From how failure drives innovation to the role of government in supporting entrepreneurship, two expert professors at Stanford led a training session for executives from Chinese state-owned enterprises (SOE) as part of the 2011 Cisco China 21st Century Enterprise Leader Program (ELP) hosted by Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) on March 22, 2011.

Professor William F. Miller, Co-Director of SPRIE, kicked off the session with a stimulating presentation on Silicon Valley's habitat for innovation. He pointed out that turning technology into business was the essence of Silicon Valley, and a favorable business, social and political environment in the region had facilitated the process. Despite the emergence of other venture capital locations, Silicon Valley scooped up almost 40% of venture deals and dollars across the U.S. in the last quarter of 2010, according to the MoneyTree Report.

The "restless pioneer spirit" of Stanford had always played a crucial role in the effective interaction between research institutes and industry, Miller argued.

Following Miller's discussion of features of Silicon Valley's entrepreneurial habitat, William Barnett, Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations at the Stanford Graduate School of Business, shared his thoughts on how to discover successful business models.

"Having great technologies is not enough," said Barnett. "Entrepreneurs are like scientists. Successful business models are learned from failures." Barnett encouraged the leaders present to create a working environment within which failure would be tolerated. He further urged them to accelerate the learning process by asking what might go wrong.

The purpose of the SPRIE session, which is part of a 12-day US-based program organized by Cisco Systems and China's State-owned Assets Supervision and Administration Commission (SASAC), is to help the SOE executives understand how to foster innovation and to drive operational excellence. The delegation is composed of SASAC officials, Peking University professors and leaders from 17 SOEs in China, including Southern Power Grid, Three Gorges Corporation, China Telecom, China Unicom, China Mobile, China FAW Group, Harbin Electric Corp., Anshan Iron and Steel Group, Baosteel Group, China Ocean Shipping Company, China Eastern Airlines, China Oil and Foodstuffs Corporation, State Development and Investment Corporation, China Merchants, China Railway Group and China Railway Construction.

As Japan's troubles continue, CISAC's Thomas Isaacs discusses the future of the nuclear industry.

CISAC: My understanding is that Three Mile Island set back the industry because afterward there was no appetite for building new reactors.

Thomas Isaacs: It's not clear that it was Three Mile Island. It was certainly in that time frame. Others would say it was a combination of a reduction in the demand for electricity at that time and the emergence of alternative energy sources that were less expensive to get started. You saw less of an appetite not just because of the concern about Three Mile Island -- although that was probably a contributing factor -- but because it just no longer made sense to build new, huge, expensive power plants, particularly nuclear power plants.

CISAC:  Experts now say that what's going on in Japan is worse than Three Mile Island. If so, how might that affect the building of nuclear reactors in the future?

Isaacs: The effects are probably unknown and unknowable now. We'll need to have a much better idea of what actually transpires, and how it is handled by the Japanese. We'll also have to see what the consequences are and what the perceived consequences are, and the ability of the Japanese government and utilities to generate a sense of confidence, which is lacking right now. All of that will have an effect and it will be different for a variety of countries, but it's hard to speculate. My own assumption is that in countries where there is more of a national, organized effort to build nuclear, principally in places like China and India, you might not see as much effect as you might see in countries where nuclear has been much more of a controversial issue, and where the public has much more engagement in the decision-making process. In emerging countries that now have no or very few plants, you might see much more controversy. 

CISAC: What about regulation? Might there be more regulation, both here and in China, India, and elsewhere?

Isaacs: I think we don't know that yet either. You would hope that people would view this as a sobering event -- an opportunity to learn lessons for the future. As a result of Three Mile Island and then Chernobyl we have organizations like the World Association of Nuclear Operators, who come together from all over the world to share lessons learned. This will be an example of a place where you would hope they will take this very seriously -- I'm sure they will -- and they will ask very searching questions about whether our regulations or anybody's regulations are appropriate given what we've experienced. There's no question that the track record for U.S. reactors has been outstanding and getting better over the last 20 to 30 years. Should that lead to a sense of comfort? No. It should lead to a sense that we've always had an obligation to ask ourselves if we're doing everything that makes sense, and we can continue to learn from experience and improve.

CISAC: The issue of nuclear waste is important in this country and elsewhere. How might it fit into what we're seeing in Japan right now?

Isaacs: There is spent nuclear fuel, which is a waste form if it's not reprocessed. That's what would ultimately go into the repository, and that potentially is one of the problems that's causing the release of radioactivity at some of these plants. More broadly, you need to feel confident you know how to handle waste, both in the short term and in the very long term, because it is potentially hazardous for geologic time periods. Most people who work in that business believe that disposing of it in a geologic repository, in a stable geologic formation that has the right characteristics, is a very fine way to solve that problem, and pretty much every country that has decided to move toward nuclear waste disposal has chosen that approach. But from a societal point of view and a political point of view, it's a very tough problem. It's not just the science and technology problem.

Each president of the United States enters office thinking he will be able to define the agenda and set the course of America's relations with the rest of the world. And, almost invariably, each confronts crises that are thrust upon him-wars, revolutions, genocides, and deadly confrontations. Neither Woodrow Wilson nor FDR imagined having to plunge America into world war. Truman had to act quickly, and with little preparation, to confront the menace of Soviet expansion at war's end. JFK, for all his readiness to "bear any burden" in the struggle for freedom, did not expect his struggle to contain Soviet imperial ambitions would come so close to the brink of nuclear annihilation. Nixon was tested by a surprise war in the Middle East. Carter's presidency was consumed by the Shah's unraveling and the Iranian revolution. George H.W. Bush rose to the challenge of communism's collapse and Saddam Hussein's invasion of Kuwait. Clinton squandered the opportunity to stop a genocide in Rwanda and waited tragically too long before stopping one in Bosnia. George W. Bush mobilized the country to strike back after September 11, but, in the view of many, he put most of his chips in the wrong war.

In the eye of the historical storm, and in the absence of a challenge as immediate and overpowering as September 11, Pearl Harbor, or the Nazis' march across Europe, it is risky to identify any set of world events as game-changing. Yet that is what many analysts, including myself, believe the Arab revolutions of 2011 are. And a surprising number of specialists-including hard-eyed realists like Fareed Zakaria-have seized upon the crisis in Libya as a defining moment not just for the United States in the region but for the foreign policy presidency of Barack Obama as well.

To date, one could say that Obama has had a surprisingly good run for a foreign policy neophyte. He has revived the momentum for arms control with a new START treaty with Russia, while pressing the issue of human rights within Russia. He has managed the meteoric rise of China decently, while improving relations with India. He has not cut and run from Iraq-as most Republicans were convinced he would. And he has ramped up but at least set limits to our involvement in Afghanistan. As the Arab revolutions have gathered momentum, he has increasingly positioned the United States on the side of democratic change. His statements and actions have not gone as far as democracy promotion advocates (like myself) would have preferred, but they have overridden cautionary warnings of the foreign policy establishment in the State Department, the Pentagon, think tanks, and so on. Without Obama's artful choreography of public statements and private messages and pressures, Hosni Mubarak might still be in power today.

All of this, however, may appear in time only a prelude to the fateful choice that Obama will soon have to make-and, one fears, is already making by default in a tragically wrong way-in Libya. Why is Libya-with its six million people and its significant but still modest share of global oil exports-so important? Why must the fight against Muammar Qaddafi-a crazy and vicious dictator, but by now, in his capacity for global mischief, a largely defanged one-be our fight?

When presidents are tested by crisis, the world draws their measure, and the impressions formed can have big consequences down the road. After watching Jimmy Carter's weak and vacillating posture on Iran, the Soviets figured he'd sit on the sidelines if they invaded and swallowed Afghanistan. They misjudged, but Afghanistan and the world are still paying the price for that misperception. In the face of mixed messages and a long, cynical game of balance-of-power, Saddam too, misjudged that he could get away with swallowing up Kuwait in 1991. When the United States did not prepare for war as naked aggression swept across Asia and Europe, the Japanese thought a quick strike could disable and knock out the slumbering American giant across the Pacific. When Slobodan Milosevic and his Bosnian Serb allies launched their war of "ethnic cleansing," while "the West"-which is always to say, first and foremost, the United States-wrung its hands, many tens of thousands of innocent people were murdered and raped before President Bill Clinton finally found the resolve to mix air power and diplomacy to bring the genocidal violence to a halt.

If Muammar Qaddafi succeeds in crushing the Libyan revolt, as he is well on his way to doing, the U.S. foreign policy establishment will heave a sad sigh of regret and say, in essence, "That's the nasty business of world politics." In other words: nasty, but not our business. And so: not their blood on our hands. But, when we have encouraged them to stand up for their freedom, and when they have asked for our very limited help, it becomes our business. On February 23, President Obama said: "The United States ... strongly supports the universal rights of the Libyan people. That includes the rights of peaceful assembly, free speech, and the ability of the Libyan people to determine their own destiny. These are human rights. They are not negotiable. ... And they cannot be denied through violence or suppression." Yet denying them through murderous violence and merciless suppression-with a massacre of semi-genocidal proportions likely waiting as the end game in Benghazi-is exactly what Qaddafi is in the process of doing.

Barack Obama has bluntly declared that Qaddafi must go. The Libyan resistance, based in Benghazi, has appealed urgently for the imposition of a no-fly zone. Incredibly, the Arab League has endorsed the call, as has the Gulf Cooperation Council. France has recognized the rebel provisional government based in Benghazi as Libya's legitimate government-while Obama studies this all. Can anyone remember a time when France and the Arab League were ahead of the United States on a question of defending freedom fighters?

There is much more that can be done beyond imposing a no-fly zone. No one in their right mind is calling for putting American boots on the ground in Libya. But we can jam Qaddafi's communications. We can, and urgently should, get humanitarian supplies and communications equipment, including satellite modems for connection to the Internet, to the rebels in Benghazi, where they can be supplied by sea. And we should find a way to get them arms as well. Benghazi is not a minor desert town. It is Libya's second largest city, a major industrial and commercial hub, and a significant port. Through it, a revolt can be supplied. If Benghazi falls to Qaddafi, it will fall hard and bloodily, and the thud will be heard throughout the world.

Time may be running out. As the Los Angeles Times reported yesterday, "All that stands between Kadafi and rebel headquarters in Benghazi are disorganized volunteers and army defectors spread thinly along the coastal highway." They have passion and courage, but they lack weaponry, strategy, and training. Like so many rebel movements, they need time to pull these all together. Time is what a no-fly zone and an emergency supply line can buy them.

Libya's rebels are pleading for our help. "Where is America?" asked one of them, quoted in the L.A. Times, who was manning a checkpoint in Port Brega. "All they do is talk, talk, talk. They need to get rid of these planes killing Libyan people." The "they" he was referring to was the Americans, beginning with their leader-one would hope, still the leader of the "free world"-President Obama.

Many prudent reasons have been offered for doing nothing. It is not our fight. They might lose anyway. We don't know who these rebels really are. We have too many other commitments. And so on. The cautions sound reasonable, except that we have heard them all before. Think Mostar and Srebrenica. And we had a lot of commitments in World War II as well, when we could have and should have bombed the industrial infrastructure of the Holocaust. As for the possibility that the rebels might lose-a prospect that is a possibility if we aid them and a near certainty if we do not-which would be the greater ignominy: To have given Libya's rebels the support they asked for while they failed, or to have stood by and done absolutely nothing except talk while they were mowed down in the face of meek American protests that the Qaddafi's violence is "unacceptable"?

Oh yes. There is also the danger that China will veto a U.N. Security Council Resolution calling for a no-fly zone. Part of us should hope they do. Let the rising superpower-more cynical than the reigning one ever was-feel the first hot flash of hatred by Arabs feeling betrayed. Go ahead, make our day.

Presidents do not get elected to make easy decisions, and they certainly never become great doing so. They do not get credit just because they go along with what the diplomatic and military establishments tell them are the "wise and prudent" thing to do. This is not Hungary in 1956. There is no one standing behind Qaddafi-not the Soviet Union then, not the Arab League now, not even the entirety of his own army. That is why he must recruit mercenaries to save him. Qaddafi is the kind of neighborhood bully that Slobodan Milosevic was. And he must be met by the same kind of principled power. For America to do less than that now-less than the minimum that the Libyan rebels and the Arab neighbors are requesting-would be to shrink into global vacillation and ultimately irrelevance. If Barack Obama cannot face down a modest thug who is hated by most of his own people and by every neighboring government, who can he confront anywhere?

For the United States-and for Barack Obama-there is much more at stake in Libya than the fate of one more Arab state, or even the entire region. And the clock is ticking.