November 4, 2011
Stanford Graduate School of Business launches institute to alleviate poverty with $150 million gift
The aim of the Stanford Institute for Innovation in Developing Economies is to stimulate, develop and disseminate research and innovations that enable entrepreneurs, managers and leaders to alleviate poverty in developing economies.
Robert "Bob" and Dorothy "Dottie" King (Photo: Courtesy of the Stanford Graduate School of Business)
The Stanford Graduate School of Business has established the Stanford Institute for Innovation in Developing Economies with a $150 million gift from Dorothy and Robert King, MBA '60. The gift is among the largest ever to Stanford University. The institute's aim is to stimulate, develop and disseminate research and innovations that enable entrepreneurs, managers and leaders to alleviate poverty in developing economies.
The institute's work is based on the belief that a critical route for economic growth is through the creation of new entrepreneurial ventures and by scaling existing enterprises. "Entrepreneurship, innovation and improved management are powerful ways to help alleviate poverty," said Stanford University President John L. Hennessy. "With tremendous foresight and compassion, the Kings have made a seminal gift that leverages Stanford's knowledge, resources and human capital to make a real difference in the world for many years to come."
The idea for the gift came out of home stays that founding donors Dorothy "Dottie" and Robert "Bob" King have offered to international students at Stanford for more than four decades. They witnessed firsthand the impact that education and entrepreneurship can have at both an individual level and a larger scale. One student, Xiangmin Cui, PhD '97, introduced Bob to his friend Eric Xu, who joined Internet engineer Robin Li to launch a Chinese-language search engine. Bob, an investment partner at Peninsula Capital in Menlo Park, Calif., provided seed funding. He and Dottie were on hand in 2005 when the company, Baidu, made its debut on NASDAQ. The Internet giant now employs more than 10,000 people in China. Another King home stay student, Andreata Muforo, MBA '09, from Zimbabwe, brought peers from her global study trip to Africa to the King home for dinner. "We heard how those firsthand experiences compelled some of the MBAs to return for internships in Africa," said Dottie King. "We saw the direct connection between the learning experience and the motivation to make change."
"We believe that innovation and entrepreneurship are the engines of growth to lift people out of poverty," said Bob King, who with his wife also founded the Thrive Foundation for Youth. "And we believe Stanford's tradition of innovation coupled with a forward-thinking global bias as well as its multidisciplinary resources will make a real impact." The Kings have made a $100 million gift to fund the institute. They have committed an additional $50 million in matching funds to inspire other donors to fuel Stanford University's commitment to alleviating poverty, bringing the total philanthropic investment to potentially $200 million.
Three areas of focus
The work of the Stanford Institute for Innovation in Developing Economies (SIIDE, pronounced and known informally as "SEED") will span three pursuits: research, education and applied on-the-ground work to support entrepreneurs and help growing enterprises to scale. It will:
- Conduct multidisciplinary research in close cooperation with in-the-field managers that is focused on new and effective ways to both increase the impact of managed organizations and develop solutions to improve governance, education and infrastructure.
- Educate Stanford students from around the world as well as entrepreneurs, social entrepreneurs, managers and leaders in developing economies to enable them to relieve poverty through effective leadership and problem-solving.
- Build capacity on the ground to support action by entrepreneurs, managers and leaders to scale their organizations and spur innovation.
SEED will be a well-integrated series of activities, with each area of focus continuously reinforcing the others. Data collected on the ground, for example, will be used to fuel research that will shape new courses and drive new solutions to problems as diverse as transportation and supply chain logistics, health care needs or mobile communications. Students, faculty and alumni will work in the field to support local organizations solving real-world problems standing in the way of growth.
The school envisions that in addition to research, students will participate in a course at Stanford before undertaking a work experience in the field. The school already has pioneered this format, in collaboration with Stanford's Hasso Plattner Institute of Design, with Entrepreneurial Design for Extreme Affordability. In collaboration with in-country organizations, such as International Development Enterprises and Proximity Designs, Stanford students have identified opportunities that sparked ventures such as d.light, a consumer products company serving people without access to reliable electricity; Embrace, a social entrepreneurship venture that brings low-cost infant warmers to premature and low-birth-weight babies in the developing world; and Driptech, a water technologies company that produces affordable, high-quality irrigation systems designed for small-plot farmers. A face-to-face and online curriculum also will be developed for in-country entrepreneurs, leaders and managers to help scale and boost the performance of nascent or ongoing ventures.
To amplify its impact on the more than 1 billion people in the world who live on less than $1.25 a day, SEED will partner with organizations such as Endeavor, which mentors and accelerates the work of high-impact entrepreneurs; Omidyar Network, a philanthropic investment firm that helps scale innovative organizations that catalyze economic, social and political change; Skoll Foundation, which drives change by investing in social entrepreneurs; and global social enterprise investor Acumen Fund. All have established operations abroad.
"Today's students aspire to achieve a global impact that will change people's lives for the better with everything from businesses that create employment and income sources to creating access to better education, health care and governance," said Garth Saloner, the Philip H. Knight Professor and Dean of the Stanford Graduate School of Business. "This initiative is an enormous opportunity for Stanford students, faculty and on-the-ground entrepreneurs to collaborate on the design and incubation of new enterprises and solutions." Examples of such organizations include everything from microfinance lender Equity Bank in Kenya to MercadoLibre, Latin America's leading e-commerce business, which launched with support from Endeavor and now employs some 1,500 people, to Embrace and d.light. SEED will cover a broad spectrum of organizations with emphasis on enterprises that employ people in impoverished communities or deliver products and services to those living in poverty.
Why Stanford and the Graduate School of Business?
Stanford University has innovation in its DNA. By providing students with education, skills and problem-solving tools, Stanford has played a pivotal role in the creation and growth of Silicon Valley. Alumni have founded or helped build whole new technologies, industries and companies including Google, Nike, HP, Yahoo, Charles Schwab and Cisco. With Stanford's rich history, track record and relationships as a backdrop, the institute will strive to enable entrepreneurs and others in developing economies to create and scale their organizations. The objective is to help entrepreneurs change the lives of their employees, people within their communities and those who purchase or use their products and services. "There are very few settled solutions about how best to alleviate poverty in a wide range of contexts, which means there is plenty of opportunity to uncover, share and apply new insights," said Saloner.
The institute will draw from the business school's world-class MBA program and suite of courses in entrepreneurship, as well as research on supply chains, finance, funding and other topics relevant to the needs of growing economies. In addition to its Center for Entrepreneurial Studies, Center for Global Business and the Economy, and Center for Social Innovation, the school recently launched an evening Program in Innovation and Entrepreneurship. It also has welcomed the Stanford Program on Regions of Innovation and Entrepreneurship, which conducts research and holds conferences for entrepreneurs, investors and government leaders about the elements that contribute to regions of rapid growth around the world. Going forward the institute expects to embrace resources, students and faculty from across Stanford's six other world-class schools at which approximately one in six MBA students already is working on a joint or dual degree.
Hau Lee, a supply chain expert and the Thoma Professor of Operations, Information and Technology at the Graduate School of Business, will lead the institute. A winner of the MBA Distinguished Teaching Award, he recently collaborated with Riders for Health to measure and demonstrate the impact of their work transforming Gambian and Zambian health care delivery systems through the comprehensive management of national/regional fleets of vehicles. Lee also will head the institute's research area.
Jesper Sørensen, the Robert A. and Elizabeth R. Jeffe Professor of Organizational Behavior and the Susan Ford Dorsey Faculty Fellow, will lead the education and dissemination area. Sørensen is a faculty director of the Center for Social Innovation at the Graduate School of Business and teaches Poverty, Entrepreneurship and Development, among other courses.
Jim Patell, the Herbert Hoover Professor of Public and Private Management and the Katherine and David DeWilde Faculty Fellow, with Bill Meehan, the Raccoon Partners Lecturer in Strategic Management and director emeritus of McKinsey & Co., will lead the on-the-ground area. Meehan will focus primarily on supporting existing business leaders to scale and grow their enterprises through a combination of executive education, consulting, mentoring and online courses. Building on his years of teaching Entrepreneurial Design for Extreme Affordability, Patell, a winner of the MBA Distinguished Teaching Award, will manage programs aimed at partnering Stanford students with in-country organizations to develop new products and services. Following a period of coursework and preparation at Stanford, students will provide manpower and management support by working with startups, nongovernmental organizations and companies in-country. Students will investigate needs and execute solutions with partner entities on the ground.
Nobel laureate A. Michael Spence will chair the institute's advisory board, which is now forming. Spence, who is the Philip H. Knight Professor and Dean Emeritus at the Stanford Graduate School of Business, is an authority on global economics in the developing world and is also the William Berkley Professor in Economics and Business at New York University.
The institute's first research forum will be held March 5-6, 2012, at the Stanford Graduate School of Business. It will bring together faculty by invitation from across Stanford University and elsewhere to share and jointly explore research opportunities in developing economies.
For non-press inquiries regarding the Stanford Institute for Innovation in Developing Economies, contact Debbie McCoy at (650) 725-2994 or firstname.lastname@example.org.