Chris Farrell: Remember the dot-com boom of the 1990s? It seemed as if every entrepreneur with a good idea and a PC could challenge established companies for customers. Brick-and-mortar companies jumped on the e-commerce bandwagon. The demand for digital workers soared. Long-time computer professionals hopped from job to job, pulling down more money with every employer. Newly minted college graduates juggled multiple job offers. But when the Y2K problem emerged in the latter part of the '90s business and government quickly realized there still weren't enough IT workers on hand to find and repair the computer glitch. The quick fix? Hire computer professionals overseas. And that temporary solution permanently changed the global economy.

Paul Saffo: Y2K was huge in getting the ball rolling on offshoring.

Farrell: Paul Saffo is director of the Institute for the Future, a high-tech think tank in Silicon Valley.

Saffo: But once they went overseas, they discovered it's not just a matter of cost. These programmers overseas are often better than the best you can get in the United States.

Farrell: Ireland, the Philippines, and Israel were among the more popular destinations for offshoring Y2K programming fixes. But India became the offshore capital. It had plenty of high-tech companies staffed with well-educated English speaking digital workers. Thanks to India's steep import barriers in the 1980s, no one could afford new computer systems. So Indian tech workers were the world's leading experts in the older software languages that needed upgrading. Suhas Patil is chairman emeritus of semiconductor maker Cirrus Logic.

Suhas Patil: And they were listening to their customers and what their needs were, and as the recognition came that systems had to be upgraded to not have the problem based on the Y2K issues, that's how they got their break.

Farrell: And made the most of the opportunity. AnnaLee Saxenian is Dean of the School of Information Management and Systems at the University of California, Berkeley.

AnnaLee Saxenian: I think the importance of Y2K was overwhelmingly about establishing Indian companies' reputation among US customers and helping begin a set of customer supplier relationships that have simply taken off in the last four years.

Farrell: Of course, Y2K contracts ended in 2000. Yet many Indian companies took advantage of their now sterling programming reputations to negotiate for more sophisticated work. Research. Software development. Accounting services. Long-distance medical advice. Rafiq Dossani is a senior research scholar at Stanford University.

Rafiq Dossani: India is now growing at 70-80 per cent a year in offshored services ... services which are maintaining an accounting system, maintaining an HR system, doing claims processing, that's growing easily at 70 per cent, maybe even higher.

Farrell: Offshore also came onshore during Y2K. The town of Mountain View lies at the heart of California's Silicon Valley. Housed in one of the many nondescript low-rise office buildings that crowd the region's business avenues is the Indus Entrepreneur, or TIE. It is a networking base for the Indian high-tech Diaspora.

Shankar Muniyappa: Y2K was a big opening as early as 98.

Farrell: Shankar Muniyappa is director of information systems for TIE. He came to America for Y2K-and stayed.

Muniyappa: Myself and many of us believe still believe this is the place where you need to be if you want to be middle of innovation.

Farrell: Some 30,000 Indian IT professionals now live and work in the Valley. Rafiq Dossani of Stanford University:

Dossani: At least 25 per cent of the start ups have Indian employees at fairly senior levels working for them. And ... there's a whole infrastructure therefore being built around them because it's a substantial number now, so you see shopping malls you see business services and so on catering to this particular immigrant community.

Farrell: That community is adding vitality to the American economy. Still, many American high-tech workers are threatened by the offshoring of white collar jobs. The numbers are murky, but according to Mark Zandi of Economy.com 370,000 non-manufacturing jobs moved overseas over the past fours years-with most of the information technology jobs going to India. Salaries are down too. Still, the big factor behind the loss of 1.5 million jobs lost since Y2K is improved business efficiency or productivity - not offshoring. And Y2K also played an important role in boosting business efficiency.

Economists initially looked at Y2K as a productivity killer.

Imagine a town threatened by a rising river. Every able-bodied person in town is put to work stacking sandbags. It's necessary work to save the town - but it's unproductive work. Nothing gets built. No food gets grown.

With the Y2K bug, programmers, chief information officers, project managers, and other digital workers were getting paid to do unproductive work - stacking sandbags of silicon. No innovative investments. No new productivity enhancing software.

But economists were wrong. Y2K wasn't a flood. Instead, think of it as clearing a path choked with underbrush. Once the trail is open, it is much easier to zip from point A to point B. Y2K gave companies an excuse to clean up their software and hardware underbrush - a critical factor in today's improved business productivity. Paul Saffo:

Saffo: A lot of companies said well, gosh, if we're going to have to spend all this money to fix our software let's also see what else we can do at the same time, so it was an invitation to replace a whole bunch of stuff. ... So it forced people to ask hard questions about how they were using things and in the best instances people really did become more efficient.

Farrell: The result? Companies used the new systems they installed to cut costs and work smarter - and hire fewer workers.

[Voice of Leonard Nimoy: "Do you have hard copies of all your important documents ... such as bank statements."]

That's Leonard Nimoy, Mr. Spock from Star Trek. He's narrating the Y2K Family Survival Guide video - one of thousands of products peddled by prophets of doom. Y2K did bring home how reliant we all are on computers. Many of us still don't back up critical data at home. The same isn't true for business and government. Many learned from Y2K just how vulnerable information systems are to a malicious attack or unforeseen disaster. Case in point: Y2K actually helped some businesses survive 9/11.

[News broadcast of President George W. Bush: "I've directed the full resources of intelligence and law enforcement communities to find those responsible and bring them to justice."]

The attack on the World Trade Center stopped trading on the New York Stock Exchange. Against the odds, that citadel of capitalism opened six days later.

John Koskinen: The reason the markets, securities markets, were able to open the Monday after the Tuesday of 9-11 was they still had the test scripts that had been developed in 1998 and 99.

Farrell: John Koskinen credits preparations for Y2K. He was President Clinton's Y2K czar.

Koskinen: ... they were able to in effect take all of those Y2K scripts and make sure that all the transactions with all of the major players would close. Without that they never would have been able to do it in the time frame with the confidence they had.

Farrell: A record 2.4 billion shares traded on the New York Stock Exchange the day it reopened.

Y2K was a unique economic event. Earlier jolts to the economy, like the 1973 oil price hike and the 2001 attack of 9/11, were shocks. But the Year 2000 arrived right on schedule. The surprise was how little immediate impact the much-feared transition had on the economy. Yet we're still living and working with the economic impact of Y2K five years later.

For Marketplace and American RadioWorks, I'm Chris Farrell.

The Presidential election campaign is in the home stretch. Neither the President nor Senator Kerry has secured a decisive advantage.

Iraq is now the central issue of debate, as one would expect, since the war is going badly, and the economy is reasonably robust. The debate is finally beginning to focus on substantive differences between the candidates after a summer in which they mainly exchanged personal attacks on their respective Vietnam records. Their strategies are now clear: Bush will challenge Kerry's steadiness and consistency; Kerry will challenge the necessity of the campaign in Iraq and the competence of the administration's efforts there. But while their diagnoses of the situation differ, their proposals for dealing with what is clearly a mess are not so clearly differentiated. Both propose to seek additional help from members of the international community; both emphasize the need to train and arm Iraqi security forces; and both are hopeful that elections will enhance the legitimacy of Iraqi leaders, fortify their efforts to dry up the insurgency, and allow American forces to be reduced and eventually withdrawn.

Historically, wars have been unkind to presidents on whose watch they occurred. The Korean War reduced Harry Truman's popularity so dramatically by 1952 that he gave up his quest for a second full term. The Vietnam War drove Lyndon Johnson from office, despite impressive domestic achievements. Victory in the Gulf War of 1991 sent George H.W. Bush's approval ratings soaring, but within a year he was defeated by an obscure Arkansas governor.

Yet President Bush still clings to a narrow lead in the polls. Why?

Senator Kerry has argued that the Iraqi campaign is a "war of choice." Perhaps so. But Osama bin Laden issued a fatwa declaring war on the United States nearly a decade ago. Whatever the outcome in Iraq, war with Islamic extremists will continue. And American voters remain nearly evenly divided as to whether John Kerry has the steadfast character and consistent judgment they want in a wartime leader.

Uneasiness about the financial and human costs of the war is growing. Casualty figures in Iraq are high compared to the numbers killed or wounded in post-cold war American interventions in Somalia, Haiti, Bosnia, and Kosovo. Yet, those earlier conflicts involved humanitarian interventions in which Americans perceived little strategic stake. However, military personnel killed in Iraq - now more than 1000 - still number less than a third of the civilians who perished in New York and Washington on 9/11. And ours is a volunteer military that is highly motivated.

When confronted by an attack, Americans have consistently taken the fight to the enemy, engaging them in combat as far from our shores as possible. The president has portrayed the campaign in Iraq as an integral feature of the war on terrorism. To at least a number of voters, the absence of any terrorist attacks in the United States since 9/11 provides evidence that his approach, while not without significant costs, is working.

Victory at the polls may be a dubious prize. Whoever is sworn in on January 20, 2005 will face daunting choices. American options in Iraq range from the "potentially disastrous" to the "extremely distasteful." We cannot simply walk away. And a host of other dilemmas - e.g. nuclear crises in Iran and North Korea, a Middle East peace process that has gotten off track, strains in the trans-Atlantic relations, a multilateral trade round that has lost momentum - demand urgent attention. Beyond this, the next president will be hampered by a gigantic fiscal deficit and a military that is stretched thin. In short, he will have few easy choices. It makes one wonder why politicians yearn for this job.

Donald K. Emmerson, director of Stanford University's Southeast Asia Program, said elements within the Indonesian military have "a reputation for corruption and brutality" and, in East Timor and Papua, have shown a "willingness to work with what might be called entrepreneurs of violence."

Though he said he could not confirm the presence in Aceh of the Laskar Merah Putih militia, he said, "It would be a worst-case scenario if someone in the military were trying to use militias to help carry out repression."

Washington -- For the two regions hit hardest by the Asian tsunami waves, international relief efforts are being complicated by more than the rising death tolls and physical devastation -- they are also war zones.

In the Indian Ocean nation of Sri Lanka and Indonesia's western Aceh province, bitter conflicts threaten to slow even further the painstaking work of locating victims, repairing infrastructure and caring for hundreds of thousands of refugees, according to relief workers and regional experts.

The Sri Lankan government and the rebel Tamil Tigers, which have fought a two-decade civil war, Tuesday traded barbs over the relief efforts and refused to work together -- and instead launched competing efforts.

Across the Indian Ocean, at the northern tip of Sumatra Island in Indonesia, the province of Aceh has been a no-go zone for most international aid organizations and journalists since May 2003, when a new government crackdown was launched in the 28-year struggle against the Free Aceh Movement.

Aid organizations scrambled to get into Aceh while former residents seeking to go back to find relatives complained Tuesday that the Indonesian government, which has been accused of widespread human rights violations in the area, continued to limit access, providing only two-week visas.

Academic analysts expressed hope that the tsunami tragedy might spur some badly needed progress in the two conflicts by creating opportunities for humanitarian cooperation. But at least in the short term, the warring factions were jockeying for advantage -- and in the process slowing rescue and relief efforts and putting more lives at risk.

"The contending sides, both in Sri Lanka and Aceh, are racing to provide relief," said Donald Emmerson, a senior fellow at Stanford University's Institute for International Studies and director of the Southeast Asian Forum.

"At stake is the legitimacy of the government on the one hand -- Colombo and Jakarta -- and the Tamil Tigers and the Free Aceh Movement on the other. If the response of the Sri Lankan and Indonesian governments is insufficient, there could be a crisis of legitimacy in those two areas, which have been engaged in civil war for some decades," he said.

In Sri Lanka, the minority Tamils, who are Hindu, have waged civil war against the country's majority Buddhists since 1983, and a 2002 cease-fire remains brittle. "Tens of thousands have died in an ethnic conflict that continues to fester" since the cease-fire, according to an unclassified report by the CIA.

The Tamil rebels control much of the country's north and east, including coastal areas severely damaged by the tsunami. The Tamil Tigers are conducting their own relief efforts and have made separate appeals to donor countries and the United Nations for assistance.

Even the immense scale of the tsunami damage did not appear to tamp down the deep-seated atmosphere of confrontation.

The Tamil Rehabilitation Organization said in a statement that "assistance channeled through the government of Sri Lanka has failed to reach the displaced in the northeast." It said that one-fourth of the people killed in the northeast were in Tamil-controlled areas.

A military spokesman, Brig. Daya Ratnayake, responded that the government was doing everything it can to help those affected in government-controlled areas and criticized the rebels for trying to score points amid the suffering.

In Aceh, where rebels are waging a fight for independence, there were some hopeful signs in the face of the horrific destruction. The Indonesian government and the Free Aceh Movement reportedly agreed to a cease-fire Tuesday to let aid efforts reach those in need.

However, aid officials worried that it would take days to get assistance to Aceh, where the majority of Indonesia's deaths occurred. And they said the conflict already has constrained aid efforts by limiting access to the region.

"International nongovernmental organizations have not been allowed into the conflict area since May 2003," said Michael Beer of the Washington-based Nonviolence International, whose field office in the provincial capital of Banda Aceh was lost, along with three of its four staff members. "This has hampered efforts already. The conflict has set back the international community, because they are starting from zero and have been excluded for political reasons."

"Even without the rebellion it is a tough area for the government to go in," said Blair King of the National Democratic Institute for International Affairs, a nonprofit in Washington. "That is exacerbated by the political situation."

The Stanford Project on Regions of Innovation and Entrepreneurship (SPRIE) is a multidisciplinary research program of the Asia-Pacific Research Center (APARC) at Stanford University which focuses on innovation and entrepreneurship in leading high technology regions in the United States and Asia. SPRIE has an active community of scholars at Stanford as well as research affiliates in the United States, China, Taiwan, Japan, Korea, Singapore, and India.

New Fellowships

As part of a new initiative on Greater China, SPRIE will select two outstanding post-docs or young scholars as the inaugural SPRIE Fellows at Stanford for the academic year 2005-2006 for research and writing on Greater China and its role in the global knowledge economy. The primary focus of the program is the intersection of innovation and entrepreneurship and underlying contemporary political, economic, technological, and/or business factors in Greater China (including Taiwan, Mainland China, Singapore). Topics of particular interest include, but are not limited to, university-industry linkages, globalization of R&D, venture capital industry development, networks and flows of managerial and technical leaders, and leading high technology clusters in Greater China. Industries of ongoing research at SPRIE include semiconductors, wireless, and software.

SPRIE Fellows at Stanford will be expected to be in residence for at least three academic quarters, beginning the Fall quarter of 2005. Fellows take part in Center activities, including research forums, seminars, and workshops throughout the academic year, and are required to present their research findings in SPRIE seminars. They will also participate as members of SPRIE's team in its public and invitation-only seminars and workshops with academic, business, and government leaders. Fellows will also participate in the publication programs of SPRIE and APARC. The Fellowship carries a stipend of $40,000.

How To Apply

Applicants should submit

1. A statement of purpose not to exceed five single-spaced pages which describes the research and writing to be undertaken during the fellowship period, as well as the projected product(s) that will be published;
2. a curriculum vitae (with research ability in Chinese preferred); and
3. 2 letters of recommendation from faculty advisors or other scholars. All applicants must have Ph.D. degrees conferred by August 30, 2005.

Address all applications to:

Stanford Project on Regions of Innovation and Entrepreneurship,
Asia-Pacific Research Center,
Encina Hall -East 301,
Stanford University,
Stanford, California
USA 94305-6055

Questions? Please contact Rowena Rosario, Administrative Associate

Deadline for receipt of all materials: January 14, 2005

Applicants will be notified of fellowship decisions in March 2005

Focus on Innovation and Entrepreneurship in Greater China

SPRIE is a multidisciplinary research program at Stanford University which focuses on innovation and entrepreneurship in leading high technology regions in the United States and Asia. SPRIE has an active community of scholars at Stanford as well as research affiliates in the United States, Mainland China, Taiwan, Japan, Korea, Singapore, and India. During 2005, SPRIE is expanding a new initiative on the rise of leading high technology regions in Greater China and their impact on the global knowledge economy. Specific research topics include university-industry linkages for commercialization of technology, globalization of R&D, venture capital industry development and its impact on new venture formation, and networks and flows of managerial and technical leaders. In addition, industries of ongoing research at SPRIE include semiconductors, wireless, and software.

New SPRIE Research Fellows: Research Assistantships with Support for International Field Research

As part of this new initiative on innovation and entrepreneurship in Greater China, SPRIE will select outstanding Stanford students as the inaugural SPRIE Research Scholars. SPRIE Research Scholars will work with SPRIE faculty and senior researchers at Stanford for two (or more) academic quarters in 2005 to gather and analyze data, conduct interviews in Silicon Valley, contribute to publications, and advance progress on the overall project agenda. During summer 2005, they will conduct SPRIE field research through interviews or surveys with business and government leaders in Beijing, Shanghai, or Hsinchu. As part of SPRIE's international research team, they will have the opportunity to interact closely with project leaders and visiting scholars at Stanford as well as partners in Asia, such as the Ministry of Science and Technology, Tsinghua University, or Zhongguancun Science Park in Mainland China or the Industrial Technology Research Institute (ITRI) in Taiwan. They will also participate in SPRIE's public and invitation-only seminars and workshops with academic, business, and government leaders. The financial award will include RA support at 15-20 hours/week (or equivalent) plus summer stipend to cover travel, living expenses, and research.

How To Apply (limited to current Stanford graduate students and exceptional seniors and juniors)

Successful candidates will have demonstrated a track record of superior analytical ability, strong oral and written communication skills (including full fluency in English and Chinese), knowledge of high technology and entrepreneurship, high motivation, and willingness to be part of a dynamic international research team.

Applicants should submit

1) A brief statement (not to exceed one single-spaced page) which describes the candidate's interests and skills,

2) a curriculum vitae, and

3) contact information for 2 references, preferably recent professors, advisors, or employers

Send applications to

SPRIE

Encina Hall East 301

Stanford University

Stanford, CA 94305-6055

Questions? Please contact Wena Rosario, Administrative Associate.

Deadline for receipt of all materials: December 31, 2005

Applicants will be notified of decisions in January 2005.