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A fundamental transformation of services is underway, driven by developments in information and communications technology (ICT) tools, the uses to which they are being put, and the networks on which they run. Services were once considered a sinkhole of the economy, immune to significant technological or organizational productivity increases. Now, they are widely recognized as a source of productivity growth and dynamism in the economy that is changing the structure of employment, the division of labor, and the character of work and its location. Yet, the actual character of this transformation is often obscured by the increase in jobs labeled as services and by a focus on the digital technologies that, certainly, are facilitating this transformation. This transformation, central to the growth of productivity and competition in the economy, poses basic policy and business choices.

The core of our story of the services transformation is not about the growth in quantity or value of the activities labeled services, the conventional emphasis of much of the writing about services. Nor is it about the revolution in digital technology. Rather, it is about how the application of rule-based information technology tools to service activities transforms the services component of the economy, altering how activities are conducted and value is created.

There are significant implications for how firms compete. Services are increasingly the way that firms pursue value-added activities to avoid ever-faster commoditization of products, that is to avoid competition based solely on price when market offerings are relatively similar. However, the unbundling of services activities themselves accelerates this commodification, since competitors have the same efficiency-enhancing business process and infrastructure services available to them. Firms increasingly become bundles of services purchased on markets, and at the same time some of those in-house business functions that are maintained are then offered as services. A consequence is that the distinction between products and services blurs, as manufactured products are increasingly embedded within and recast as services offerings. Clearly, traditional sectoral boundaries break down, as information and services offerings bring previously unrelated firms into direct competition.

Likewise, the consequences for business organization, production, and work are profound, just as work was transformed by the evolution of manufacturing. The automation of basic activities both frees, but also requires, professionals to perform more advanced tasks. And the analytical tasks of managing information flows generated by ICT-enabled services often require a different set of skills than providing the service itself.

Capturing the possibilities from the services transformation presents new policy challenges for governments and regions. Services are deeply rooted in social rules, conventions, and regulations. Consequently, capturing the value possibilities inherently means recasting the rules, regulations, and conventions in which the services are embedded.

The development and deployment of ICT-enabled services should be considered a form of production. As ICT has become integral to the creation and delivery of services, ICT-enabled services have taken on the characteristics of production normally assigned solely to manufacturing. ICT systems that deliver the services have to be designed, developed, built, and implemented and they are very much open to innovation and productivity increases. Investments are often industrial in scale.

ICT-enabled services are the latest phase in a long history of production innovation. The history of manufacturing production progressed along distinct epochs, each with distinct manufacturing processes, management structures, labor practices, productivity, and outputs. The development of ICT tools and their application to services activities has driven a shift to the latest epoch.

The advent of Cloud Computing, emerging as the next dominant computing platform, accelerates the transformation of services. Cloud Computing, a distinct set of business models and performance attributes (not simply a code-word for everything online), enables new business models, transforms existing strategies, lowers the bar for new entrants, and raises a myriad of policy issues.

From a policy standpoint, the question is how to conceive, design, develop and build and deploy the new system. The “good” jobs, high value added functions, are in the innovative development and deployment of these systems. Policy makers need to employ strategies that will help communities and firms to develop the competencies required for this new form of production.

The continuing debate in political, economic and public policy circles about the relative value of manufacturing jobs and service-sector jobs is increasingly irrelevant to policy debates in the real economy. Just as it is inaccurate to assume that manufacturing jobs are secure and well paid, it is also inaccurate to consider service jobs to be dead-end, low-wage, unskilled positions. 

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Oxford University Press in "The Third Globalization: Can Wealthy Nations Stay Rich in the Twenty-First Century?"
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Kenji E. Kushida
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Nearly $370,000 has been awarded to Stanford researchers trying to improve conditions in some of the world’s poorest places.

The money comes from the Global Underdevelopment Action Fund, which was established four years ago by the Freeman Spogli Institute for International Studies to provide seed grants to faculty designing interdisciplinary research experiments.

“It’s money that we can deploy quickly and that we can use in a very flexible way,” says Stephen D. Krasner, deputy director of FSI and chair of the Action Fund awards committee. “We can target specific kinds of activity that we’re interested in — not just because we think the activities themselves are worthwhile, but because we think they can really contribute to the interdisciplinary community that we’re building at FSI.”

The 12 Action Fund grants range from projects with immediate social impact to those designed to build an academic foundation for future work. The seed grants provided by the fund often are the first steps toward a sustainable research project funded by other sources, as well. Krasner says the grants are also awarded in part to impact policy and help solve problems that benefit from a multifaceted approach.

One such project comes from Stephen P. Luby, a professor of medicine and new senior fellow at FSI and the Stanford Woods Institute for the Environment. His project aims to curb pollution from Bangladeshi brick kilns, which may seem like a strange topic for Luby, who studies infectious diseases. But by broadening the viewpoint, the issue is more complex than only replacing the kilns with more efficient models. Solving the problem requires an understanding of social pressures and government regulations as well.

“I’m interested in working with people who want to solve real problems,” Luby says, explaining what brought him to Stanford. “FSI collaboration can really convene the group.” The “intensely interdisciplinary” nature of the project made it perfect for FSI, he says.

“That kind of project can have a real impact on health,” says Krasner, who adds that interdisciplinary research is key. “It typifies the kind of work that we like to support with the Action Fund.”

Another project will study electricity in East Africa, headed by economics professor and FSI Senior Fellow Frank Wolak. Households powered by solar batteries are found throughout the region, but until recently it has been difficult to determine how the power is being used within the home. Wolak’s team will use iPad tools to track household appliance usage and investigate how households are making decisions about power consumption. The double-faceted approach will answer crucial questions related to the distribution and use of power in the developing area.

Mariano-Florentino Cuéllar, co-director of FSI’s Center on International Security and Cooperation (CISAC) and incoming director of FSI, was awarded an Action Fund grant to study refugee communities around the world. Cuéllar, a law professor, will focus on a renewed approach to refugee camps for the United Nations High Commissioner for Refugees (UNHCR), at the U.N.’s request. In addition to Cuéllar’s background in law, the project will also employ students to help rethink camp logistics, architects focused on improving camp design and CISAC’s expertise in maintaining a collaboration with UNHCR.

In three previous rounds of funding since the Action Fund was established in 2010, $694,000 has been awarded to support 19 research projects.

Throughout the spring, past projects will be featured during Action Fund Fridays in Encina Hall. Topics will range from medical technology in India to poverty concerns in rural Africa. Events will be held at noon on March 22, April 26, May 10, May 24 and June 7. 

For more information, visit http://fsi.stanford.edu/events/series/2900 or contact Elena Cryst at 650.723.3369.

 

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In his State of the Union address on February 12 President Obama announced that the US will set up a Transatlantic Trade and Investment Partnership with the European Union. The US and the EU will soon start negotiations to create the world’s largest free trade area. The agreement will eliminate tariff barriers and harmonize regulatory and technical standards. It is argued that this will add up to two percent to GDP. The US and the EU already trade goods and services worth $ 2.7 billion per day. This seminar will discuss the politics and economics of such an agreement.

This event is part of The Europe Center's series on the "European and Global Economic Crisis."

Reuben W. Hills Conference Room

Encina Hall
Stanford University
Stanford, CA 94305

(650) 723-0249 (650) 723-0089
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Senior Research Scholar at The Europe Center
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Christophe Crombez is a political economist who specializes in European Union (EU) politics and business-government relations in Europe. His research focuses on EU institutions and their impact on policies, EU institutional reform, lobbying, party politics, and parliamentary government.

Crombez is Senior Research Scholar at The Europe Center at the Freeman Spogli Institute for International Studies at Stanford University (since 1999). He teaches Introduction to European Studies and The Future of the EU in Stanford’s International Relations Program, and is responsible for the Minor in European Studies and the Undergraduate Internship Program in Europe.

Furthermore, Crombez is Professor of Political Economy at the Faculty of Economics and Business at KU Leuven in Belgium (since 1994). His teaching responsibilities in Leuven include Political Business Strategy and Applied Game Theory. He is Vice-Chair for Research at the Department for Managerial Economics, Strategy and Innovation.

Crombez has also held visiting positions at the following universities and research institutes: the Istituto Italiano di Scienze Umane, in Florence, Italy, in Spring 2008; the Department of Political Science at the University of Florence, Italy, in Spring 2004; the Department of Political Science at the University of Michigan, in Winter 2003; the Kellogg Graduate School of Management at Northwestern University, Illinois, in Spring 1998; the Department of Political Science at the University of Illinois at Urbana-Champaign in Summer 1998; the European University Institute in Florence, Italy, in Spring 1997; the University of Antwerp, Belgium, in Spring 1996; and Leti University in St. Petersburg, Russia, in Fall 1995.

Crombez obtained a B.A. in Applied Economics, Finance, from KU Leuven in 1989, and a Ph.D. in Business, Political Economics, from Stanford University in 1994.

Christophe Crombez Speaker
Timothy Josling Speaker
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The event is now full. Please RSVP here to add your name to the waitlist. An email will be sent out on the day of the event to let you know of your status.

Join us for a panel of 5 successful and sought after VCs, advisors & mentors who have worked with hundreds of Silicon Valley firms, including Affymax, Apple, Codexis, Digital Fuel, Synopsys, Wild Pockets, and Yahoo. Then dive into one of five small group sessions led by the speakers on topics including new essential tools, how to select initial team members, and how to use resources efficiently. Finally, get to know the speakers and fellow attendees during the networking reception while enjoying light snacks and beverages. The event’s interactive format will give entrepreneurs from the Stanford community insight into what kills most companies and what skills you need to survive... and prosper!

Participating in the panel and leading the breakout sessions will be:

Steven P. Bird, Co-Founder & General Partner | Focus Ventures
John Montgomery, Partner | Montgomery & Hansen
Jeff Grabow, West Region Venture Capital Leader| Ernst & Young
Cindy Padnos, Founder & Managing Partner | Illuminate Ventures
Bob Pavey, Partner | Morgenthaler Ventures

Marguerite Gong Hancock, Associate Director | SPRIE, Stanford Graduate School of Business (panel moderator)

THIS EVENT IS OPEN TO STANFORD STUDENTS, ALUMNI, FACULTY, & STAFF

SPACE IS LIMITED SO AN RSVP IS REQUIRED

QUESTIONS: Contact Rustin Crandall with SPRIE at Rustin.Crandall@GSB.STANFORD.EDU

This event is part of Stanford E-Week 2013.

Oberndorf Event Center, 3rd Floor North Building, Stanford Graduate School of Business

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Cloud Computing is rapidly transforming not only computing, but the very fundamentals of how we process, store, and use information—and information is the very basis of civilization.  Cloud Computing is historically unique by simultaneously being an innovation ecosystem, production platform, and global marketplace. While the technology and business models are almost inherently global in scale, national politics and regulations will powerfully influence how Cloud Computing unfolds across the world. Critical issues such as information privacy (who gets to see and use information), security (how to protect information from unauthorized access), and communications network policy (the political economy of broadband and wireless networks) will be settled at the national or regional level. There are powerful tensions as US-based multinational firms are rapidly taking over the global Cloud Computing industry. What are the appropriate frameworks to understand how the competitive dynamics are unfolding? What are the options for national-level players? How should we understand the policy issues as they unfold? What is the role of Japan and Asia as this transformation unfolds?

Kenji Kushida is the Takahashi Research Associate in Japanese Studies at the Walter H. Shorenstein Asia-Pacific Research Center. He holds a PhD in political science from the University of California, Berkeley, and was a graduate research associate at the Berkeley Roundtable on the International Economy. Kushida has an MA in East Asian studies and BAs in economics and East Asian studies, all from Stanford University.

Philippines Conference Room

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Former Research Scholar, Japan Program
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Kenji E. Kushida was a research scholar with the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center from 2014 through January 2022. Prior to that at APARC, he was a Takahashi Research Associate in Japanese Studies (2011-14) and a Shorenstein Postdoctoral Fellow (2010-11).
 
Kushida’s research and projects are focused on the following streams: 1) how politics and regulations shape the development and diffusion of Information Technology such as AI; 2) institutional underpinnings of the Silicon Valley ecosystem, 2) Japan's transforming political economy, 3) Japan's startup ecosystem, 4) the role of foreign multinational firms in Japan, 4) Japan's Fukushima nuclear disaster. He spearheaded the Silicon Valley - New Japan project that brought together large Japanese firms and the Silicon Valley ecosystem.

He has published several books and numerous articles in each of these streams, including “The Politics of Commoditization in Global ICT Industries,” “Japan’s Startup Ecosystem,” "How Politics and Market Dynamics Trapped Innovations in Japan’s Domestic 'Galapagos' Telecommunications Sector," “Cloud Computing: From Scarcity to Abundance,” and others. His latest business book in Japanese is “The Algorithmic Revolution’s Disruption: a Silicon Valley Vantage on IoT, Fintech, Cloud, and AI” (Asahi Shimbun Shuppan 2016).

Kushida has appeared in media including The New York Times, Washington Post, Nihon Keizai Shimbun, Nikkei Business, Diamond Harvard Business Review, NHK, PBS NewsHour, and NPR. He is also a trustee of the Japan ICU Foundation, alumni of the Trilateral Commission David Rockefeller Fellows, and a member of the Mansfield Foundation Network for the Future. Kushida has written two general audience books in Japanese, entitled Biculturalism and the Japanese: Beyond English Linguistic Capabilities (Chuko Shinsho, 2006) and International Schools, an Introduction (Fusosha, 2008).

Kushida holds a PhD in political science from the University of California, Berkeley. He received his MA in East Asian Studies and BAs in economics and East Asian Studies with Honors, all from Stanford University.
Kenji E. Kushida Takahashi Research Associate in Japanese Studies Speaker Shorenstein Asia-Pacific Research Center, Stanford University
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For several decades, Southeast Asia’s tracts of dense, old-growth rainforest have served as fertile ground for lumber, and much land has been converted to agriculture. Now, palm oil plantations are being planted where forests once stood.

In 2011, Indonesia, one of the region’s most prosperous countries, instituted a two-year moratorium on clearing new areas of forest, which is set to expire this May and has been criticized as having several loopholes. Other countries, including Cambodia and Myanmar, are losing forests rapidly.

Out of concern for climate change, international initiatives such as Reduced Emissions from Deforestation and forest Degradation (REDD+) have aimed to promote conservation and sustainable development in countries with significant forest cover. But these efforts do not always support local needs, and can inadvertently have negative impacts.

Tim Forsyth, a Lee Kong Chian NUS-Stanford Distinguished Fellow, speaks about the gap between conservation efforts and economic and social development in Southeast Asia. He is visiting Stanford this quarter from the London School of Economics and Political Science where he is a reader in environment and development at the Department of International Development.

What major types of forest management do we see across Southeast Asia today?

A number of countries have put laws in place to restrict illegal logging, and have established national park areas. These are usually old-growth rainforests that restrict logging and agriculture. The problem with national parks is that they put so many restrictions on land use that the vulnerable populations living around them either suffer or are forced to cut other trees. I have spent some years working in poorer villages in Indonesia and Thailand on the edge of protected forests, and usually conservation policies avoid the fact that people need to get livelihoods somehow. Government policy should acknowledge how these people are vulnerable to changes in crop prices and the availability of land, or else these people might be forced into breaking the rules of national parks.

There is also production forest, which usually includes forest plantations. These can include softwoods such as pine, or hardwoods such as teak — and increasingly oil palm for food and biofuels. Forest plantations are attractive to governments and businesses because they earn money and can provide timber for construction and exports. Sometimes, plantations also gain carbon credits, although this is not a lot of money so far. In terms of conservation, destroying old-growth forest and replacing it with a monoculture plantation is not good for biodiversity. It also does not benefit those local people who want to harvest forest products or use part of the land for agriculture.

Finally, there are community forests that are supposed to be places where people can grow food, live, and have forest cover. The definition of “community forest,” however, varies from place to place. In Thailand, for example, the way the government defines it is not very different from a conservation area, and consequently there is not much space for agriculture. The Philippines, on the other hand, is more decentralized and local people can shape the nature of the forest landscape more. Corruption, however, is a problem.

Is there an ideal model that successfully supports sustainable development? How does your research approach this issue?

There has been much progress in collaborations that involve willing governments, international advisors, and local actors — often in accordance with an international agreement such as the Convention on Biological Diversity. These collaborations are more useful than a single actor working alone, and they acknowledge a wider range of objectives.

A new initiative is Reducing Emissions from Deforestation and forest Degradation (REDD+). This is meant to encourage governments to slow down deforestation by rewarding them financially through carbon credits. But REDD+ has a number of challenges. The main problem is that the value of the credits is so low at the moment. REDD+ also overemphasizes forest cover, rather than forest quality. This means that if a satellite image of a country shows a lot of forest cover, that is good according to REDD+. But this gives no indication as to the biodiversity or the diversity of livelihoods inside a forest. It is a green light to all of the people who want fast-growing tree plantations, which makes them money and supplies them with wood for construction. In addition, it keeps a government happy because it supplies their country with timber and tax revenue, but this is not necessarily what you would call sustainable development.

There are elements of good models in different places, and it really depends on one’s viewpoint. Nepal offers a good example of community forestry because, in principle, it aims to engage local people more effectively and equally, and so can combine local development with the protection of national forests. From a development perspective, some forms of conservation can hurt poorer people and actually undermine conservation efforts. Therefore, in my work, I try to promote policy that acknowledges the needs of the more vulnerable populations. My research tries to make climate change policy more relevant to development processes in Southeast Asia. In my current project, I am seeing how policy recommendations about forests can be reshaped and reinterpreted locally in developing countries in order to address local interests. My goal is to understand how expert knowledge about climate change can be governed more effectively in order to enhance both development and conservation in Asia with better outcomes for everybody.

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What can people do in their everyday lives to help combat climate change?

The practical problem of dealing with forest destruction and climate change in Southeast Asia is also a function of social and economic trends. As countries become more prosperous, more and more people live in megacities, drive cars, live in air-conditioned apartments, and frequent shopping malls.

A couple of years ago in Bangkok, I took lots of photographs of t-shirts printed with global warming messages and of people carrying reusable bags. When I was there recently, all of these things had disappeared. In other words, there is a tendency for people to think of conservation efforts as a fashion trend.

I do not think that any city in Asia is doing enough. We have to start planning cities in ways that use fewer greenhouse gases, and also to encourage people to realize that they can be real agents of change. At the moment, many urban citizens believe they can implement climate change policy by managing rural and forested landscapes. Instead, they need to realize the problems of these approaches, and to see what they can do themselves.

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Tim Forsyth stands in a cleared section of national parkland in Sumatra, Indonesia. | Courtesy Tim Forsyth
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