Stanford University

North Korea: 2005 and Beyond

Paragraphs

Ten years ago, in the summer of 1995, it was fashionable in Washington and Seoul to predict the imminent collapse of North Korea's political and economic systems, and even the state itself. While clearly an errant forecast, it is easy to see why pundits and analysts thought as they did. Kim Il-Sung had died. Kim's son and successor, Kim Jong-Il, was failing to lead just as the country suffered a massive agricultural failure. A nuclear-weapons dispute with the United States had forced a costly full-scale mobilization of the country's million-man army. It was likewise clear that North Korea's industry had shut down; night imagery of the peninsula showed, quite literally, that the lights were out in North Korea.

Ten years on, this volume aims to rectify misconceptions and increase collective understanding about North Korea. It is intended to present a snapshot of what is happening in North Korea now -- economically, politically, and socially. To be sure, much of the country remains in shadow, and there is much we still do not know. Moreover, issues of North Korean nonproliferation are so often binary that compromise becomes difficult, if not impossible.

The distinguished contributors -- specialists in politics, economics, human rights, and security -- advocate a subtler, more multidimensional approach to the North Korea problem. Offering cautionary perspective on this poorly understood place, they highlight recent positive developments and suggest solutions to seemingly intractable problems. Most attest that economics, commerce, and integration -- all arenas in which slow progress is being made -- may be the most powerful forces for change on the Korean peninsula. This timely book encourages thoughtful, pragmatic discussion about North Korea and seeks to light the road ahead, for the Korean Peninsula and beyond.

(This book is now out of print. You may download the full text here.)

All Publications button
1
Publication Type
Books
Publication Date
Authors
Philip Yun
Gi-Wook Shin
Book Publisher
Shorenstein APARc
Book Publisher External URL

Korean Food, Korean Identity: The Impact of Globalization on Korean Agriculture

Paragraphs

One of the few ways to get a taste of North Korea, short of leaping through numerous hoops to get a visa to visit the country, is to eat cold noodles (naengmyen). Most South Korean cities and even a few American ones offer several types of North Korean-style noodle restaurants. The version often prepared in Pyongyang, North Korea's capital, is mul naengmyen, or cold noodles in broth. It is served in a large metal bowl and looks like a flowering mountain rising up from the sea. Artfully balanced atop the mound of noodles made from buckwheat flour are julienned cucumbers, several slices of beef, half a hardboiled egg, and a few pieces of crisp Korean pear. When prepared Hamhung-style -- named after the industrial city on North Korea's east coast -- noodles are made from sweet potato flour and often topped with raw skate, which has a slightly ammoniac flavor.

The signs in the South advertising Northern-style cold noodles are a reminder of the Korean War and the division of the peninsula. After the Korean War, refugees from the conflict set up stalls in the markets of Seoul to sell the "taste of the north" to those who could no longer travel there. The recipes they brought with them to the south were sometimes the only valuables they carried. In the 1990s, a new wave of North Koreans came to the South and established naengmyen restaurants. Hailing from the North lends a certain authenticity to the preparation of the dish. Whether prepared by the refugees of the 1950s and their descendents, the defectors of the 1990s, or North Koreans themselves in Pyongyang or Hamhung, cold noodles are something that North Koreans are widely credited with doing better than South Koreans.

But the way naengmyen is "consumed" in the South reveals the great disparity between the two countries. There are many jokes in South Korea about the number of North Korean defectors who have only this one marketable skill. Since cooking in Korea is largely a woman's job, the close association of North Koreans with the production and sale of cold noodles subtly feminizes and, according to patriarchal Korean values, devalues them. North Koreans are thus second-class citizens, both those who are unemployed (the majority) and those who are employed only to provide service to the real "breadwinners" of the country. Anthropologist Roy Richard Grinker relates how South Korean textbooks and popular culture often depict North Korea as the younger brother of the more advanced South Korean older brother. Given the cultural associations of naengmyen, wife to husband might be the more appropriate analogy. A recent Joongang Ilbo Photoshop cartoon reinforces this sexist gloss on inter-Korean relations by depicting South Korean President Roh Moo Hyun dressed as a Choson-era husband with North Korean leader Kim Jong Il as his bride.

In a divided country, cold noodles serve as an important reminder of a common culture. They also represent a unique contribution that the economically weaker North Korea can bring to the reunification process. But however tasty Pyongyang-style mul naengmyen may be, cold noodles ensure neither a sustainable livelihood for every North Korean defector nor an equal place at the reunification table for North Korea.

All Publications button
1
Publication Type
Policy Briefs
Publication Date
Journal Publisher
Shorenstein APARC
Authors

POSCO TJ Park Foundation NGO Fellowship Program

Authors
Heather Ahn
News Type
News
Date
Paragraphs

This fellowship program has been established, with the generous support of the POSCO TJ Park Foundation, to enable key personnel of Korean NGOs to spend time at leading North American universities gaining knowledge and experience that will further the development of NGOs in Korea.

The fellowship program will be supported by a consortium comprising Columbia University, George Washington University, Indiana University, Stanford University and the University of British Columbia. Each university will host two fellows each year for five years, starting in September 2006.

All News button
1

Losing the Links Between Livestock and Land

Paragraphs

Global meat production is becoming increasingly industrialized, spatially concentrated, and geographically detached from the agricultural land base. This Policy Forum reviews the process of livestock industrialization and globalization, and its consequences for water, nitrogen, and species-rich habitats in meat- and feed-producing regions often vastly separated in space. It argues that pricing and other policy mechanisms which reflect social costs of resource use and ecological change are needed to re-couple livestock and land in producer countries, drawing on examples from Europe and the United States. It also argues that consumers can play an important role in setting a sustainable course.

All Publications button
1
Publication Type
Journal Articles
Publication Date
Journal Publisher
Science
Authors
Rosamond L. Naylor
Henning Steinfeld
External URL

Researchers urge better understanding of true costs of industrial livestock production

Authors
Rosamond L. Naylor
News Type
News
Date
Paragraphs
CESP senior fellows Rosamond L. Naylor, Walter P. Falcon, and Harold A. Mooney released the findings of a new study on the impacts of an increasingly global livestock industry in the Policy Forum of the Dec. 9 issue of Science.

The turkey and ham many are eating this holiday season don't just appear magically on the table. Most are the end product of an increasingly global, industrialized system that is resulting in costly environmental degradation. Better understanding of the true costs of this resource-intensive system will be critical to reducing its negative effects on the environment, says an interdisciplinary team of researchers led by Stanford University's Rosamond Lee Naylor, Walter Falcon, and Harold Mooney.

"Losing the Links Between Livestock and Land" appears in the Policy Forum in the Dec. 9 issue of Science. It represents a synthesis of research by professors at Stanford University, the University of Virginia, the University of California at Davis, the universities of Manitoba and British Columbia in Canada, and the United Nations LEAD (Livestock Development and Environment) program within the Food and Agricultural Organization of UN.

"Sixty years ago, the link between the livestock production and consumption was much more clear and direct, with most consumers getting their meat and dairy products from small, family-owned farms," says lead author Naylor, an economist. Co-author Falcon agrees. "When I was growing up in Iowa, almost all farmers kept both chickens and pigs."

Today, meat consumption has sky-rocketed, and large-scale intensive livestock operations provide most of those products, both in the U.S. and around the world.

Particularly striking is the growth in demand for meat among developing countries, Naylor notes. "China's meat consumption is increasing rapidly with income growth and urbanization, and it has more than doubled in the past generation," she says. As a result, land once used to provide grains for humans now provides feed for hogs and poultry.

Numerous factors have contributed to the global growth of livestock systems, Naylor notes, including declining feed-grain prices; relatively inexpensive transportation costs; and trade liberalization. "But many of the true costs remain largely unaccounted for," she says. Those costs include destruction of forests and grasslands to provide farmland for corn, soybeans and other feed crops destined not directly for humans but for livestock; use of large quantities of freshwater; and nitrogen losses from croplands and animal manure.

Nitrogen losses are especially problematic, says James Galloway of the University of Virginia. "Once nitrogen is lost to the atmosphere or to water, it can have a large number of sequential environmental effects. For example, ammonia emitted into the atmosphere can in sequence affect atmospheric visibility, forest productivity, lake acidity and eventually impact the nutrient status of coastal waters."

Naylor cited Brazil as a specific example of the large impact on ecosystems and the environment. "Grasslands and rainforests are being destroyed to make room for soybean cultivation," she said. The areas are supplying feed to the growing livestock industry in Brazil, China, India and other parts of the world, leading to "serious consequences on biodiversity, climate, soil and water quality."

Naylor and her research team are seeking better ways to track all costs of livestock production, especially the hidden ones related to ecosystem degradation and destruction. "What is needed is a re-coupling of crop and livestock systems," Naylor said. "If not physically, then through pricing and other policy mechanisms that reflect social costs of resource use and ecological abuse."

Such policies "should not significantly compromise the improving diets of developing countries, nor should they prohibit trade," Naylor added. Instead, they should "focus on regulatory and incentive-based tools to encourage livestock and feed producers to internalize pollution costs, minimize nutrient run-off, and pay the true price of water."

She cited efforts in the Netherlands to track nitrogen inputs and outputs for hog farms as one approach. In the U.S., the 2002 Farm Bill provided funds for livestock producers to redesign manure pits and treat wastes, but she notes that much greater public and private efforts are needed to reduce the direct and indirect pollution caused by livestock.

In the end, though, it may be up to consumers to demand more environmentally sustainable approaches to livestock production. "In a global economy with no global society, it may well be up to consumers to set a sustainable course," she added.

Seed funding for the research was provided by the Woods Institute for the Environment, which supports interdisciplinary approaches to complex environmental issues. Naylor, Falcon and Mooney are affiliated with the institute and with the Center for Environmental Sciences and Policy in Stanford's Freeman Spogli Institute for International Studies.

In addition to Naylor, Mooney and Falcon of Stanford and Galloway of Virginia, co-authors are Henning Steinfeld of the United Nations Food and Agriculture Organization; Galloway; Vaclav Smil, University of Manitoba; Eric Bradford, University of California at Davis; and Jacqueline Alder, University of British Columbia.

All News button
1

The development and future of China's semiconductor industry

Authors
George Krompacky
News Type
News
Date
Paragraphs

A delegation from the China Semiconductor Industry Association (CSIA) headed by its president, Mr. Zhongyu Yu, visited Stanford University on November 5, 2005. As part of its visit on campus, the delegation was invited to speak at SPRIE's seminar series on the rise of China's innovation competence. Mr. Yu and his colleagues shared with the audience the latest developments in China's integrated circuit (IC) industry as well as their understanding of the underlying driving forces, the level of competency, the role of the government and China's integration into the global innovation system.

Phenomenal growth of China's IC industry

Mr. Yu first shared with the audience some striking data that clearly illustrated the growth of China's IC industry since 2000. In 2000-2004, the industry grew with a CAGR of 31% from $2.2 billion to $6.7 billion. In 2004, there were 670 IC companies employing a workforce of 130,000, of which 40,000 were engineers. The growth is pronounced throughout the value chain from IC design to IC manufacturing and IC packaging and assembly. In 2004, there were 476 IC design companies and their revenue reached $1 billion, an 81.5% increase from 2003. Domestic companies have made impressive inroads into the development and commercialization of a few specific IC products such as second generation ID cards, audio decode chips, third generation cell phone base band chips and MP3 chips. In IC manufacturing, there were a total of 39 fabrication plants by the end of 2004: one 12-inch plant, nine 8-inch plants and 29 4-inch to 6-inch plants. These plants generated a revenue of $2.24 billion in 2004, a 90% increase from 2003. Meanwhile, three more 12-inch plants are under consideration by SMIC, HHNEC and Hynix. IC packaging and assembly reached $3.49 billion in revenue in 2004.

Multiple forces drive the growth

What has been behind such phenomenal growth? Mr. Yu identified three major driving forces. First is the continuing growth of the domestic market that has provided new demand for outputs from the industry. China has become the largest manufacturing base for most consumer electronics products such as televisions, DVDs, personal computers and mobile phones. For example, in the year of 2004, China manufactured 74 million television sets and 230 million mobile phones. These consumer electronics products are fueling the growth of the China's domestic IC market. In 2004, the market reached $40 billion, making China the second largest IC market in the world with a global share of 22%. The second driving force has resulted from the reform of the financial system, which has substantially improved the investment environment--especially for foreign investment. Foreign investment now accounts for 80% of total investment in the IC industry, even when domestic bank loans are taken into account. Venture capital has become a considerable source of capital. $424 million was invested in 2004. The third driving force is the global recession of the IC industry after 2000. The recession exerted tremendous economic pressure for multinational corporations to relocate their manufacturing and R&D activities to China to take advantage of China's cost advantage.

China still weak in innovation in IC

While the growth of China's IC industry has been impressive, Mr. Yu also pointed out some noticeable weaknesses of the industry. The industry is dominated by low value-added IC packaging and assembly, which accounts for half of the industry's revenue. High value-added IC design work only generated 15% of the total revenue in 2004. Most of the 476 IC design companies are very small. In 2004, only 17 companies had revenues over 100 million RMB (which was about 12 million USD). Among them, only two had revenues over 500 million RMB (about 60 million USD). The technical competence of IC design companies is still very weak. Except for the few aforementioned emerging niches, IC design is very much lagging behind the cutting edge. Most domestic demand for IC is still met by import. As Mr. Yu pointed out, "all the micro components and memory [of domestically manufactured consumer electronics products] are imported."

Government policy

The government is well aware of these shortfalls and policies have been put in place to support the next-phase growth of the industry. Factor inputs need to be boosted. In terms of capital, Mr. Yu estimated that a total of $30 billion investment will be needed in the coming five years to fuel the growth of the industry. Yet, the government will cede its role as a director investor in any IC programs while promoting investments from other sources, being it bank loans, domestic private investment, foreign direct investment or venture capital investment. Human resource is another prime area for improvement since there is a serious shortage of experienced IC engineers. The government has put in plans to "cultivate 40,000 IC designers and 10,000 IC processing technologists" over the coming 6-8 years. More importantly, however, indigenous competence needs to be built. "Independent innovation" has been identified as a priority for public policy in China's 11th five-year development plan. Mr. Yu declared, "our goal is not to copy others' chips but instead to have our own."

China's integration into the global innovation system

Looking into the future, as China's IC industry and market continue to grow, Mr. Yu articulated for the audience the importance of China being integrated into the global innovation system. In the coming five years, there will be plenty of opportunities for Chinese companies and universities to collaborate with innovators from abroad, whether it is to shape next-generation technologies and technical standards, for multinational corporations to set up research and development centers in China, or for universities to collaborate on cutting-edge research. As Mr. Yu declared, "China welcomes mutually beneficial cooperation with American industry and academia in the area of [IC] manufacturing and the innovative work of R&D."

Biography of Zhongyu Yu

Mr. Yu Zhongyu has been engaged in semiconductor research and management for many years and is one of the leaders of China's integrated circuit industry. He has engaged in research and design of IC products and was honored with the National Science and Technology Award. Having joined the government in 1988, he was responsible for organizing and leading the IC project during "7th five-year plan" and "8th five-year plan"; he acted as a member of the leading group for the National "908" project and headed the construction leading group of the Huahong factory in the "909" project. These projects made important contributions to China's IC industry development. Mr. Yu has been the President of the China Semiconductor Industry Association since 2001.

All News button
1

A Systems Analysis of the A.Q. Khan Network (in plain English)

-

This presentation is based on a paper written by Anne Platt Barrows, Paul Kucik, William Skimmyhorn and John Straigis.

Paul Kucik is a Major in the U.S. Army. He served in Aviation units in a series of assignments, including Company Command. He then served as Assistant Professor in the Department of Social Sciences at the United States Military Academy. He later served as analyst and as deputy director of the U.S. Army Office of Economic and Manpower Analysis. He has a Bachelor of Science degree in Economics from the United States Military Academy and a Master of Business Administration from the Massachusetts Institute of Technology.

Anne Platt Barrows is a Member of the Technical Staff in the Advanced System Deployments department at Sandia National Laboratories in Livermore, California. She focuses on facility protection, primarily on defending facilities against attacks with chemical agents. She holds a B.S. degree in Electrical Engineering and a B.A. in Ethics, Politics, and Economics from Yale University.

William Skimmyhorn is a Captain in the U.S. Army. He has served in Aviation units in a variety of assignments including Bosnia, Kosovo and two tours in Korea. His jobs have ranged from Platoon Leader to Liaison Officer to Troop Commander. He is currently a dual Master's Student at Stanford University studying International Policy and Management Science and Engineering. He has a Bachelor of Science Degree in Economics from the United States Military Academy.

John Straigis is currently working as a Systems Engineer at Lockheed Martin Space Systems Company in Sunnyvale, California. He just celebrated his second anniversary with the company, and is presently in Special Programs. Concurrently, he is completing his second Master's degree from Stanford University, in Management Science and Engineering, with a focus on Decision and Risk Analysis. His first Master's, before beginning his career at Lockheed Martin, was in Aero/Astro Engineering, also from Stanford. For undergraduate, he attended Rose-Hulman Institute of Technology, in Terre Haute, Indiana, receiving double degrees in Chemical Engineering and Mechanical Engineering. Outside of work and school, he enjoys several sports, particularly ice hockey, in which he is the starting goaltender for the Stanford ice hockey team.

Download pdf
Download pdf

Reuben W. Hills Conference Room

Paul Kucik PhD Candidate Speaker Department of Management Science and Engineering, Stanford
Seminars

Gregory Freidin

Building 40, Room 41E
Stanford University
Stanford, CA 94305

(650) 725-0006
0
Professor of Slavic Languages and Literature, Emeritus
Freidin.jpg PhD

Education

  • Ph.D., Department of Slavic Languages and Literatures, University of California at Berkeley, June,1979. Dissertation: "Time, Identity and Myth in Osip Mandelstam: 1908-1921"
  • M.A., Department of Slavic Languages and Literatures, University of California at Berkeley, June 1974
  • Special Student, Brandeis University, 1972
  • The First State Institute of Foreign Languages, Moscow, USSR, 1969-1971
  • Secondary School, Moscow, USSR, 1964

Current courses

  • Tolstoy's War and Peace
  • Paradigms of Society and Culture in Literature and Film

Previous courses

  • The Age of Revolution
  • Tolstoy's Anna Karenina and the Social Thought of its Time
  • Proseminar in Literary Theory and Study of Russian Literature
  • Russia and the Other: A Cultural Approach
  • Russian Literature and the Literary Milieu of the NEP Period
  • Osip Mandelstam and the Modernist Paradigm

Selected publications

  • Russia at the End of the Twentieth Century: Culture and Its Horizons in Politics and Society. (Papers delivered at the Stanford University Conference, November 1998). Stanford, 2000. Ed. G. Freidin.
  • Russia at the Barricades: Eyewitness Accounts of the Moscow Coup (August 1991), ed. by Victoria Bonnell, Ann Copper and Gregory Freidin. Introduction by Victoria E. Bonnell and Gregory Freidin (M.E. Sharpe, 1994).
  • Russian Culture in Transition (Selected Papers of the International Working Group for the Study of Russian Culture, 1990-1991). Compiled, edited, and with an Introduction by Gregory Freidin. Stanford Slavic Studies 7 (1993)
  • American Federalists: Hamilton, Madison, Jay. Selections. With an Addendum of The Declaration of Independence, Articles of Confederation, and the Constitution of the United States. Translated into Russian, annotated and with an Introduction by Gregory Freidin. Leon Lipson, Consultant. Edited by V. & L. Chalidze. Benson, Vt.: Chalidze Publications, 1990.
  • A Coat of Many Colors: Osip Mandelstam and His Mythologies of Self, Presentation. Berkeley, Los Angeles and London: University of California Press, 1987.
  • Khrushchev Remembers: The Last Testament. Trans. and ed. by Strobe Talbott and Gregory Freidin (anonymously). With a foreword by Edward Crankshaw and an Intro. by Jerrold Schecter. Boston: Little, Brown, 1974. (For acknowledgement of Freidin's translation see Strobe Talbott's Introduction to Khrushchev: The Glasnost Tapes [Little, Brown &Co., 1990], p. viii).

Current projects

After a long detour into Russian contemporary culture, politics and society, Gregory Freidin, has returned to his old flame, the Isaac Babel project, a critical biography - as much of Isaac Babel as of the magnetic and elusive voice animating his compact and fragmented oeuvre. He hopes to finish the manuscript, A Jew on Horseback, in a few months. As a follow-up, he is planning, along with Gabriella Safran and Stephen Zipperstein (History and Jewish Studies), an international conference on Babel for the fall of 2003. Together with the Berkeley sociologist, Victoria E. Bonnell, he has begun research on a book-lingth study, tentatively entitled Conjuring up a New Russia: Symbols, Rituals, and Mythologies of national Identit, 1991-2002.

Professional activities

  • The Humanities Institute; Modern Languages Association; American Association for the Advancement of Slavic Studies
  • Contributing Editor, Znamia, Novoe literaturnoe obozrenie (Moscow), 1991-6
  • Editor, Stanford Slavic Studies, 1987-
Affiliated faculty at The Europe Center
CV

The World Is Not Flat: Globalization is Disequalizing

-

Nancy Birdsall is the founding president of the Center for Global Development. Prior to launching the center, Birdsall served for three years as Senior Associate and Director of the Economic Reform Project at the Carnegie Endowment for International Peace. Her work at Carnegie focused on issues of globalization and inequality, as well as on the reform of the international financial institutions. From 1993 to 1998, Birdsall was Executive Vice-President of the Inter-American Development Bank, the largest of the regional development banks, where she oversaw a $30 billion public and private loan portfolio. Before joining the Inter-American Development Bank, Birdsall spent 14 years in research, policy, and management positions at the World Bank, most recently as Director of the Policy Research Department.

Ms. Birdsall is the author, co-author, or editor of more than a dozen books and monographs. She has also written more than 75 articles for books and scholarly journals published in English and Spanish. Shorter pieces of her writing have appeared in dozens of U.S. and Latin American newspapers and periodicals.

Philippines Conference Room

Nancy Birdsall Speaker President, Center for Global Development
Seminars

Integrated circuit development in globalization - a China experience

Authors
George Krompacky
News Type
News
Date
Paragraphs

On November 1, 2005, SPRIE invited Jimmy Lee, Vice President and General Manager, Timing Solutions, Integrated Device Technology (IDT) to speak at SPRIE's seminar series on the rise of China in innovation. Lee shared his experience in running a full-blown integrated circuit (IC) product development center in China together with an informative account of China's rise in the IC industry.

The globalization of the IC industry and the rise of China

The commoditization of semiconductor technology is marked by the encapsulation of previously proprietary technologies into commercially available equipment and software design tools. This has substantially lowered the entry barrier for IC design. It has enabled the emergence of a new generation of companies in the Far East in backend assembly and testing as well as IC design. The process is further helped by advances in communication technology that eases access to and sharing of information across geographies. Meanwhile, the IC industry is shifting from being technology-driven to application/market driven. The integration of product development and market has become an important differentiator in global competition. These industry changes are coupled with changes in the worldwide market, mostly noticeably the rise of Asia as a significant market.

China is rising quickly as a significant player in IC. It has a huge pool of talent and many "returnees" - those who grew up in China, were educated in the West and have returned to China to work; they are essential in transferring competence from the West to China. China also enjoys substantial cost advantage while having fairly decent productivity. Starting from the 1990s, the government has invested heavily, and issued extensive regulatory incentives, to promote the semiconductor industry. As a result, according to Lee, in 2004, there were 102 IC test and assembly companies, 50 foundries and 457 IC design companies operating in China. They generated a total revenue of $4.4 billion.

IDT's product development venture in China

IDT is a major IC design company. Its workforce of 3,700 (1,500 in U.S.) has designed 1,300 IC products in 15,000 configurations. In fiscal year 2005, the company garnered a revenue of $645 million, 25% of which went into R&D. In the late-1990s, frustrated by the high turnover and the shortage of talent in Silicon Valley, it opened up an operation in

China. China's abundant and low-cost talent pool provided an opportunity. The company was also attracted to its budding telecommunication market, an area IDT had wanted to get into.

Luckily for IDT, "it just so happened that Newave Technology Corporation was available." Newave was the first IC design start-up in China. Founded by several Chinese returnees in 1996, the company had 100 some engineers developing telecommunication IC for the China market. In 2001, IDT acquired Newave for $85 million. At the time of acquisition, Newave was working on two products but its revenue was very small. Since then, Lee built it into a successful product development center.

Challenges for setting up a product development center in China

Setting up and operating a product development center in China is full of challenges. Lee grouped them into two areas.

The first is organizational challenges, from defining the mission of the organization to every aspect of human resource management: recruiting, training, retention, etc. From the beginning, the mission was to be a self-sufficient, whole product development center. "They basically have the responsibility to develop the entire product from the specification to the manufacturing transfer and they also have the entire infrastructure such as HR, finance and legal to be self-sufficient to support the local needs." Such positioning is crucial in China because the competition for talent is extremely intense and this generation of young engineers is very ambitious, many wanting to start their own business sometime in their life. They are often impatient with long-term strategy. Therefore, "if you want to have top-notch talent working for you, you have to challenge them constantly in technical areas." Picking the right leader is also a key. IDT decided that this person had to be born in China, grew up in China, be western trained and have worked in western companies. Such a combination is ideal because there are a lot of subtleties that are culture specific and one has to be born and grow up in China to get it. In the technical area, IDT hired a few long-term expatriates from headquarters. They are the real masters in their respective fields in IC design. This is where the leverage comes from: "You use one super high power master technical guy to leverage the intellectual labors of the local engineers," said Lee.

The second challenge stems from social-cultural differences. A few examples: communications is a big issue, not so much because of language barriers but because of differences in culture and the level of professionalism. As Lee stated, "...it's more of the mindset. It's very difficult at the beginning to teach them how to communicate, when to communicate and what to communicate." Secondly, social-culture norms shape a different level of standard in decision-making and judgment call. Lee needs to put a lot of effort into teaching the local engineers how to think from the customer's perspective. Thirdly, employees are loyal to individuals rather than the corporation. These social-cultural differences are an area where there is no shortcut. They have to be overcome with training. Training means taking every opportunity to educate the local workforce: formal training programs, informal one-on-one coaching, ongoing training-by-doing, training over hundreds of conference calls over the past 4-5 years, you name it. "To some extent, this is sort of the brainwashing process," commented Lee. "There is no shortcut. You just have to put in a lot of TLC - tender, loving care. This is very challenging."

IDT's positive experience in China

While IDT "did run into many, many of those challenges," its overall effort in China has been extremely positive. The local team now manages a dozen of products, which involves some original work. The headquarter team is using some of the intellectual property generated by the folks in China. The local team even presented a paper in this year's IEEE ISSC Conference. It is the first paper coming out of China presented at such a prestigious conference. Productivity and cost advantage are also evident. Lee estimated that "for the team here in the United States to develop the same number of products will probably take them twice as long in time and probably cost 4-5 times more. This is really a good deal for the company."

Future outlook

Looking ahead, Lee highlighted a few issues that will shape China's IC industry. Overall, it will be a fertile ground for IC product development because of the talent pool. The job market will remain red hot with rapid increase of wages and high turnover rates. There will be hundreds of start-ups because of the low entry barrier. However, many will lack management experience and business acumen. Duplication of investment and engineering effort for the same market will result in the industry consolidating into dozens of medium size companies. In ten years time, these survivors will become significant suppliers to domestic IC demand in emerging applications such as wireless communication and digital TV. All in all, as Lee pointed out, "one needs to marry the best of the East and the West to create a world-class company."

All News button
1
Subscribe to The Americas