Stanford University

Economic Affairs

Challenges and Realities of Software Development in China

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China's software industry is at an inflexion point. For the past decade, China has been in the shadow of India's spectacular success in the IT outsourcing industry. While changes are underway, many challenges remain. However, it is possible to build software development teams in China, collaborating with teams in the United States, to be as good as software development teams anywhere in the world.

Dr. Liu will discuss his experience as Chairman and CEO of Augmentum, a value-added software development services company that has grown in two years to more than 450 people worldwide, 90% of them at Augmentum's development facility in Shanghai. Sixty percent of Augmentum's work is high-value added such as total products and solutions, from architecture to system integration test. All their customers are in North America -- many of them leaders in their respective industries.

Leonard Liu has spent 30 years in the systems industry, with a track record of developing innovative computing technologies into successful businesses. Most recently, he served as president of ASE Group, a leading provider of IC test and packaging services, having held roles as Chairman and CEO of Walker Interactive Systems, COO of Cadence Design Systems, and President of Acer Group. He was an early champion of outsourcing to India and China at Cadence and Walker. Dr. Liu began his career at IBM where he was responsible for the creation and implementation of SQL and the management of CICS, SNA and AIX, eventually overseeing the worldwide Database and Language lines-of-business. He received his undergraduate degree from Taiwan University and his Ph.D. from Princeton University.

Part of SPRIE's Greater China and the Globalization of R&D seminar series

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Leonard Liu Chairman and CEO, Augmentum, former executive at Cadence, Acer Group & IBM Speaker
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AIDS, Reversal of the Demographic Transition and Economic Development: Evidence from Africa

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This paper presents empirical evidence on a specific mechanism through which demographic transition affects economic growth. The evidence provides support for the models of demographic transition emphasizing the demand for children. Using a panel of African countries during 1985-2000, I show that the AIDS epidemic effects the total fertility rates positively and the school enrollment rates negatively. These patterns are consistent with the theoretical models that argue the existence of a precautionary demand for children in the face of uncertainty about child survival. Parents, who are faced with a high mortality environment for young adults, choose to have more children and provide each of them with less education, leading a reversal in the fertility transition and a reduction in the aggregate amount of human capital investment. The empirical estimates show that a country that has witnessed the average increase in AIDS incidence for Africa, have 0.8 more births and 30 percentage points less primary school enrollment since 1985. The results imply lower economic growth and welfare for the current and future African generations.

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CDDRL Working Papers
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Diseases And Development

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This paper examines two related questions: what effects do infectious diseases exert on growth and development, and are they quantitatively important? We present evidence on the effect of health and infectious diseases on economic development using Hansen's (2000) endogenous threshold methodology. Taking into account various proxies for infectious diseases as potential threshold variables we show that countries are clustered in regimes that obey different growth paths and thus provide direct evidence of threshold effects. Motivated by this evidence we propose an epidemiological overlapping generations model where the transmission and incidence of an infectious disease depend upon economic incentives and rational behavior. The economic cost of the disease comes from its effect on mortality (infected individuals can die prematurely) and morbidity (lower productivity and/or lower flow of utility from a given consumption bundle). Our main theoretical finding is that if infectious diseases are particularly virulent or debilitating, growth- or development-traps are possible. Numerical results from a calibrated version of the model show that threshold effects of diseases are quantitatively important and in particular, significant health interventions are required to propel disease addicted countries to a high-growth trajectory.

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ITRI-SPRIE CONFERENCE: The Greater China Capital Market for Innovation and Entrepreneurship

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Among the different types of capital resources, venture capital as practiced in Silicon Valley is broadly acknowledged as being an important constituent of a high technology, entrepreneurial habitat. In the past two decades, policy makers from different regions have learned much from its experience.

The IT industry attributes its success partly to venture capital investments in early, risky, stages. Looking ahead, other industries will emerge in the knowledge economy. Within Taiwan and Mainland China, information related industries still dominate investment, yet in Silicon Valley emerging industries including biotechnology, medical instruments and nanotechnology have recently been attracting as much venture capital as the IT industry.

Today, venture capitalists from Silicon Valley and Taiwan are probing what they perceive as growing investment opportunities in Mainland China, On the other hand, the immaturity of its private equity market and the undeveloped state of exit mechanisms there is causing venture capitalists to hesitate to made large investments. Currently, Taiwan's venture capital faces low price-earnings ratios in its 1,400 publicly listed companies. This has contributed to a decline in VC investment. The Taiwan government expects to further liberalize the financing environment to bolster it as a regional center for domestic and international corporations.

This conference will address the influence of the system of capital on regional innovation and entrepreneurship in the United States, Taiwan, and Mainland China. The focus will be on the venture capital industry, corporate venturing and other institutions of capital related to regional industrial development.

Here are some questions to be addressed in this conference:

  • What is the pattern of venture capital investing in high-tech start-ups in the Greater China Area?
  • What are the trends in this industry?
  • How, specifically, does venture capital promote innovation and entrepreneurship?
  • What are the similarities among independent venture capital funds, corporate venture funds, angel funds, and commercial bank involvements?

Conference Organization

Conference Chairman

  • Dr. Chintay Shih, Dean of College of Technology Management, National Tsing Hua University, and Special Advisor, Industrial Technology Research Institute

Co-chairmen

  • Dr. Paul Wang, Chairman, Taiwan Venture Capital Association
  • Dr. Henry Rowen, Co-director, SPRIE
  • Dr. William Miller, Co-director, SPRIE

Executive Director

  • Dr. Sean Wang, Director General of Industrial Economics and Knowledge Center in Industrial Technology Research Institute

Conference Secretariat

  • Industrial Economics and Knowledge Center, Industrial Technology Research Institute (IEK/ITRI)

Conference Organizing Secretariat

  • ITRI: Yi-Ling Wei, Peter Lai, Frank Lin, Shu-Chen Huang
  • TVCA: Teresa Yang, Michael Chen, Riva Su
  • SPRIE: Marguerite Gong Hancock (Stanford)/Martin Kenney (UC Davis)
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Auditorium, The Grand Hotel,
1 Chung Shan N. Road, Sec. 4, Taipei, Taiwan

Conferences

Studying Islam, Strengthening The Nation

Authors
Michael A. McFaul
News Type
Commentary
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It remains painfully true, more than three years after Sept. 11, that even highly educated Americans know little about the Arab Middle East. And it is embarrassing how little our universities have changed to educate our nation and train experts on the wider Middle East.

For believers in a good liberal arts education, it has long been a source of consternation that faculties in political science, history, economics and sociology lack scholars who know Arabic or Persian and understand Islam. Since Sept. 11 it has become clear that this abdication of responsibility is more than an educational problem: It also poses a threat to our national security.

The case for bolstering faculty and curriculum resources devoted to the Muslim Middle East is, of course, obvious from an educational perspective. The region is vast. Islam represents one of the world's great religions and provides not only an intellectual feast for comparative study in the social sciences and humanities but also an indispensable comparison and contrast for more familiar religions and ways of life. Particularly in the era of globalization and the information revolution, there is little excuse for universities' continuing to betray the liberal ideal of educating students in the ways of all people.

Our national security interest in this area should also be obvious. As in the Cold War, the war against Islamic extremism will not be won in months or years but in decades. And as in the Cold War, the non-military components of the war will play a crucial role.

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Women as Policy Makers: Evidence from India

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Professor Esther Duflo, co-founder of the Poverty Action Lab at the Massachusetts Institute of Technology, will speak as part of the CDDRL project on Women and Development. Her talk will focus on her research into women in Indian politics.

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Esther Duflo Professor of Economics MIT
Conferences

Conference on Health, Demographics and Economic Development

The Conference on the Health, Demographics and Economic Development will take place on May 20-21, 2005 at the Center on Development, Democracy and the Rule of Law, Stanford Institute for International Studies. This conference is organized by Peter Lorentzen and Romain Wacziarg.

The conference is organized around three themes:

1. The Demographic Transition and the Industrial Revolution

2. Health, Fertility, and Human Capital

3. The Effects of Health on Income and Growth: Micro and Macro Evidence.

Participants include: Manuel Amador (Stanford University), Javier Birchenall (UC Santa Barbara), Hoyt Bleakley (UC San Diego), David Bloom (Harvard University), Michele Boldrin (University of Minnesota), David Canning (Harvard University), Shankha Chakraborty (University of Oregon), Matthias Doepke (UCLA), Miriam Golden (UCLA), Larry Jones (University of Minnesota), Sebnem Kalemli-Ozcan (University of Houston), Pete Klenow (Stanford University), Peter Lorentzen (Stanford University), Aprajit Mahajan (Stanford University), John McMillan (Stanford University), Rodrigo Soares (University of Maryland), Uwe Sunde (IZA Bonn), Michele Tertilt (Stanford University), Romain Wacziarg (Stanford University), and David Weil (Brown University).

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Romain Wacziarg Speaker
Peter Lorentzen Speaker
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CDDRL Conferences

Empowering the Poor: What Does Democracy Have to Do with It?

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Poverty reduction on a large scale depends on empowering those who are most motivated to move out of poverty - poor people themselves. But if empowerment cannot be measured, it will not be taken seriously in development policy making and programming.

Building on the award-winning Empowerment and Poverty Reduction sourcebook, this volume outlines a conceptual framework that can be used to monitor and evaluate programs centered on empowerment approaches. It presents the perspectives of 27 distinguished researchers and practitioners in economics, political science, sociology, psychology, anthropology, and demography, all of whom are grappling in different ways with the challenge of measuring empowerment. The authors draw from their research and experiences at different levels, from households to communities to nations, in various regions of the world.

Measuring Empowerment is an invaluable resource for planners, practitioners, evaluators, and students?indeed for all who are interested in approaches to poverty reduction that address issues of inequitable power relations.

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World Bank in "Measuring Empowerment: Cross Disciplinary Perspectives", Deepa Narayan, ed.
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Larry Diamond

The 'Upstream' Problem in Constitutionalism

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Eugene Mazo is a post-doctoral fellow and research scholar at CDDRL, a John M. Olin fellow in law and economics at Stanford Law School, and a fellow of the Stanford Center on Conflict and Negotiation (SCCN). Educated as both a lawyer and a political scientist, he specializes in the fields of law and democracy, law and development, and law and globalization. His work has appeared in scholarly journals and in popular media outlets such as the International Herald Tribune, the San Jose Mercury News, and the Washington Post.

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Eugene Mazo Post Doctoral Fellow CDDRL
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Mobilizing the State as Public Risk Mitigator

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Dr. Hilton Root, an academic and policy specialist in international political economy and development joined the Faculty of Pitzer, a member of Claremont Colleges, as Freeman Fellow from June 2003 to June 2005. Before joining, he served the current administration as US Executive Director Designate of the Asian Development Bank, and as senior advisor on development finance to the Department of the Treasury. Dr. Root was Director and Senior Fellow of Global Studies at the Milken Institute and was a Senior Research Fellow and Director of the Initiative on Economic Growth and Democracy at the Hoover Institution. His areas of expertise are international economics, economic development and policy reform, and Asian affairs.

As a policy expert, Dr. Root advises the Asian Development Bank, the IMF, the World Bank, the UNDP, the OECD, the US State Department, the US Treasury Department and USAID. He has completed projects in 23 countries. The analytical framework he contributed to the World Bank's Asian Miracle study, 1993, was part of the effort to put institutions on the development agenda. While at the ADB as chief advisor on governance, he was the principal author of the ADB's Board-approved governance policy. He presided over a committee on governance indicators at the OECD and initiated the restructuring of the Sri Lanka civil service as an advisor to President Chandrika Bandaranaike Kumaratunga. He was one of the principal contributors to the design of the Millenium Challenge Account of the Bush administration.

As an academic, he has taught at the University of Michigan, California Institute of Technology, the University of Pennsylvania and Stanford University. Dr. Root has written and lectured extensively, publishing six books and more than 100 articles. He is a frequent contributor to the Wall Street Journal Asia, the International Herald Tribune, Los Angeles Times and the Washington Post. He has published and presented in both the English and the French languages and has been translated into many languages including Chinese, Korean and Japanese.

He has been awarded honors for The Key to the East Asian Miracle: Making Shared Growth Credible (with J. Edgardo Campos), which won the 1997 Charles H. Levine Award for best book of the year by the International Political Science Association. The Social Sciences History Association awarded him the 1995 best book prize of its Economic History Section for The Fountain of Privilege: Political Foundations of Markets in Old Regime France and England. From the American Historical Association he received the Chester Higby Prize, 1986, for the best article among those published during the previous two years. He is on the board of a number of organizations and journals including the Open Society Institute, Center for Public Integrity and Review of Pacific Basin Markets and Policies. Dr. Root received his doctorate from the University of Michigan in 1983.

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Hilton Root Professor or Economics Claremont Colleges, Claremont, CA
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