science Engineering
Stanford University

Condoleezza Rice
Tad and Dianne Taube Director of the Hoover Institution
Senior Fellow on Public Policy at the Hoover Institution
Denning Professor of Global Business and the Economy at the Stanford Graduate School of Business
Professor of Political Science
Senior Fellow at Freeman Spogli Institute for International Studies
Stanford University

Scott D. Sagan
Co-Director and Senior Fellow at the Center for International Security and Cooperation
Caroline S.G. Munro Professor of Political Science
Mimi and Peter Haas University Fellow in Undergraduate Education
Senior Fellow at the Freeman Spogli Institute for International Studies
Stanford University


1:30-2:45 p.m. 

The Future of Diplomacy

John Everard
Former Ambassador to Belarus, Uruguay, and North Korea for the United Kingdom
Coordinator of the UN Security Council’s Panel of Experts on North Korea
Former Pantech Fellow at Shorenstein APARC

Laura Stone
Former U.S. Deputy Assistant Secretary of State for India, Nepal, Sri Lanka, Bangladesh, Bhutan, and Maldives
Former Acting Deputy Assistant Secretary for China and Mongolia;
Former Director of the Office of Chinese and Mongolian Affairs
Former Director of Economic Policy Office in the Bureau of East Asia and Pacific Affairs
Visiting Scholar and Inaugural China Policy Fellow at Shorenstein APARC at Stanford University

Moderator

Michael Beeman
Former Assistant U.S. Trade Representative for Japan, Korea, and APEC at the Office of the U.S. Trade Representative
Visiting Scholar at Shorenstein APARC
Stanford University


2:45-3 p.m. ~ Coffee and Tea Break


3-4:15 p.m.

The Future of Asian Studies

Panelists

Donald K. Emmerson
Director of the Southeast Asia Program at Shorenstein APARC
Affiliated Faculty with the Center on Democracy, Development, and the Rule of Law
Affiliated Scholar with the Abbasi Program in Islamic Studies
Senior Fellow Emeritus at the Freeman Spogli Institute for International Studies
Stanford University

Thomas B. Gold
Professor of Sociology
University of California, Berkeley

Jisoo Kim
Korea Foundation Associate Professor of History, International Affairs, and East Asian Languages and Literatures
Director of the Institute for Korean Studies
Co-Director of the East Asia National Resource Center
The George Washington University

Moderator

Kiyoteru Tsutsui
Deputy Director of Shorenstein APARC
Director of the Japan Program
Henri H. and Tomoye Takahashi Professor and Senior Fellow in Japanese Studies
Professor of Sociology
Senior Fellow at the Freeman Spogli Institute for International Studies
Stanford University


4:15-4:30 p.m. ~ Coffee and Tea Break


4:30-6 p.m.

Oksenberg Panel: The Future of U.S.-China Relations

Introduction

Jean C. Oi
Director of the China Program at Shorenstein APARC
Lee Shau Kee Director of the Stanford Center at Peking University
William Haas Professor of Chinese Politics
Senior Fellow at the Freeman Spogli Institute for International Studies
Stanford University

Panelists

M. Taylor Fravel
Arthur and Ruth Sloan Professor of Political Science and Director, Security Studies Program
Massachusetts Institute of Technology

David Michael Lampton
Professor Emeritus and former Hyman Professor and Director of SAIS-China and China Studies, School of Advanced International Studies at John Hopkins University
Former Oksenberg-Rohlen Fellow at Shorenstein APARC

Oriana Skylar Mastro
Center Fellow at the Freeman Spogli Institute for International Studies
Stanford University

Moderator

Thomas Fingar
Former U.S. Department of State Assistant Secretary of the Bureau of Intelligence and Research, Deputy Assistant Secretary for Analysis, Director of the Office of Analysis for East Asia and the Pacific, and Chief of the China Division
Former Deputy Director of National Intelligence for Analysis and Chairman of the National Intelligence Council
Fellow at Shorenstein APARC
Stanford University
 

Conferences
Paragraphs
Cover of book "Drivers of Innovation"

Innovation and entrepreneurship rank highly on the strategic agenda of most countries today. As global economic competition intensifies, many national policymakers now recognize the central importance of entrepreneurship education and the building of financial institutions to promote long-term innovation, entrepreneurship, and economic growth. Drivers of Innovation brings together scholars from the United States and Asia to explore those education and finance policies that might be conducive to accelerating innovation and developing a more entrepreneurial workforce in East Asia. 

Some of the questions covered include: How do universities in China and Singapore experiment with new types of learning in their quest to promote innovation and entrepreneurship? Is there a need to transform the traditional university into an “entrepreneurial university”? What are the recent developments in and outstanding challenges to financing innovation in China and Japan? What is the government’s role in promoting innovative entrepreneurship under the shadow of big business in South Korea? What can we learn about the capacity of services to drive innovation-led growth in India? 

Drivers of Innovation will serve as a valuable reference for scholars and policymakers working to develop human capital for innovation in Asia.

Contents

  1. Educating Entrepreneurs and Financing Innovation in Asia 
    Fei Yan, Yong Suk Lee, Lin William Cong, Charles Eesley, and Charles Lee
  2. Fostering Entrepreneurship and Innovation: Education, Human Capital, and the Institutional Environment 
    Charles Eesley, Lijie Zhou, and You (Willow) Wu
  3. Entrepreneurial Scaling Strategy: Managerial and Policy Considerations 
    David H. Hsu
  4. Innovation Policy and Star Scientists in Japan 
    Tatsuo Sasaki, Hiromi S. Nagane, Yuta Fukudome, and Kanetaka Maki
  5. Financing Innovation in Japan: Challenges and Recent Progress 
    Takeo Hoshi and Kenji Kushida
  6. Promoting Entrepreneurship under the Shadow of Big Business in Korea: The Role of the Government 
    Hicheon Kim, Dohyeon Kim, and He Soung Ahn
  7. The Creativity and Labor Market Performance of Korean College Graduates: Implications for Human Capital Policy 
    Jin-Yeong Kim
  8. Financing Innovative Enterprises in China: A Public Policy Perspective 
    Lin William Cong, Charles M. C. Lee, Yuanyu Qu, and Tao She
  9. Forging Entrepreneurship in Asia: A Comparative Study of Tsinghua University and the National University of Singapore 
    Zhou Zhong, Fei Yan, and Chao Zhang
  10. Education and Human Capital for Innovation in India’s Service Sector 
    Rafiq Dossani
  11. In Need of a Big Bang: Toward a Merit-Based System for Government-Sponsored Research in India 
    Dinsha Mistree
  12. The Implications of AI for Business and Education, and Singapore’s Policy Response 
    Mohan Kankanhalli and Bernard Yeung

 

 

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Entrepreneurship, Education, and Finance in Asia

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Yong Suk Lee
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Book cover showing a robotic hand holding an older human hand.

Demographic transition, along with the economic and geopolitical re-emergence of Asia, are two of the largest forces shaping the twenty-first century, but little is known about the implications for innovation. The countries of East Asia have some of the oldest age structures on the planet: between now and 2050, the population that is age 65 and older will increase to more than one in four Chinese, and to more than one in three Japanese and Koreans. Other economies with younger populations, like India, face the challenge of fully harnessing the “demographic dividend” from large cohorts in the working ages.

This book delves into how such demographic changes shape the supply of innovation and the demand for specific kinds of innovation in the Asia-Pacific. Social scientists from Asia and the United States offer multidisciplinary perspectives from economics, demography, political science, sociology, and public policy; topics range from the macroeconomic effects of population age structure, to the microeconomics of technology and the labor force, to the broader implications for human well-being. Contributors analyze how demography shapes productivity and the labor supply of older workers, as well as explore the aging population as consumers of technologies and drivers of innovations to meet their own needs, as well as the political economy of spatial development, agglomeration economies, urban-rural contrasts, and differential geographies of aging.

Desk, examination, or review copies can be requested through Stanford University Press.

Table of contents and chapter 1, introduction
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The COVID-19 pandemic has disrupted economies and expectations for economic growth and development the world over. But even before the pandemic, Asian economies were reassessing their growth strategies.

In a podcast conversation about the new edited volume Shifting Gears in Innovation Policy: Strategies from Asia, APARC's Korea Program Deputy Director Yong Suk Lee discusses some of the impediments Asian countries face in trying to encourage economic development and entrepreneurship, but also the inherent strengths that could allow innovative strategies take hold and grow in East Asia. Listen to the full conversation below.

[Subscribe to APARC's newsletters to get the latest updates from our scholars.]

Edited by Lee, Gi-Wook Shin, and Takeo HoshiShifting Gears in Innovation Policy is the first of three volumes resulting from APARC's Stanford Asia-Pacific Innovation project that produces policy research to promote innovation and entrepreneurship in East Asia and the greater Asia-Pacific region.

Lee explains, “Many Asian countries achieved economic growth by importing new technologies from advanced economies like the U.S., using them very effectively, and then expanding exports. But now where East Asia stands, many of these countries have already successfully caught up to the technological frontier of advanced economies, so if they want to maintain growth, there needs to be a shift in their strategies.”

The shift Lee and the other volume authors propose is one towards economic growth that is driven by innovation and entrepreneurship rather than the ‘catch-up’ model that Asian economies have commonly relied on. Unlike startup hubs such as the San Francisco Bay Area of California, Asian countries often lack an entrepreneurial tradition because of antagonistic financial structures and differences in cultural definitions of success. These additional financial and social risks have cast entrepreneurial endeavors in an unattractive light for multiple generations of workers.

But encouraging entrepreneurship and endemic innovation are crucial to maintaining stable economic growth. With rapidly aging populations, greater interconnections in both trade and diplomacy, and transformation in the workforce, workplace, and work itself, effectively adapting development strategies to meet present and future challenges remains a central priority for East Asia policymakers and innovators alike. As Lee advises, “There’s strong infrastructure in East Asia, both physically and digitally, which is a great advantage. But they’re now at a frontier with no trajectory to follow, and there needs to be indigenous growth and continuous innovation in order to not be surpassed by competitors.”

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University Entrepreneurship Programs May Not Increase Entrepreneurship Rates, Stanford Researchers Find

A study by Yong Suk Lee, the deputy director of APARC’s Korea Program, and Management Science and Engineering professor Charles Eesley investigates the efficacy of two major Stanford entrepreneurship education initiatives, suggesting they may not increase entrepreneurial activity.
University Entrepreneurship Programs May Not Increase Entrepreneurship Rates, Stanford Researchers Find
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APARC Offers Fellowship and Funding Opportunities to Support, Diversify Stanford Student Participation in Contemporary Asia Research

The Center has launched a suite of offerings including a predoctoral fellowship, a diversity grant, and research assistant internships to support Stanford students interested in the area of contemporary Asia.
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Shifting Gears in Innovation Policy: Strategies from Asia
'Shifting Gears in Innovation Policy: Strategies from Asia,' is now available.
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Yong Suk Lee explains in the new volume, Shifting Gears in Innovation Policy, that while ‘catch-up’ strategies have been effective in promoting traditional economic growth in Asia, innovative policy tools that foster entrepreneurship will be needed to maintain competitiveness in the future.

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Cover of the book 'Shifting Gears in Innovation Policy' on the background of an embossed map of Asia.

In the six Asian countries focused on in this book—China, India, Japan, Singapore, South Korea, and Taiwan—high economic growth has been achieved in many industrial sectors, the catch-up phase of growth has ended or is about to end, and technological frontiers have been reached in many industries. These countries can no longer rely on importing or imitating new technology from abroad and expanding imports, and instead have to develop their own innovations to maintain growth. The policy tools they often used to advance "innovation," for the most traditional industrial policies of identifying promising industries and promoting them, will no longer be effective. And indeed, governments in Asia have recently put forward new policies, such as China's push for mass entrepreneurship and innovation.

Domestic conditions in Asian economies have also started to change. Many countries are facing rapidly aging populations and low birth rates: Japan’s population, declining for several years, is the first population decline not caused by war or disease in the modern world; South Korea’s labor force started to shrink in 2018 as well; China’s huge population will start to age, even as a large part of the population remains poor.

Facing these challenges, today Asia is at a turning point. East Asia as a whole has greater real economic output than North America, South and Southeast Asia possess enormous economic potential due to size and resources, and countries within Asia are becoming more connected in both trade and diplomacy. It is at this juncture that the authors of Shifting Gears examine and reassess Asia’s innovation and focus on national innovation strategies and regional cluster policies that can promote entrepreneurship and innovation in the larger Asia-Pacific. Chapters explore how institutions and policies affect incentives for innovation and entrepreneurship; whether Asia's innovation systems are substantially different from those of other countries, and in which ways, and whether there are any promising strategies for promoting innovation.

Desk, examination, or review copies can be requested through Stanford University Press.

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Books
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Strategies from Asia

Authors
Yong Suk Lee
Gi-Wook Shin
Book Publisher
Shorenstein APARC
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Yong Suk Lee and Charles Eesley examine how university entrepreneurship programs affect entrepreneurial activity using a unique entrepreneurship‐focused survey of Stanford alumni. OLS regressions find a positive relationship between program participation and entrepreneurship activities. However, endogeneity hinders causal interpretation. They utilize the fact that the entrepreneurship programs were implemented at the school level.

Using the introduction of each school's program as an instrument for program participation, they find that the Business School program has a negative to zero impact on entrepreneurship rates. Participation in the Engineering School program has no impact on entrepreneurship rates. However, the Business School initiative decreases startup failure and increases firm revenue. University entrepreneurship programs may not increase entrepreneurship rates, but help students better identify their potential as entrepreneurs and improve the quality of entrepreneurship.

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Journal Articles
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Journal Publisher
Strategic Management Journal
Authors
Yong Suk Lee
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