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The United States belongs to various organizations and networks that encompass countries on both sides of the Pacific Ocean. The East Asia Summit (EAS) is not among them. Should the US try to join? This working paper by Donald K. Emmerson answers that question with a qualified yes: Despite formidable difficulties affecting President Obama's schedule of foreign travel, his administration should try to "ease" the US into the Summit, initially as a guest of the host country.
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Leaders from different sectors came together this past Friday to tackle the challenges of transforming the way we produce and consume energy, as well as discussing ways of supporting small businesses and entrepreneurs in the energy sector.

The Energy Innovation Conference was a partnership of the White House, federal agencies, businesses, and the Kauffman Foundation, to address how to advance innovations in (clean) energy.

 

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In mid April, FSI convened a special conference on Technology, Governance, and Global Development, to examine how technical innovation solves, or fails to solve, the problems of chronic global underdevelopment.  Experts from business, medicine, philanthropy, academia, government and non-governmental organizations, along with young Stanford alumni, addressed technology's ability to help secure gains in health, economic development, agricultural innovation, food security, and human development.

With a wealth of expertise and on-the-ground experience, panelists tackled central issues and engaged in spirited debate, animated by moderator Philip Taubman.  "The Promise of Information and Communications Technology" examined whether technology can transform lives of individuals, even in poorly governed countries, finding encouraging evidence in technology-based medical and health services and novel approaches to economic development, including sharing vital information and banking via mobile phones. 

A panel of young Stanford alumni discussed their entrepreneurial efforts that led to the development of a low-cost, lifesaving incubator for low birth weight babies, the FACE AIDS program begun at Stanford that now has 20 chapters and has contributed some $2 million for treatment of people with AIDS in Africa, a new Global Health Corps to train health care workers, and other innovations to save lives in underserved areas.

Condoleezza Rice, former Secretary of State and National Security Advisor, gave the lunchtime keynote with a focus on why democracies are more effective and ultimately more efficient in delivering economic development. Democracies are better at protection of rule of law and property rights, she noted. Democracies are less corrupt, more in touch with their people, more stable, and better able to deliver the benefits of human capital development, health, and education to their population as a whole.

A third panel on "Governance, Innovation, and Service Delivery" addressed how innovative institutions and technologies could overcome poor governance and deliver needed services in underdeveloped regions. "Despite extraordinary growth in our technical capacity to prevent and treat child illness and death, we are seeing stagnation or a rise in mortality rates of children under five in some areas," said pediatrician Paul Wise. "This reflects gross failures in delivering highly efficacious health interventions." Some 9 million children still die each year, and 65 percent of child deaths in unstable areas are preventable, he noted. Wise has launched a new program to improve child health in areas of unstable governance through new integrated technical and political strategies.

A fourth session on "Creative Markets for Technical Innovation" honed in on the institutions, innovations, and incentives needed to stimulate development of products and services that address the needs of the poor. Panelists focused on pharmaceuticals, agricultural innovation, use of mobile technologies to share information on best practices, improved food security through innovative technology - such as solar-powered irrigation to expand growing seasons, crops, and incomes, and the development of human capital in China through rigorous evaluation, field trials, and nutritional intervention.

Among the experts addressing these vital issues were Google.org's Megan Smith, BP Solar's Reyad Fezzani, Center for Global Development President Nancy Birdsall, Gates Foundation Director of Agricultural Development Sam Dryden, Gilead Science's Clifford Samuel, dynamic Stanford alumni Nava Ashraf ‘97, Jared Cohen ‘04, Jane Chen ‘08, and Jonny Dorsey ‘07, and FSI's Coit D. Blacker, Joshua Cohen, Stephen D. Krasner, Paul H. Wise, Rosamond L. Naylor, and Scott Rozelle.

FSI Payne Lecturer Bill Gates, Co-chair of the Bill & Melinda Gates Foundation and Chairman, Microsoft, gave an address on "Giving Back: Finding the Best Way to Make a Difference."  He urged students to become involved in the central issues of global healthincluding the need to reduce child mortality through more vaccines and better delivery systemsand education, saying we need to find out "what works" and use the Internet to share lessons learned globally.

"We need to shift talent toward bigger needs," Gates said, urging students to provide the passion and ideas to drive us forward in health, education, and energy.  To make a difference, Gates advised, "Get your hands dirty, do the hard work in the actual environment, early in your career."  Telling students that he is looking for "great ideas," he challenged them to post answers on the Gates Foundation Facebook wall to three questions: What problems are you working on? What draws you in? How will you draw other people in to work on solutions to the world's great challenges.

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Executive summary:

Statoil was founded in 1972 as the national oil company (NOC) of Norway.  Along with Brazil's Petrobras, Statoil today is a leader in several technological areas including operations in deep water.  With its arm's length relationship to the Norwegian government and partially-private ownership, it is generally considered to be among the state-controlled oil companies most similar to an international oil company in governance, business strategy, and performance.

Statoil's development and performance have been intimately connected to its relationship with the Norwegian government over the years.  The "Norwegian Model" of distinguishing Statoil's commercial responsibilities in hydrocarbons from regulatory and policy functions granted to other government bodies has inspired admiration and imitation as the canonical model of good bureaucratic design for a hydrocarbons sector. 

However, the reality is that Norway's comparative success in hydrocarbons development, and that of Statoil, has been about much more than a formula for bureaucratic organization.  Belying the notion of a pristine "Norwegian Model" that unfolded inexorably from a well-designed template, the actual development of Norway's petroleum sector at times was, and often still is, a messy affair rife with conflict and uncertainty.  But Norway had the advantage of entering its oil era with a mature, open democracy as well as bureaucratic institutions with experience regulating other natural resource industries.  Thus far, the diverse political and regulatory institutions governing the petroleum sector-and governing the NOC-have collectively proven robust enough to handle the strains of petroleum development and correct the worst imbalances that have arisen. 

Mark Thurber and Benedicte Tangen Istad make the following six principal observations from their research.

First, Norway's policy orientation from the start was focused on maintaining control over the oil sector, as opposed to simply maximizing revenue.  As a result, the country was more concerned with understanding and mitigating the possible negative ramifications of oil wealth than with any special advantage that could be gained from it. 

Second, the principal means through which Norway was able to exert control over domestic petroleum activities was a skillful bureaucracy operating within a mature and open political system.  Civil servants gained knowledge of petroleum to regulate the sector through systematic efforts to build up their own independent competence, enabling them to productively steer the political discourse on petroleum management after the first commercial oil discovery was made.  Robust contestation between socialist and conservative political parties also helped contribute to a system of oil administration that supported competition (including between multiple Norwegian oil companies as well as international operators) and was able to evolve new checks and balances as needed.

Third, Statoil did play an important role in contributing to the development of Norwegian industry and technological capability, in large part because it had the freedom to take a long-term approach to technology development.  With a strong engineering orientation and few consequences for failure as a fully state-backed company, Statoil developed a culture valuing innovation over development of a lean, commercially-oriented organization.  These priorities may not have always contributed to maximization of government revenues in the short run-costs came to be perceived as high in Norway (for various reasons not all related to Statoil) and Statoil was on occasion responsible for significant overruns.  However, the focus on innovation contributed to significant technological breakthroughs and helped spur the development of a high-value-added domestic industry in oil services.

Fourth, the formal relationship between Statoil and the government has become more arm's-length as Norway's resources and oil expertise have matured.  Under its first CEO, experienced Labour politician Arve Johnsen, Statoil aggressively flexed its political muscles to gain special advantages in licensing and access to acreage.  As domestic resources began to mature, Statoil's leadership (starting with Harald Norvik in 1988, and continuing through the tenures of subsequent CEOs Olav Fjell and Helge Lund) focused more on forging an independent corporate identity and governance structure that would allow the company to compete effectively abroad. 

Fifth, notwithstanding changes in their formal relationship, it has remained impossible to sever the close ties between the Norwegian state and a company with the domestic significance of Statoil.  These residual ties can manifest in various ways, including: 1) the effect on policy decisions of direct personal connections between Statoil leaders and politicians; 2) persistent "Norway-centric" influences on Statoil's strategy even in the larger context of efforts to internationalize; and 3) public pressure from politicians who continue to see themselves as Statoil's masters.  Such pressures can affect large strategic companies, public or private, in any country, but their effect is magnified by Norway's small size and Statoil's importance within it as the largest petroleum developer.

Sixth, Statoil's experience thus far casts doubt upon the conventional wisdom that NOC-NOC connections provide material benefit in opening resource access around the world.  To the extent that such linkages are important, Statoil would seem to be among the best-positioned to benefit from them as both a highly competent producer and a company that might be sympathetic to the needs of resource-rich countries.  However, there are few instances so far where Statoil's status as an NOC has been an obviously decisive factor in unlocking resources that would otherwise be off-limits.

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Mark C. Thurber
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On February 26 and 27, 2010, the SPRIE-Stanford Project on Japanese Entrepreneurship hosted its second annual conference, "Entrepreneurship and Innovation in Japan" at the Bechtel Conference Center in Encina Hall at Stanford University, made possible through generous support from Cisco Systems and The Miner Foundation.

Scholars from universities across Japan and the United States gathered to present and discuss new papers seeking to understand the trends and dynamics of business and innovation in Japan through the lens of entrepreneurial companies, and institutions that affect those companies.

The conference agenda is below; presentation and other files will be linked as they are available.

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"Freedom and solidarity and partnership belong together," German Chancellor Angela Merkel told a capacity crowd at Stanford on April 15 in her only public speech during a four-day visit to the United States. "They must be indivisible for us to master the challenges ahead." Merkel was introduced by Stanford President Emeritus Gerhard Casper who said the Chancellor was considered to be "among the most powerful, most thoughtful, and most principled stateswomen and statesmen in the world." In her speech, Merkel chose to address "21st century responsibilities which can only be successfully met by acting together," with a focus on the common global security challenge, addressing the international financial and economic crisis effectively, and meeting the challenge of climate change and global warming, which she termed "one of the great challenges of mankind."

Twenty years have passed since the Berlin Wall fell and Angela Merkel – then a budding politician who grew up in communist East Germany – first saw the potential and promise of a free world.

Now the chancellor of Germany, Merkel says freedom can only flourish with international cooperation aimed at making the world safer, cleaner and more economically stable.

"Freedom and solidarity and partnership belong together," Merkel told a capacity crowd at Stanford's Dinkelspiel Auditorium on Thursday after being introduced by President Emeritus Gerhard Casper. "They must be indivisible for us to be able to master the challenges ahead."

But Merkel's speech – the only one she delivered during a four-day trip to the United States – showed that those alliances often come at a cost. Speaking hours after four German troops were killed in fighting in Afghanistan, Merkel expressed her condolences while calling the war a "mission that guarantees our freedom and security."

"It is a sad experience for us in Germany," she said. "It is an experience we share with you in the United States."

With polls showing the war becoming increasingly unpopular in Germany, Merkel said she accepts and respects "doubts" about whether the conflict is necessary or right. But her commitment to fighting the war is unwavering.

She told the audience at Dinkelspiel that the fallout of the international financial crisis "will be with us for a long time to come." But strengthening global trade agreements, steering away from protectionism and bolstering innovation will put financial markets back on the right course, she said.

European financial woes are a volatile topic in Germany right now. The country has offered to pitch in about $11 billion for a Greek economic rescue package, a move that has sparked criticism of Merkel's government.
The bailout poses a serious political risk, as Merkel’s political party faces regional elections in Germany's biggest state on May 9. The party of Christian Democrats must win in order to maintain its majority in the Bundesrat, parliament's upper house.

Merkel did not directly address the Greek economic situation during her speech, but she did stress the need for countries to work together and share responsibility for strengthening the world's financial future.
"We need a new global financial architecture," she said. "We need rules that prevent a whole community of nations from being damaged because individuals have made mistakes."

She said the players behind the world's largest markets have to take an interest in emerging economies and "sit down and reflect together with them" how to establish a strong and prosperous global economy.

A scientist by training, Merkel earned a doctorate in physics and worked as a chemist at a scientific academy in East Berlin. While she was a student, Stanford "was just a far, far-away scientific paradise unreachable from behind the Iron Curtain." And when the Berlin Wall came down, she found herself pulled to a life of politics.

But first, she and her husband celebrated their newfound freedom by doing what they had long dreamed of. They visited California. The chancellor reminisced about the trip as she concluded her speech at Dinkelspiel, standing in front of a backdrop displaying Stanford's German motto: Die Luft der Freiheit weht.

The wind of freedom blows.

Jonathan Rabinovitz contributed to this report.

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