"These projects have great potential to advance academic knowledge, social capital and human development around the world, and to create a healthier, more promising future for hundreds of millions of people," President John Hennessy said. "When we launched The Stanford Challenge, we committed to marshal university resources to address the great challenges of the 21st century in human health, the environment and international affairs, and it is gratifying to see the response from our remarkable faculty."

The 2008 projects and their principal investigators follow:

Enhancing Health Security Through Infrastructure and Behavioral Intervention: Water, Sanitation and Child Survival in Africa. Alexandria Boehm and Jenna Davis, Civil and Environmental Engineering; Abby King, Health Research and Policy and Medicine; Gary Schoolnik, Medicine and Microbiology and Immunology. The project seeks to improve the health and well-being of the 1.2 billion people in low-income countries who lack access to clean water and the 2.6 billion who lack access to sanitation services, with a focus on mortality reduction in children. It will be carried out in sub-Saharan Africa, where the toll of water- and sanitation-related illness on health is severe, and will investigate the extent to which information and education about water and sanitation at the household level motivates behavior changes that result in reduced morbidity. Results will inform international efforts to design and implement effective water supply and sanitation interventions for more than 400 million Africans currently lacking access.

Why Are Indian Firms Poorly Managed? A Survey and Randomized Field Intervention. Nicholas Bloom and Aprajit Mahajan, Economics; Thomas C. Heller and Erik Jensen, Law School; John Roberts, Graduate School of Business. The biggest single reduction in poverty in the history of mankind was achieved by the industrialization of China since 1978, which lifted almost 500 million people out of poverty. India has not experienced this level of poverty reduction because its manufacturing firms have not achieved the productivity gains seen in China. Recent evidence suggests one key factor is the poor management practices adopted by Indian firms. This project examines why poor management practices persist in India and are much more common there. It focuses in particular on evaluating the relative importance of informational, legal and development barriers. The project will undertake a field survey of Indian firms to evaluate their knowledge of modern management techniques and a field intervention aimed at upgrading management practices in a randomized sample of Indian firms, comparing their progress to a control group of untouched firms.

Courts, Politics and Human Rights. Joshua Cohen, Philosophy, Political Science, and Law School; Terry L. Karl, Political Science; Jenny S. Martinez, Law School; Helen Stacy, Law School. This project examines the role of courts as the centerpiece of strategies for promoting human rights by asking if courts should be a preferred human rights venue or if there are other more accessible and effective ways to secure human rights. It addresses three broad themes: the interplay between national, regional and international courts in the protection of human rights; the role of governments and nongovernmental organizations in influencing legal proceedings; and how courts construct historical truth and shape public opinion, memory, attitudes and discourse about human-rights abuses. The multidisciplinary project will span countries, regions, issue areas and historical timeframes to ask what reasonably can be expected from international, regional and domestic courts in safeguarding human rights.

The Middle East and the World Economy. Matthew Harding, Economics; Lisa Blaydes, Political Science. This project examines why the Middle East has lagged in economic progress compared to much of the developing world and the implications of this underdevelopment for two overarching trends in Middle Eastern politics today: authoritarian government and Islamic fundamentalism. The researchers also will examine how political instability originating in the Middle East has affected world oil prices and world markets by constructing economic models of the world economy. The project seeks broadly to understand the macro- and microeconomic determinants of Islamic fundamentalism and authoritarian rule, and the extent to which these two outcomes have affected the stability and prosperity of the world economy. It measures global factors resulting from increased globalization and quantifies their impact on the development of economies in the Middle East.

The $3 million Presidential Fund for Innovation in International Studies was first established in 2005 by the Office of the President and the Stanford International Initiative to support new cross-campus, interdisciplinary research and teaching among Stanford's seven schools on three overarching global challenges: pursuing peace and security, reforming and improving governance at all levels of society, and advancing human well-being.

The first $1 million in interdisciplinary grants was awarded in February 2006; the second round of grants was awarded in February 2007.

"In all three rounds of funding, it has been heartening to see the imaginative and innovative ways that Stanford faculty are combining intellectual forces across disciplines to tackle some of the most pressing and persistent problems of our day," said Coit D. Blacker, chair of the International Initiative Executive Committee and director of Stanford's Freeman Spogli Institute for International Studies. "It is especially gratifying to see the younger faculty competing for these grants, eager to generate new knowledge and new solutions and help train a new generation of leaders."

Priority in funding has been given to teams of faculty who do not typically work together, who represent multiple disciplines and who address issues falling broadly within the three central research areas of the Stanford International Initiative. Projects are to be based on collaborative research and teaching involving faculty from two or more disciplines and, where possible, from two or more of the university's seven schools.

Full video of the Google.org course on poverty and development that Program on Global Justice Director Joshua Cohen moderated from September to November 2007 is now available online at YouTube.com.

The 10-week course, which focused on understanding poverty and development at the global, national, local, and personal levels, was the first of three courses on Google.org's main areas of philanthropic activity--Global Development, Global Health, and Climate Change.

The course on global poverty and development met once a week from Sep. 12 to Nov. 14, 2007 at Google headquarters. Each two-hour session featured guest speakers on development-related issues such as education and health, equitable financial markets, globalization, and population mobility. On Oct. 3, Rosamond L. Naylor, director of the Center on Food Security and the Environment (FSE) at FSI Stanford, co-taught a session on productive agriculture for the 21st century with Frank Rijsberman, Google.org director of water and climate adaptation issues.

Google.org is the philanthropic arm of Google and the umbrella for its commitment to devote employee time and one percent of Google's profits and equity toward philanthropy.

Course videos

Earlier this month Chinese revelers welcomed the new lunar year with a few more candles than usual. The country was gripped by a crisis in electric power production that caused California-style blackouts across the central and southern parts of the country. Power plants could not keep up with demand, especially because they didn't have enough coal on hand to burn.

The immediate causes of China's power crisis are straightforward. Snow storms disrupted the railroads that carry most coal to power plants. Record low temperatures also boosted demand for electricity and coal. But there was a deeper cause at work. China's free-market policies—the same ones that led to China's extraordinary growth in the past decade—have eroded the government's ability to control its economy. Economic activity, by design, is shifting away from state-owned enterprises and central planning. But Beijing doesn't have structures in place to control those aspects of the economy it doesn't own outright. Market reforms are making Beijing less and less relevant to what's really going on in the economy, threatening to turn China into a "weak state." And it's not just China—India, too, is having trouble regulating its industry and economy. The phenomenon is a dark cloud on the Asian century.

If this all sounds abstract, consider that China's blackouts were mainly a byproduct of the government's struggle to manage the planned and market-based parts of the economy side-by-side. Today, the Chinese leadership is worrying about inflation, but they have few useful tools to slow the rise in prices. A few years ago, Beijing might have dampened industrial growth by closing the spigot of finance from state-owned banks. But many newly deregulated state enterprises, as well as new privately owned companies, have found other sources of capital, including caches of massive profits accumulated over the years. One of the few industries Beijing still controls is power—it owns nearly every aspect of the grid, from generators to distributors. So Beijing decided to try and quell inflation by lowering electricity prices.

The energy industry, however, is bigger than just power generation and distribution. It includes the coal industry, which has been the object of market reforms. Starting two years ago the country largely abandoned the traditional planning system for allocating and pricing coal, the main fuel for power generators and one of the power companies' largest costs. Suppliers and buyers were allowed to negotiate on their own terms. With demand for electricity skyrocketing, suppliers had the upper hand, and coal prices rose. With Beijing keeping prices artificially low, power plants could not pass these costs to the consumer. They responded by cutting back on coal orders. As coal inventories dwindled, power generators cut back on capacity, and the lights went out.

Beijing's lack of practical control over large swaths of industry explains an increasing number of China's woes. The environment is a case in point. The government has an elaborate apparatus for environmental regulation, with strict laws on the books, but it is unwilling to enforce the measures for fear of stepping on the toes of local authorities, who usually push industrial development at the expense of greenery. Changing that power structure will require politically dangerous rewiring of the ruling Communist Party's power base. To be sure, Beijing is still powerful in some areas such as Internet regulation. And its recent success in imposing safety standards to close dangerous small coal mines, another area where Beijing is flexing its muscle, probably inadvertently contributed to the current coal crisis. Overall, however, what's most striking is Beijing's inability to impose needed regulation nor to predict what will happen when it does regulate. For example, a keystone in the government's effort to avoid future energy crises is an aggressive plan to improve energy efficiency about 4 percent per year over the current decade. The actual effect of Beijing's efficiency policies is barely one third that level.

These are not passing problems. They reveal a deep weakness in China's administration because the government has been unable to replace its Soviet-style planning system with an alternative scheme that is better suited to a market economy. Like an American film on the Wild West, much of the economy is governed by central strictures that don't really have much impact.

India is also plagued by administrative weakness—and the problems are getting worse as the Indian economy takes off and government struggles to address the byproducts of rapid economic growth. Large pockets of the Indian power grid are unreliable because Indian policymakers tinker with electricity prices in an effort to deliver political favors. (Electricity supplied to most Indian farms costs almost nothing and in some parts of the country is actually free. India has many farmers and they vote; politicians court them with stunts like free power. Poor accounting systems allow others who steal power to blame the farmers.) That tinkering has put most Indian power utilities into bankruptcy. The problems would be even worse if most of the power sector were not actually owned by the central and state governments in India, which shuffle money around to keep the companies afloat. Unable to get reliable power that is essential to industrial production, most large power users build their own power supplies. By some estimates, one third of the country's power plants are of this "captive" variety—by design, disconnected from the government-controlled grid so they are more reliable and also immune from political meddling.

The rise of weak states on the world stage will affect every aspect of international relations. It could send globalization astray. It will be hard to realize the full benefits of trade, for example, if essential countries are unable to enforce safety standards and trade laws. Fixing these problems may require a new style of international diplomacy that relies less heavily on deals such as treaties with central governments. Instead, specific contracts might be written directly with the segments of society that are best administered and most able to change their behavior. Taming the volcanic growth in Chinese emissions of greenhouse gases, for example, may depend less on whatever deal is crafted with Beijing and more on specific commitments that the West can work out with bosses in the Chinese power sector. How can China be a "responsible stakeholder" in the world economy if it can't actually follow through with commitments it makes in the international arena?

As the pundits gaze at the coming Asian century, they have wondered how Asia's new powers will reshape the world. But the big challenge in the coming Asian century may not be these new countries' burgeoning strength but their weakness.

"The Shape of Things to Come," a conference presented by the Stanford Program on Regions of Innovation and Entrepreneurship on January 17-18, 2008, featured keynotes by John Hagel, co-author of The Only Sustainable Edge and Co-Chairman of the Deloitte Center for Edge Innovation, and Dr. Henry Chesbrough, Executive Director of the Center for Open Innovation at the Haas School of Business at UC Berkeley and author of Open Innovation.

The keynotes bookended Thursday's forum, "New Patterns and Paradigms in Global Innovation Networks," and were a prelude to Friday's academic workshop, "A Global Perspective on Regional Innovation Indicators." Hagel's talk focused on the need for a more explicit taxonomy of innovative collaboration and discussed the "huge need to define pragmatic migration paths"--routes that the average manager and company can take to reach the opportunities that normally are only accessible to cutting-edge companies.

The forum closed with a presentation by Dr. Henry Chesbrough, who provided an overview on the globalization of innovation in the Chinese semiconductor industry, which he sees as split into a "globally oriented, globally competitive" industry segment and a domestically-oriented segment with "backward technologies" and lacking access to capital. The question, he explained, is how China will shift its resources, now entrenched in the latter, to the former, competitive segment.

Chesbrough finished with a discussion of intellectual property rights (IPR) in China, looking at flows of knowledge and current IPR challenges; he mentioned some surprising developments--the rise of businesses to "promote the legal exchange of IP" and the growth of a domestic constituency for stronger IPR--and discussed future implications for IPR in China.

In between the keynotes, the forum featured sessions on innovation in internet services in China, the role of venture capital as a network builder, and discussions on two rapidly moving industries: cleantech and thin film transistor LCD displays.

Conference materials, including presentations and audio files, will be made available on the SPRIE website.

Once the jewel in the crown of the formidable British Empire, India has been surrounded by myth for years. After gaining independence in 1948, this often misunderstood country found itself faced with a new sense of freedom -- and along with it, enormous burdens and challenges. While exotic, mysterious, and seductive, it has also become an economic force to be reckoned with. With the fourth largest economy in the world, the largest youth population on Earth, and a thriving middle class, India is the second-most-preferred destination for foreign investment. But very few Americans truly understand what a rich and powerful country it has become -- or its role as a global power, center of outsourcing, and potential partner with the United States.

From the country's thriving film industry to its burgeoning high-tech industry, as well as its attempts to stabilize its economy, India Arriving offers a fascinating glimpse into the real India, with all of its assets and all of its faults.

Author Rafiq Dossani goes beneath the veil surrounding India and considers the many ways it has begun to emerge onto the world stage. He explores its birth as an independent nation and forces like political shifts, social reform, and education that have helped to shape a new India. Honest and revelatory, India Arriving provides a deeper understanding of a country that promises to be the next major player in the world economy.

Pro: Not as Tempting

by Sabrina Siddiqui, intern, BusinessWeek, and a senior at the Medill School of Journalism at Northwestern University.

There is no doubt that over the last decade, India fortified its rule over the shared services and outsourcing (SSO) sector. Access to low-wage yet skilled workers allowed local global technology services giants Infosys (INFY), Tata Consultancy Services (TACSF), and Wipro (WIT) to employ tens of thousands of Indians to do work for such multinational corporate clients as Bank of America (BAC), Microsoft (MSFT), and Ericsson (ERIC).

But a recent study by Frost & Sullivan consolidates the idea that India's outsourcing has already peaked, and there are a number of factors to blame:

The Rupee Riddle. Earlier this year, the Indian rupee appreciated 8.4% against the U.S. dollar and touched 41.14 to the dollar, its highest rate in nine years. A significant reason for concern for the outsourcing sector, the upward value of the rupee continues to put a squeeze on earnings. By April, 2007, it had cut margins by about 2.5 percentage points.

Cost (In)Efficiency. Companies looking to outsource have long seen India as their most cost-efficient vehicle. But with wage inflation running 15% to 25% per year, India can no longer use the siren song of its labor being the cheapest. Competitors like China can offer their services at a lower cost, while firms like Infosys are stuck recruiting from outside the country, because the comparable Indian staff is growing too expensive.

That Age-Old Infrastructure. As much as the economy continues to boom, how long can it sustain its position when IT operations spend considerably on backup systems to fight regular blackouts? And the 300,000 engineering students who graduate each year may be short of the level needed to support modernization of infrastructure and industry growth. (Not to mention that the peculiarly accented "Doug Smith" on the computer help desk is a little too hard for U.S. callers to comprehend.)

So if you assume you're being rerouted by tech support to a call center in Bangalore, guess again. It seems India's grasp on the SSO market is at long-term risk, and it just so happens that your call might be answered by someone in Shanghai.

Con: Plenty of Spice Left

by Rafiq Dossani, Stanford University and Martin Kenney, University of California, Davis

Notwithstanding the occasional news stories about companies returning work earlier offshored to India, the logic behind offshoring and its financial impact (both on outsourcing firms operating in India and their American clients) remains intact. First, the logic: A fresh engineer costs $8,000, including benefits, on average in Bangalore. Even a "Google-quality", presumably equivalent to the best Google can hire anywhere (in fact, Google offers its India recruits the option of working in Silicon Valley if they so desire) costs $30,000. These wages are much lower than in the U.S. and will remain that way for at least a decadeespecially if the ambitious graduation targets of Indian education policymakers are realized.

Of course, there are problems in doing work long distance: Coordinating the work of global teams is costlier than coordinating such work locally. The intellectual property issues could be important. But offshoring is now tried and tested enough, and large corporations are deeply committed to it.

By 2010, many large multinational corporations like IBM (IBM) will have their largest workforces in India. This is creating a relatively rich ecosystem in a number of Indian cities, especially Bangalore.

Already, for a number of these firms, their Indian operations are being declared global centers of excellence, whose value goes well beyond just cost savings. Undoubtedly, some smaller firms have faced high initial costs, but even they, particularly the technology firms of Silicon Valley, have committed to Indian operations. Firms such as Infinera (INFNO) and HelloSoft have substantial Indian operations that are critical to their success. For them to retreat would require a major reorientation of their business strategy.

The appreciating rupee will, like rising wages, affect offshoring decisions. However, the Indian system integrators such as TCS, Infosys, and Wipro, which are also being squeezed by costs, have experienced profits rising at about 35% a year for the past decade and enjoy margins in excess of 20%. This provides ample room to absorb rising costs.

There can be little doubt that the Indian ecosystem is maturing. However, the growth of offshoring to India has not peaked.

Reprinted by permission from BusinessWeek.