From November 14^th to 22^nd, the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) welcomed a delegation of leaders from Shanghai for intensive training on “Leading Innovative and Entrepreneurial Firms and Regions in the Global Economy”.  The 20-member delegation was composed of officials and senior managers with responsibilities over high tech parks, human resources, finance and urban planning in Shanghai, which has a total population over 20 million, and burgeoning investment in banking and finance, IT, bio science and media.

The weeklong program included more than 30 hours at the Stanford Graduate School of Business’ state-of-the-art Knight Management Center, the Bay Area Council and Department of Environment in San Francisco. The Chinese leaders engaged in dialogues and exchanged ideas with Stanford faculty, policy experts in the Bay Area, venture capitalists, entrepreneurs, and NGOs on the key strategies to drive innovation and entrepreneurship. 

Teaching sessions drew on the expertise and experience of 13 thought leaders who shared innovative strategies, current data, and lessons from Silicon Valley, and regions in the US, Europe and Asia.  From the GSB, Professor William F. Miller, Professor William P. Barnett and SPRIE Associate Director Marguerite Gong Hancock, each led sessions, ranging in focus from the ecosystem of Silicon Valley to strategies for discovering successful business models.

The classroom experience culminated in team presentations to translate what was learned into the context of the Chinese leaders’ own experiences and responsibilities in the Shanghai region.

“During the seven-day training program organized by SPRIE, we have learned several insights…especially under the theme of Engines of Innovation and Entrepreneurship,” said one group. The culture of innovation and entrepreneurship, the driving force of linking universities and industry, and the support of non-profit organizations could all play an increased role in Shanghai, another group concluded in a written report.

While appreciating the differences in cultures, systems, and the roles of government between Shanghai and the Valley, the Shanghai leaders also discussed how the Valley’s culture of risk taking and tolerating failure, and empowering creativity and productivity in talent had inspired them to apply lessons learned to Shanghai.

This program on “Leading Innovative and Entrepreneurial Firms and Regions in the Global Economy” is one of a series hosted by SPRIE to welcome international policymakers to Stanford at the heart of Silicon Valley to explore what leaders in successful high-tech regions around the world do to foster innovation and entrepreneurship and become engines for economic growth. Classes are offered by an interdisciplinary team of experts comprised of Stanford University faculty, Silicon Valley thought leaders, and other regional decision makers.  Previously, SPRIE hosted a three-day training program for 20 central, provincial and municipality government officials from China, featuring distinguished speakers such as George Shultz (right in the photo), former U.S. Secretary of State, and Burton Richter, a Nobel Prize Laureate in Physics.

Kenjiro Takenami, Director of Ruby Software Business Development Project at Fukuoka Prefectural Government, spoke to an audience at Stanford about the government’s success in promoting entrepreneurship in the Fukuoka region of Japan, at a seminar organized by the SPRIE-Stanford Project on Japanese Entrepreneurship (STAJE) on November 3^rd, 2011.

In Takenami’s presentation, he discussed that Fukuoka now has over 800 local software and digital content companies with the number of companies increasing 20% annually. It is ranked 5^th in Japan for the total number of software businesses and total software sales revenue. He described that in the past, Fukuoka had faced challenges in promoting entrepreneurship because of the lack of investment, mentors, and innovators. In an attempt to solve these challenges, the Fukuoka government created new programs that financed local start-up companies and supported venture capital funds. However, these programs failed to boost entrepreneurship and regional development.

Takenami revealed that the turning point for the Fukuoka government’s success was the decision to support research and development for Ruby, a dynamic, open source programming language developed in Japan. The government committed to build a community around the programming language and helped entrepreneurs and businesses develop new technologies that used Ruby. They launched multiple incubators for developers and held periodic conferences for the community members to inspire and learn from each other.

Fukuoka prefecture has a population of five million and a GDP of over 180 billion US dollars. The city of Fukuoka, which was selected as one of the “Hot Cities The Top 10” by Newsweek in 2006, has been attracting the attention of foreign investors. It is located on the northern tip of Kyushu and is geographically closer to China and South Korea than any other major Japanese city. Historically, it has been the hub for business and trade to continental Asia. The prefecture is ranked 2^nd in Japan for the number of universities and colleges specializing in science and engineering, with approximately 7,000 graduates every year.

Takenami concluded the seminar by highlighting that eight times as many local companies in Fukuoka develop using Ruby since they began in 2008. He also shared success stories of companies which began in Fukuoka, but are now internationally known, such as Nautilus Technologies.

ABOUT THE Speaker

Kenjiro Takenami is Director of Ruby Software Business Development Project, Commercial and Industrial Policy Division of Fukuoka Prefectural Government and is responsible for the Fukuoka’s software industry development efforts. Takenami is the former Executive Director of the Fukuoka Center for Overseas Commerce in America, based in Silicon Valley.

Following the seminar, SPRIE-Stanford Project on Japanese Entrepreneurship (STAJE), Stanford Graduate Business School and US-Asia Technology Management, Stanford School of Engineering co-hosted the Fukuoka Ruby Night Event, an annual Ruby developer conference, organized by the Fukuoka Center for Overseas Commerce in America (FCOCA).

The video clips for the keynote presentations of this event can be found here.

Chinese internet users have devised an array of creative ways to navigate around government censorship of China's cyberspace, CNN correspondent Kristie Lu Stout told a Stanford audience.

Please click here to listen to the podcast of Kristie Lu Stout's talk.

STANFORD GRADUATE SCHOOL OF BUSINESS — Chinese internet users have devised an array of creative ways to navigate around government censorship of China's cyberspace, a leading Hong Kong-based CNN journalist told a Stanford audience.

In a November 21 talk at the Stanford Graduate School of Business, Kristie Lu Stout, BA '96, MA '97, an anchor and correspondent for CNN International, discussed the burgeoning internet and social media scene in China. The Stanford graduate described a fast-changing country where daily life increasingly takes place online and where social networking has created new ways for Chinese citizens to interact and express themselves, even as their online activities are strictly monitored for offensive or politically sensitive content.

China has a "vibrant community of netizens and entrepreneurs who are actively challenging the boundaries," Stout said. "They're able to come up with creative ways to bypass [restrictions]. It's a story of expression, control, and innovation."

China has the world's largest internet population, about 500 million users, and it has experienced an explosion in the popularity of social networking.

Based for a decade at CNN's Asia headquarters in Hong Kong, Stout has been at the forefront of covering China's online community. She anchors a daily news show for CNN International, which broadcasts globally (outside the United States). Her talk was hosted by the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE), part of the GSB.

Stout said that Chinese government controls have tightened over the past year or so, ahead of a transition of power expected in 2012-2013 for China's top leadership. Officials recently have ordered Chinese media outlets to "strengthen information management," "crack down on false rumors," and "enforce real-name registration" on social media sites, she said.

"The rules are broad and vague. There's a blanket ban on anything that would harm state security and social stability."

She listed some keywords that were blocked from online searches in China over the past year: protest, sex, Hillary Clinton, occupy, empty chair, jasmine. In addition, leading Western sites, including Google, Facebook, Twitter, and YouTube, are blocked.

The CNN journalist discussed her coverage and interviews of two leading figures at opposite extremes of the Chinese internet. The "establishment" figure was Charles Chao, CEO of Sina.com, the online media giant that abides by Chinese censorship rules while also operating Sina Weibo, a microblogging and social networking site that is a popular venue for public discourse. The "anti-establishment" figure was Ai Weiwei, a dissident artist and political activist who recently was detained by Chinese authorities and whose name is banned from the Chinese internet. "Both represent the different story lines that we, as journalists, look into," said Stout.

Stout highlighted the tactics Chinese netizens use to circumvent the "Great Firewall" of China. Individuals and businesses have used virtual private networks, or VPNs, to access forbidden sites. It's estimated that more than 100,000 Chinese are on the Google+ social network and 20,000 on Twitter, Stout said.

A new lexicon has emerged on the Chinese internet, consisting of code words, homonyms, and vocabulary laced with mockery, satire, or sarcasm. The words "empty chair" refer to jailed dissident Liu Xiaobo, who was awarded the Nobel Peace Prize but was barred by Chinese authorities from going to Oslo to accept it. Being "harmonized" means being censored, a reference to top leaders' frequent calls for creating a harmonious society. Chinese netizens invented the "grass mud horse," or "cao ni ma," a mythical creature whose name sounds like a Chinese profanity. The alpaca-like creature emerged online as a symbol of resistance to censorship, setting blogs, and social sites abuzz with images, songs, and poems about it.

Despite China's strict controls, the internet has become a far-reaching venue for venting public frustration and anger over government corruption and incompetence. When two high-speed trains near Wenzhou crashed in July, killing 39 people and injuring many more, there was an outpouring of anger online against officials for their handling of the disaster, Stout said. Similarly, a photo of Gary Locke, the new U.S. ambassador to China, carrying his own backpack and buying his own coffee at a Starbucks in the Seattle airport in August, went viral on the Chinese internet, where netizens noted the contrast with Chinese officials who often travel with large entourages and expense accounts. The photo sparked "a huge online debate about corruption and values," Stout said.

In response to a question, the CNN journalist said it's impossible to estimate how many people are involved in China's censorship apparatus. However, she said, "the most powerful way to control the internet is through self-censorship." By "creating a climate of fear," Chinese authorities can put much of the responsibility onto media organizations themselves.

Stout acknowledged that many Chinese believe the internet has introduced a level of freedom previously unknown in China. She suggested that it is in China's best interests to further ease controls. "If you want to be a truly innovative country, you can't censor the internet," Stout said.

Two Stanford graduates with close ties to FSI’s centers have been named 2012 Rhodes Scholars. A third was selected as a Mitchell Scholar.

Anand Habib was a graduate of the 2011 CISAC honors program in international security studies and a 2010 Dachs undergraduate intern. Habib and Katherine Niehaus – who is now a research assistant for a CHP/PCOR project evaluating whether HIV medication increases the risk of cardiovascular disease – will study at the University of Oxford in England under the Rhodes program. 

Philippe de Koning, who will study in Ireland as a Mitchell fellow, wrote a manuscript about Japan’s defense and financial crisis with Shorenstein APARC faculty member Phillip Lipscy. Lipscy, a political scientist, was de Koning’s advisor through his undergraduate career and also advised him on his senior thesis. De Koning was also a 2010 CISAC honors student.

More about the scholars:

Anand R. Habib, 22, of Houston, Texas, is a 2011 graduate of Stanford, where he earned a bachelor's degree in biology, with honors in international security studies. He plans to pursue a master's degree in public policy and in medical anthropology at Oxford.

Habib is working on community health programs at St. Joseph's Clinic in Thomassique, Haiti, under a one-year global health fellowship awarded by Medical Missionaries. The nonprofit organization is a volunteer group of more than 200 doctors, nurses, dentists, and others who work to improve the health of the poor in the United States and throughout the world.

In 2011, he won a Deans' Award for Academic Accomplishment, which honors extraordinary undergraduate students for "exceptional, tangible" intellectual achievements. One of the professors who nominated him for the award described him as a "superb critical thinker" whose work is characterized by "creative genius" and "mature insights," adding that he "exemplifies exactly the kind of deeply informed, pragmatic and caring leadership that the world needs and Stanford enables."

As a Stanford student, Habib worked on behalf of politically and medically disenfranchised people in India, Mexico and Guatemala. His field research internship in Guatemala’s indigenous region during summer 2010 was carried out under the supervision of Paul Wise, professor of pediatrics and FSI senior fellow, as part of FSI’s Dachs mentored undergraduate research program.  On campus, he turned the Stanford tradition of the annual Dance Marathon into a vehicle dedicated to addressing the HIV/AIDS pandemic by engaging not only Stanford students but also local communities and corporations, raising more than $100,000. His exceptional work was recognized by his participation in the Clinton Global Initiative University Conference in April, 2011.

Katherine "Kate" Niehaus, 23, of Columbia, S.C., earned a bachelor's degree in biomechanical engineering in 2010 and a master's degree in bioengineering in 2011 – both at  Stanford. Her class and research work focused on biomechanics and her interests lie in its applications to high technology entrepreneurship.

She plans to pursue a doctorate of philosophy in systems approaches to biomedical science at Oxford.

At Stanford, Niehaus captained Stanford's varsity track and cross country teams, won the Pac-10 5,000 meters, and won Academic-All American status. She also served as a mentor and tutor for students in low-income families.

Working with faculty in the Center for Health Policy, Kate led a project to evaluate how well newer HIV antiretroviral drugs work compared with older drugs.  Her work was among the first to evaluate comprehensively all of the trials of new drugs in treatment of experienced patients, and showed that these drugs have substantial benefits.

Philippe de Koning, 22, of Paris, France, earned a bachelor's degree in international relations at Stanford in 2010. He plans to pursue a master's degree in international security and conflict resolution at Dublin City University.

He is a Herbert Scoville Jr. Peace Fellow at the Nuclear Threat Initiative in Washington, D.C. The nongovernmental organization works to prevent nuclear, chemical, and biological threats from materializing. De Koning is researching nuclear materials security and the U.S.-China dialogue on nuclear issues.

De Koning, who earlier was awarded a Fulbright Scholarship, spent the 2010-2011 academic year at Hiroshima University in Japan. He examined various components of Japanese security policy, with emphasis on current evolution of Japanese Self-Defense Forces, policies on nuclear issues and approaches toward peacekeeping.

In 2009, he was a member of the Stanford delegation to the United Nations Climate Change Conference in Copenhagen.

The Program on Social Entrepreneurship at Stanford's Center on Democracy, Development, and the Rule of Law seeks to actively integrate the on-the-ground experience of social entrepreneurs from around the world with cutting-edge academic research at Stanford University. Building a tangible bridge between academia and practice, the Program exposes students to new models of social change through innovative courses and provides practitioners the opportunity to build their individual and personal capacities as social change leaders.

How does bankruptcy reform influence the entry and performance of ventures in Japan?
Entrepreneurship is now at the center of many policy questions related to economic growth, employment opportunity, advancement of science and the alleviation of poverty (Ahlstrom, 2010). There is a growing consensus that fostering an appropriate institutional environment is important and affects the dynamic of job growth through new company formation and competition. The question we seek to understand is if institutional changes have the intended effect of creating new and flourishing firms and what are the mechanisms that drive changes in performance of new firms as a result of altering the institutional environment.

Download the full paper here.

On October 20, the SPRIE-Stanford Project on Japanese Entrepreneurship (STAJE) hosted a panel discussion featuring venture capitalists and a group of U.S.-Japan experts. The discussion with the title, "U.S.-Japan VC Cooperation and the Fly Over Phenomenon" was moderated by SPRIE Researcher, Robert Eberhart and held at the Stanford Graduate School of Business.

Panelists included Michael Alfant, CEO of Fusion Systems, Martin Kenney, Professor at UC Davis, Allen Miner, Founder of SunBridge, Scott Ellman, CEO of USAsia Venture Partners, Quaeed Motiwala, Managing Director at DFJ JAIC, and William F. Miller, Co-director of SPRIE. They discussed the tendency of U.S. based venture capital firms to fly from Silicon Valley, over Japan, and invest into China.

The panel noted that the reasons usually given by U.S. venture capitalists for the flyover phenomemon is that Japan has obscure accounting, uncertain relief in courts, and too far away to monitor. But since those risks are much larger in China other explanations were needed.  The lack of innovation - i.e. copycat firms -  that flourish in new niches in China are more attractive for VCs than the highly competitive and risky new technologies in Japan. Panelist also suggested that investing cycles are dominated by "fashion" with Japan being out of fashion, and noted the late stage investing pattern in China versus earlier stage investing in Japan and the U.S.  Finally, the panel posed an interesting question for STAJE research that perhaps under certain circumstances protected markets that are now in China might reduce the risks and increase returns for venture capitalists.