FSI researchers consider international development from a variety of angles. They analyze ideas such as how public action and good governance are cornerstones of economic prosperity in Mexico and how investments in high school education will improve China’s economy.
They are looking at novel technological interventions to improve rural livelihoods, like the development implications of solar power-generated crop growing in Northern Benin.
FSI academics also assess which political processes yield better access to public services, particularly in developing countries. With a focus on health care, researchers have studied the political incentives to embrace UNICEF’s child survival efforts and how a well-run anti-alcohol policy in Russia affected mortality rates.
FSI’s work on international development also includes training the next generation of leaders through pre- and post-doctoral fellowships as well as the Draper Hills Summer Fellows Program.
How does Silicon Valley Evaluate Foreign Education and Experience? The Fourth Annual Globalization of Services Conference
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How does Silicon Valley Evaluate Foreign Education and Experience? The Fourth Annual Globalization of Services Conference
Related Multimedia
How does Silicon Valley Evaluate Foreign Education and Experience? The Fourth Annual Globalization of Services Conference
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A Stake in the Heart of Lipset's Law? Indonesia versus Modernization Theory
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Seymour Martin Lipset famously claimed that the more well-to-do a nation is, the greater the chance that it will sustain democracy. This "law" fits the experience of several countries in Northeast and Southeast Asia. Formerly authoritarian South Korea and Taiwan grew rich and became stable democracies with active civil societies, as Lipset would have expected. His "law" fits the Philippines and Thailand as well- -poor countries with tenuous holds on democracy where uncivil societies have mobilized to defend elite hegemony against mass-based electoral challenges.
The case of Indonesia, in contrast, limits Lipset's Law. Poor yet stably democratic, Indonesia is free of regime-threatening social conflicts. Arguably, despite its poverty, its democracy is already consolidated. India's record of sustaining democracy is another case in point. These poor yet successfully democratic polities amount to large stakes in the heart of modernization theory.
Prof. Thompson will contend that Indonesia's democracy is neither middle-class-based nor dominated by big business, but is instead still characterized by traditional cross-cutting ethno-religious cleavages that limit the impact of money politics, reduce the risk of populism, foster elite consensus, and thereby encourage democratic stability. He will link his argument not only to Lipset's Law but to the intellectual legacies of Alexis de Tocqueville, Antonio Gramsci, and Barrington Moore among other students of democracy and modernity.
Mark R. Thompson is a professor of political science at the University of Erlangen-Nuremberg in Germany. A Chicago native, he took his first degree in religious studies at Brown University followed by postgraduate work at Cambridge University and the University of the Philippines. Fascinated by Philippine people power, he wrote his dissertation at Yale University on the anti-Marcos struggle (Yale University Press, 1996). After moving to Germany, he witnessed popular uprisings in East Germany and Eastern Europe, inspiring him to conceptualize democratic revolutions in essays later published as a book (Routledge, 2004). He is in residence at Stanford from February through April 2009.
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Mark Thompson
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
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mrthom@stanford.edu
MarkThompson[1].JPG
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Professor Thompson builds on Barrington Moore's insight that there are different "paths to the modern" world. Thompson's manuscript explores alternatives to the familiar South Korean-and Taiwan-based model of "late democratization." According to that model, political pluralism follows a formative period of economic growth during which labor is demobilized and big business, religious leaders, and professionals depend upon and are co-opted by the state.
Thompson argues that even when these preconditions are in place, democratization need not follow. Singapore is an illuminating case in point. The autocratic growth model pays insufficient attention to politics, including the sometimes crucial role of student activists in challenging developmental authoritarianism and triggering a democratic transition, as in Indonesia. As political actors, students (rather than a progressive bourgeoisie) may fill the oppositional vacuum created by the preconditions that characterized predemocratic South Korean and Taiwan.
In his critique of Northeast Asian-style, post-authoritarian "late democratization" and its emphasis on economic growth as the driver of political change, Professor Thompson uses evidence drawn from paired comparisons of Vietnam with China, Hong Kong with Singapore, and between South Korea and Taiwan on the one hand and other major Southeast Asian cases on the other.
Mark R. Thompson is a professor of political science at the University of Erlangen-Nuremberg in Germany. A Chicago native, he took his first degree in religious studies at Brown University followed by postgraduate work at Cambridge University and the University of the Philippines. Fascinated by Philippine people power, he wrote his dissertation at Yale University on the anti-Marcos struggle (Yale University Press, 1996). After moving to Germany, he witnessed popular uprisings in East Germany and Eastern Europe, inspiring him to conceptualize democratic revolutions in essays later published as a book (Routledge, 2004). He is in residence at Stanford as Lee Kong Chian Distinguished Fellow in Southeast Asian Studies from February through April 2009.
Lee Kong Chian NUS-Stanford Distinguished Fellow on Southeast Asia
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March 2009 Dispatch - Venture Capital in China and India - A Comparison
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Venture capital (VC) investment provides a unique mechanism for gauging the technological and entrepreneurial sophistication of a national economy. It is no surprise, then, that the two giants of Asia—China and India—have rapidly become important destinations for VC investment. The latest data available from Ernst & Young reveals an astonishing development: China received more VC investment than any nation except the United States. India, though lagging behind China, still received $862 million. To compare, over $30 billion in VC money was invested in the United States in 2007; $823 million was invested in Canada. Clearly, China and India are becoming nodes for the global VC practice. Many of the largest and most prestigious Silicon Valley VC firms have established significant presences in both nations.
China and India differ in many ways, but with respect to the development of VC they share important characteristics. Until late 2008, both nations had rapidly growing consumer economies. The Chinese and Indian governments and populations both agree that education—and particularly engineering—is critical to their future. Both China and India are leaders in sending their graduate students abroad, which has created a pool of well-trained nationals overseas who can advise their peers at home, or even return home themselves to set up new ventures. Many of these Chinese and Indian nationals have worked in U.S. sciences and engineering-based firms. Such professional experience, especially during the last two decades, has laid the basis for successful technology-based entrepreneurship, and the growth in VC that accompanies it.
When VC investing is viewed globally, U.S. dominance is unquestioned. In the United States, 30–35 percent of all VC-financed firms are located in the San Francisco Bay area. Another 10–12 percent are located in the Boston and New York areas, respectively. In India and China, VC investments are similarly concentrated, and generally occur in locations with the greatest concentrations of highly educated persons. As Table 1 indicates, the investment concentration is remarkable. Forty percent of all the VC-funded firms are located in Beijing, 26 percent are in Shanghai, and the Southern Chinese triangle of Shenzhen, Guangzhou, and Hong Kong accounts for another 14 percent. VC investment in China is even more concentrated than in the United States.
Table 1 VC Investments in China and India by City, 2004–2007
(more than 5 investments per city)
Chinese City Number of Firms Percent Indian City Number of Firms Percent
Beijing 213 40 Bangalore 55 38
Shanghai 137 26 Mumbai 31 21
Shenzhen 36 7 Chennai 21 14
Hong Kong 19 4 New Delhi 16 11
Guangzhou 16 3 Hyderabad 11 8
Hangzhou 13 2 Pune 8 5
Nanjing 11 2 n/a
Suzhou 9 2 n/a
Wuhan 7 1 n/a
Others 66 13 Others 4 3
Unknown 1 0 Unknown 0 0
Total 528 100 Total 146 100
Binational 9 2 Binational 45 31
VC-backed startups in India, though more diffuse in terms of the top six, are more concentrated overall. Three city regions—Bangalore (38 percent), Mumbai (21 percent), and Chennai (14 percent)—attract the largest investment. However, when including Delhi (11 percent), Hyderabad (8 percent), and Pune (5 percent), these six cities account for an even greater percentage of overall VC investment. The most technology-oriented cities in both nations, Beijing and Bangalore, have received approximately 40 percent of all VC investment. The second largest recipients are Shanghai and Mumbai, which are also the financial capitals.
In China, an enormous economy growing at nearly 10 percent per year even as it emerges from a socialist past, there are significant opportunities in infrastructure development and in supplying the burgeoning underserved consumer market. In a recent Ernst & Young report, Fan Zhang, one of the founding managing partners of Sequoia Capital China, was quoted as saying that “one of the factors that attracted Sequoia Capital to China is the country’s booming consumer market that provides an opportunity to create companies to define certain sectors and fill the need for strong brands, not only in technology but also tech-related consumer services and more traditional industries.”
Zhang is correct—VC investing in China does not directly compete with U.S. firms seeking VC investment. Table 2 shows the fields that VC firms are targeting in China. The table is divided into two binary categories—whether the firm receiving the investment targets the domestic or the global market across a variety of industries, and whether a given firm is in a high technology or non-high technology sector. Chinese firms, even those in technology-based fields, overwhelmingly target the domestic market (87 percent). The Internet has given rise to the largest number of VC startups, nearly all of which are focused on the Sinophone market. Two other key areas—software (10 percent) and mobile phone applications (10 percent)—also cater almost exclusively to the Chinese market. This domestic focus suggests that it will be quite some time before VC-backed Chinese firms threaten counterpart firms in the United States. A possible exception may be semiconductor design, where there are some Chinese startups. Though few Chinese VC-financed firms are likely to be directly competitive with U.S. firms in global markets, many of these Chinese firms compete ferociously against U.S. multinationals trying to make their own inroads into the Chinese domestic market.
Table 2 VC Investments in China and India by Sector and Market, 2004–2007
India China
Sector Domestic* Global Domestic ** Global
Semiconductors 0 7 22 20
Internet 16 3 144 2
Software 2 14 55 4
Communications 1 4 23 9
Services 4 53 28 9
Mobile phone 7 5 51 1
Media 2 0 35 0
Healthcare 1 4 26 4
Retail 1 1 19 0
Miscellaneous 2 0 20 2
Components 0 0 2 1
Energy 0 0 6 8
Environment 0 0 5 1
Manufacturing 0 0 25 6
Total 34 91 461 67
* Domestic firms are identified as those that made no apparent attempt to serve overseas markets.
The profile of Indian firms differs from those in China. First, Indian firms are internationally oriented (73 percent); only 27 percent focus on the domestic market. With respect to sector concentration, VC investing in India favors the services sector (46 percent) and software (13 percent). This is not surprising, given India’s well-known comparative advantage in these arenas. Unlike most VC-backed companies in China, many Indian firms may well create competition for U.S. service firms, despite the less developed nature of the Indian economy as a whole.
China and India continue to attract significant VC investment, albeit in different sectors. Today, China is second only to the United States in terms of VC investing, and this is unlikely to change. In China, the preponderance of VC investment is geared to the rapidly growing internal market. The size and unique nature of this market offers entrepreneurs lucrative opportunities to provide “knock-off” U.S. Internet sites for the Chinese market. There are Chinese interpretations of Yahoo!, Google, eBay, Facebook, and Monster.com that service Chinese customers. These firms are self-limited by the language; as such, they do not threaten companies overseas. Moreover, these Chinese companies do not own unique or global class technology that could challenge larger multinational players. It is unclear whether this situation will change over time.
Indian firms differ from Chinese firms in their strong outward orientation. In percentage terms, more Indian than Chinese firms operate in hard-core technology fields. Thus, while China currently enjoys greater VC investment, it is possible that Indian firms may ultimately play a bigger role in the global economy.
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The Shanghai International Convention Center in Lujiazui, located in the finance and trade zone within the Pudong New District on the eastern bank of the Huangpu River.
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Postdoctoral fellow in Asia health policy combines legal and economic expertise
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The Asia Health Policy Program at the Walter H. Shorenstein Asia-Pacific Research Center is pleased to announce that Brian K. Chen has been awarded the %fellowship1% for 2009-2010. Brian is currently completing his Ph.D. in Business Administration in the Business and Public Policy Group at the Haas School of Business, University of California at Berkeley. He received a Juris Doctor from Stanford Law School in 1997, and graduated summa cum laude from Harvard College in 1992.
As an applied economist, Brian’s research focuses on the impact of incentives in health care organizations on provider and patient behavior. For his dissertation, Brian empirically examined how vertical integration and prohibition against self-referrals affected physician prescribing behavior. His job market paper has been selected for presentation at the American Law and Economics Association’s Annual Meeting in 2009.
Brian comes to the Shorenstein Asia-Pacific Research Center not only with a multidisciplinary law and economics background, but also with an international perspective from having lived and worked in Taiwan, Japan, and France. He has a particularly intimate knowledge of the Taiwanese health care system from his experience as an assistant to the hospital administrator at a medical college in Taiwan.
During his residence as a postdoctoral fellow with the Asia Health Policy Program, Brian plans to conduct empirical research on cost containment policies in Taiwan and Japan and how those policies impacted provider behavior. His work will also contribute to the program’s research activities on comparative health systems and health service delivery in the Asia-Pacific, a theme that encompasses the historical evolution of health policies; the role of the private sector and public-private partnerships; payment incentives and their impact on patients and providers; organizational innovation, contracting, and soft budget constraints; and chronic disease management and service coordination for aging populations.
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Leadership in Transition: Heterodox Pathways to Good Governance in Post-Suharto Indonesia
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What makes some governments perform better than others? With rising levels of decentralization and local democracy, the focus of "good governance" is increasingly shifting from national to subnational levels. While much of the existing development literature remains preoccupied with formal institutional and society-centered explanations, there is growing evidence that local policy reforms are strongly affected by informal norms and elite-centered processes.
Post-Suharto Indonesia, a country with one of the most pronounced shifts to democratic decentralization anywhere in recent history, is a case in point. Drawing on empirical comparisons across ten districts (comprising 1000 business surveys and 150 interviews), Dr. von Luebke argues that societal pressures are often less significant in explaining policy differences than the quality of local government leadership. In the early transition to democracy, local firms, associations, and district councils continue to be constrained by collective action and political incentive problems. Local government leaders, on the other hand, have wielded historically strong formal and informal powers and stand, for better or worse, at the gateway to local policy reform. Motivated by direct elections and prospective donor funding, some district heads have become catalysts for better governance by introducing informal public-private dialogues, innovative monitoring instruments, and meritocratic promotion schemes. In response to current development debates, these findings highlight the importance of government leadership as an often underestimated policy determinant that can compensate for weak societal checks in periods of transition from authoritarian rule.
Christian von Luebke is completing a book manuscript titled “Heterodox Governance: The Political Economy of Local Policy Reform in Post-Suharto Indonesia.” He has been awarded a 2009-2011 German Science Foundation Fellowship for a follow-up project incorporating cases from the rest of Southeast Asia and China. In 2001-2006 he worked in rural Indonesia as a technical advisor for the World Bank and the German Development Agency. He holds a Ph.D. in public policy from the Crawford School of Economics and Government at the Australian National University.
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Christian von Luebke
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
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cvluebke@stanford.edu
Visiting Scholar, 2009-12
Christian von Luebke is a political economist with particular interest in democracy, governance, and development in Southeast Asia. He is currently working on a research project that gauges institutional and structural effects on political agency in post-Suharto Indonesia and the post-Marcos Philippines. During his German Research Foundation fellowship at Stanford he seeks to finalize a book manuscript on Indonesian governance and democracy and teach a course on contemporary Southeast Asian politics.
Before coming to Stanford, Dr. von Luebke was a research fellow at the Center of Global Political Economy at Waseda (Tokyo), the Institute for Developing Economies (Chiba), and the Center for Strategic and International Studies (Jakarta). He received a JSPS postdoctoral scholarship from the Japan Science Council and a PhD scholarship from the Australian National University.
Between 2001 and 2006, he worked as technical advisor in various parts of rural Indonesia - for both GTZ and the World Bank. In 2007, he joined an international research team at the Institute of Development Studies (IDS) analyzing the effects of public-private action on investment and growth.
Dr. von Luebke completed his Ph.D. in 2008 in Political Science at the Crawford School of Economics and Government, the Australian National University. He also holds a Masters in Economics and a B.A. in Business and Political Science from Muenster University.
His research on contemporary Indonesian politics, democratic governance, rural investment, and leadership has been published in the Bulletin of Indonesian Economic Studies, Contemporary Southeast Asian Affairs, Asian Economic Journal, and ISEAS. He regularly contributes political analyses on Southeast Asia to Oxford Analytica.
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Economic and social implications of rapid demographic change in China, Japan, and Korea
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On February 26, 2009, the Asia Health Policy Program and the Stanford Center on Longevity co-sponsored a conference entitled Aging Asia: Economic and Social Implications of Rapid Demographic Change in China, Japan, and Korea. Held at the Bechtel Conference Center at Stanford University, the conference brought together scholars from China, Japan, Korea, Singapore, and the US with expertise in demography, economics, biology, political science, medicine, health services research, social policy, and psychology.
Topics of discussion included how demography shapes individual, social and economic transitions in China, Japan and Korea; intergenerational transfers and the impact of population aging on economic growth; the challenges to financing health care, long term care, and pensions in China, Japan and Korea; the chronic disease burden and comparative international experience with chronic disease management; and perspectives from Singapore on public policy for aging populations.
A book gathering together the policy-relevant insights of the conference presenters will be forthcoming in 2010, edited by Asia Health Policy Program Director Karen Egglestonand Professor of Biology Shripad Tuljapurkar.
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Service Provision for the Global Economy: The Evolving Indian Experience
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Since 1995, the offshoring of services to India has rapidly evolved from a curiosity only studied by a few scholars to a phenomenon portending a major shift in the geography of global economic activity. The article examines the evolution of Indian global services provision quantitatively and qualitatively through the use of four case studies. The first case study examines the challenge that the Indian information technology systems integrators (ITSIs) pose to the formerly larger—but now roughly comparable in terms of employment—incumbent developed-nation ITSIs. Because IT systems have become central to nearly every enterprise, the second case study illustrates the wide variety of enterprises that now have significant Indian offshore operations. The third case study describes the rapid growth of offshore integrated circuit design in India, a nation with now commercial-scale integrated circuit production. The final case study describes the emergence of high-opportunity entrepreneurial startups in India and the increasing number of Silicon Valley startups that very early in their lives or even as part of their business model have significant operations in India. The concluding discussion situates India within the global economy and speculates upon its future evolution.
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