Innovation

Technological innovation and the transfer of the resulting intellectual property rights are indispensable to the economies of the European Union and the United States. Consequently, the antitrust treatment of IP licensing has gained increased significance. Currently, technology transfer is a fundamental incentive to innovation, enabling those who undertake major investments in research and development to achieve optimal financial gain from their goods and services.

This study will analyze intersectoral linkages via trade in intermediates across industries, and the changing industrial structure of the EU, with a view to identifying possible unexploited potentials of the interrelationship between manufacturing and services for European growth and implications for employment. It will further provide a comprehensive analysis of determinants of international outsourcing of services and its effects on firm productivity, employment and innovation in EU countries.

The study on the role of multinational companies and supply chains in innovation will summarize patterns of internationalisation of the knowledge-creating and knowledge-sourcing activities of multinational enterprises and provide new evidence on the complementarity or substitutability between the R&D activities of the headquarters and its foreign affiliates.

Authors
Adam Gorlick
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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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In her presentation "Russian Science Policy: Before and During the Economic Crisis," Irina Dezhina will outline the major characteristics of the R&D sector in Russia and offer an analysis of government science policy on the eve of the global financial crisis. She will also discuss the various reactions to the financial crisis in Russia, both by the federal government and the science sector, including companies investing in R&D. Finally, Dezhina will analyze the effectiveness of the Russian government's anti-crisis policy in terms of its impact on supporting science and innovation.

Irina Dezhina is a Head of Division at the Institute for the World Economy and International Relations of the Russian Academy of Sciences, Moscow. She also teaches the course of “Modern Problems of Russian Science and Innovation Policy” at the State University – Higher School of Economics. Dezhina earned her candidate degree in science and technology policy studies in 1992 from the Institute of National Forecasting of the Russian Academy of Sciences, and doctorate degree – in 2007 from the Institute for the World Economy and International Relations of the Russian Academy of Sciences.

She was Senior Research Fellow at the Analytical Center on Science and Industrial Policy, a think tank for the Russian Ministry of Science and Technology Policy and State Committee on Industrial Policy (1993-1995). Dezhina was also a Fulbright Scholar at the MIT Program “Science, Technology, and Society” (1997), and worked as Science Policy Analyst at Stanford Research Institute International, Washington, DC, USA (1998-1999). For twelve years (1995-2007) she worked at the Institute for the Economy in Transition (Moscow), a Russian think-tank. She has served as a consultant for the World Bank, OECD, and New Eurasia Foundation, and the U.S. Civilian Research and Development Foundation (since 1999). Dezhina has more then 150 publications including 6 monographs.

Jointly sponsored by the Forum on Contemporary Europea and the Center for Russian, East European and Eurasian Studies.

Encina Hall West Conference Room, W208

Irina Dezhina Head of Division at the Institute of World Economy and International Relations, Russian Academy of Sciences; Leading Research Fellow, Institute for the Economy in Transition, Moscow; Consultant, U.S. Civilian Research and Development Foundation Speaker
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Swedish Minister of Employment, Sven Otto Littorin, will present the strategies of the Swedish Government for handling the financial crisis and the challenges on the labor market. He will talk about the previous Swedish financial crisis in the 1990's, when he had a central role in handling the crisis. Salvaging the Swedish Banking System at that time is today much discussed as the model for the present US banking crisis. Sweden starts its Presidency of the European Union on July 1, 2009, a role which will encompass the addressing of these issues. Minister Littorin will be the president of the European Council of Ministers for Employment, Social Policy, Health and Consumer Affairs.

The presentation is co-hosted by the recently launched VINNOVA-Stanford Research Center of Innovation Journalism and the Forum on Contemporary Europe.

Peter Wallenberg Learning Theater (Rm 124), Wallenberg Hall

Sven Otto Littorin Swedish Minister of Employment Speaker
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Latvia is a country that has come through a crisis before; can it do it again? Professor Stranga examines the current crisis in Latvia, a country much evolved over the past 50 years. He focuses on a variety of social, economic, and political factors in assessing how Latvia can move forward.

Synopsis

Prof. Stranga begins by examining what he calls Latvia’s “first great crisis” from 1929-1933. At the time, Latvia was a democracy, a member of the League of Nations, but critically had no security guarantees and was stuck between Nazi Germany and Soviet Russia. Prof. Stranga explains that this crisis was overcome by the dictatorship of Karlis Ulmanis, whose regime lasted from 1934 until the Nazi occupation. Those years were seen as the ‘Golden Years,’ times of economic flourishing and national freedom from occupation. Prof. Stranga reveals this period had long lasting effects on the national psyche of Latvia.

To Prof. Stranga, Latvia is in a very different situation today. He argues that these are times of very limited sovereignty, particularly for his country. Prof. Stranga explains that this is mainly due to Latvia’s dependence on the EU, NATO, and the IMF which provide economic and military security. Prof. Stranga identifies the effects of Karlis Ulmanis’ regime as the perception in Latvia that a ‘strong man’ is needed to guide Latvia out of its current crisis. However, the necessity for Latvia to remain a democracy is made clear by the help it receives from the organizations mentioned above.

Although the help is clearly needed, Prof. Stranga feels that its consequences are often very painful. The IMF’s conditions for essentially saving Latvia’s economy include cutbacks in medical assistance and a reduction of teachers and schools, facets of public life deeply engrained in Latvia’s culture. In addition, Prof. Stranga examines the question of energy security. He looks particularly at Latvia’s absolute dependence on Russia exhibited by the fact that Gazprom’s first foreign office is in Latvia, and the fact that this has perhaps hindered Latvia’s progress.

At the same time, it seems clear that Prof. Stranga sees this crisis also as an opportunity. Firstly, he argues that now is probably the time to not be shy but to look for alternative energy sources such as nuclear energy, something Prof. Stranga further discussed when answering questions. Moreover, Prof. Stranga believes there are too many bureaucratic positions, and the crisis is an opportunity to cut these off and direct funding elsewhere. In addition, he feels the crisis is a chance to reconstruct exports. In particular, Prof. Stranga would like to see Latvia leaning more towards innovation rather than timber or agriculture. Finally, Prof. Stranga addresses Latvia’s issue of an internally divided society, particularly between Latvians and Russian speakers. He analyzes Latvian Russians’ diminishing impact as Russia’s economy falters but also expresses concern at the fact that Russian influence in Latvia seems to be heavily dependent on Russia’s economic state.

Prof. Stranga kindly takes the time to briefly answer a few questions and raises several issues in the process. Prof. Stranga cites Latvia's population reduction as perhaps the "greatest" problem it faces. However, he feels reassured by the help of the friendly states of Scandinavia and other organizations across the world. At the same time, Prof. Stranga explains such organizations are not having an entirely positive impact. In particular, he argues against the "inhuman" approach of solely focusing on cutting back capital of the IMF which he feels is an assault on Latvian life.

About the speaker

Aivars Stranga is professor and chair of the Department of History at the University of Latvia. He is the author of seven monographs and more than 150 scholarly and general publications on Latvian domestic and foreign policy andinternational relations between 1918 and 1940, and Latvian foreign policy from 1991 to 2000. Professor Stranga was a distinguished visiting professor at Stanford in 2003, teaching courses on Baltic History and the History of the Holocaust in the Baltics.

Jointly sponsored by the Forum on Contemporary Europe, Stanford Humanities Center, Department of History, Taube Center for Jewish Studies, and Center for Russian, East European and Eurasian Studies.

Encina Ground Floor Conference Room

Aivars Stranga Professor of History Speaker University of Latvia
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Professor Hedlund explores a shift in focus in Europe away from the 'Brussels vs. Moscow' attitude by proposing strategic interaction in what he calls the 'corridor countries.' He discusses why there is a variety of outcomes in terms of economic success in these countries, in particular the strain of rapid deregulation in 1991 in the Soviet Union. Professor Hedlund also examines the challenges for these countries in Europe now.

Synopsis

In 'Creating a New Europe,' Professor Hedlund begins by discussing the choice the European Union had when they met in the Netherlands in 1991. He argues policymakers could have widened the concept of European integration through free trade and economic cooperation which would have led to unlimited expansion options towards the East. However, Prof. Hedlund argues they decided instead to deepen this notion of 'the United States of Europe' through a currency, flag, and constitution leading to an exclusionary approach. Now, in 2008, there is new opportunity with new members in the EU. Problems such as Russia's interaction with its neighbors which were formerly seen as external issues are now internal issues affecting Brussels. Rather than being 'grateful children' as Jacques Chirac infamously put it, these 'corridor states' are decentralising the game between Brussels and Moscow. Prof. Hedlund argues we must look for more substantial success in internal dynamics in these 'corridor states,' states which were formerly part of the U.S.S.R. and are now part of the EU or are hoping to be in the near future. To Prof. Hedlund, these states are in a good position to act as credible brokers for strategic interaction between the EU and Russia, as well as between each other, such as Lithuania's intervention during the Orange Revolution.

Prof. Hedlund explains how these ‘corridor countries’ were seen as homogenous in 1991 but now have a great diversity in economic outcomes. Much of this can be attributed to the over eager embracement of a market economy by Russia in 1991 and the hardship it caused. In addition, Prof. Hedlund identifies the corrupted markets which exploited the natural resources available following the collapse of the Soviet Union. Moreover, Prof. Hedlund cites that the ‘rent seeking’ attitude of the Russian government was not reciprocated in all former Soviet states. Some were arguably lured by the prospect of EU membership while others might have drawn in by the examples of the successful and democratic Western countries.

To Prof. Hedlund, the challenge now is to develop forward movement in the areas of the ‘corridor countries’ that have become stalled. In addition, some of the markets in those areas must be developed away from their, as he puts it, ‘3rd world’ manners of operating. Accountability is crucial to a functioning economy to Prof. Hedlund. Finally, these ‘corridor countries’ can help in democracy building.

In taking questions, Prof. Hedlund further reiterates his belief in the necessity of accountability. In addition, he touches on his sense that European education is waning, and that this is setting back innovation. Moreover, Prof. Hedlund addresses the merits of a variety of diplomatic approaches.

About the speaker

Stefan Hedlund is an Anna Lindh Research Fellow at the Stanford Forum on Contemporary Europe. He is professor of Soviet and East European Studies at Uppsala University, Sweden. Before 1991, his research was centered on the Soviet economic system. Since then, he has been focusing on Russia's adaptation to post-Soviet realities. This has included research on the multiple challenges of economic transition as well as the importance of Russia's historical legacy for the reforms. With a background in economics, he has a long-standing interest in problems related to the Soviet economic system, and the attempted transition that followed in the wake of the Soviet collapse. More recently, his research has revolved around neo-institutional theory, and problems of path dependence. Among sixteen authored and coauthored titles in English and Swedish, he is the author of Russian Path Dependence (2005), and the forthcoming co-edited volume Russia Since 1980: Wrestling with Westernization (Cambridge, 2009.) Professor Hedlund has received numerous awards including fellowships at the Davis Center for Russian Studies, Harvard University; the Slavic Research Center, Hokkaido University; and at the Kennan Institute, Washington DC.

Daniel and Nancy Okimoto Conference Room

Department of East European Studies
Uppsala University
Gamla Torget 3, III
Box 514, 751 20 UPPSALA
Sweden

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Professor of East European Studies, Uppsala University
Visiting Scholar, Forum on Contemporary Europe (December 2008)
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PhD

Stefan Hedlund is Professor of East European Studies at Uppsala University, Sweden. A long-standing specialist on Russia, and on the Former Soviet Union more broadly, his current research interest is aimed at economic theories of institutional change. He also has a devouring interest in Russian history, which he has sought to blend with more standard theories of economic change. He has been a frequent contributor to the media, and has published extensively on matters relating to Russian economic reform and to the attempted transition to democracy and market economy more generally. His scholarly publications include some 20 books and close to 200 journal and magazine articles. His most recent monographs are Russian Path Dependence (Routledge, 2005), and Russia since 1980: Wrestling with Westernization (Cambridge University Press, 2008), the latter co-authored with Steven Rosefielde.

 

Stefan Hedlund Professor of Soviet and East European Studies Speaker Uppsala University, Sweden
Seminars
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