Moving to the Japan Society in NY

Dear Friends,

As some of you know, I am leaving Carnegie Council next week to take a senior program position at the Japan Society in New York.

It was a tough decision to leave Carnegie—especially after nearly 5 years of exciting programming and research projects with a fantastic team. Ultimately my decision was formed by a personal desire to help Japan revive.

Over the course of a decade of writing seriously about Asia, my analysis has zeroed in on two empirical sources: data and interviews (rather than theory or conjecture). In my writing on Japan, I have tried my best to convey accurately what Japanese people tell me about their country. As a result, perhaps ironically, the tone of my articles and speeches has become increasingly pessimistic. I recently had dinner with the chief economist of a major bank in Tokyo who asked me, "Devin, what will it take for you to stop being so gloomy about Japan?" My answer was: "I will stop being gloomy when Japanese people stop being gloomy about Japan." It's time to cheer up.

There is an expression in the nonprofit sector: It takes as much effort to find support for a small project as it does for a big one. We might as well aim for the sky. I hope that in a small way at my new post I can help provide a platform for innovation and ideas for positive change in Japan and the US-Japan relationship.

As always, I will look forward to your insights, guidance, and collaboration.

Yoroshiku!

Devin

Photo by William Cho.

Digital Social Responsibility Panel at Japan Society

It has been an eventful week. On Wednesday, I participated in the Japan Society's panel on Digital Social Responsibility: Search for a Sound, Responsible Information Society with Charla Griffy-Brown of Pepperdine, Jun Kurihara of Harvard, and Harriet Pearson of IBM. This conference could not have been better timed: It took place hours after Google, Yahoo, and Microsoft agreed to new guidelines that would aim to protect human rights, privacy, and free expression. From the Scientific American:

The three software giants today (Oct. 29) announced creation of the Global Network Initiative designed to persuade oppressive governments to allow their citizens to freely express opinions, via the Web in particular, without fear of
retribution.

Participating companies must agree to "respect and protect the freedom of expression rights of their users when confronted with government demands, laws and regulations to suppress freedom of expression, remove content or otherwise limit access to information and ideas in a manner inconsistent with internationally recognized laws and standards," says the new group's guidelines.

The guidelines were a response to criticism from NGOs about Internet companies cooperating with the Chinese Government. From InformationWeek:

Yahoo helped launch the initiative after becoming one of several technology companies criticized for how they deal with restrictions on speech in foreign countries. Yahoo was accused of giving the Chinese government information about users that led to the jailing of dissidents. Google has been criticized for filtering search results to comply with demands from the Chinese government. MSN and Yahoo also filter search results to comply with Chinese government
restrictions...

GNI members said they commit to protect freedom of expression and privacy, partner with others for collective governance and accountability, and spread their objectives around the globe. They agreed to require governments to put information requests in writing and to interpret those requests as narrowly as possible.

As expected, there is already some skepticism about the initiative. From SA again:

Don't expect any radical chances results any time soon: companies joining the
initiative (at a cost of $100,000) have two years from the time they sign on to prove they're following the guidelines. It is unclear, however, the consequences a company faces if they join the initiative but fail to meet these guidelines.

Several themes emerged from the Japan Society panel. The overall theme is that companies and Internet users must build a foundation of trust in order to fully exploit the benefits of Web 2.0. That means stewardship of the Internet and of information will become a big focus--information stewardship happens to be something that IBM has been thinking about since the late 1960s. Some other big themes from the panel:

1. A "ubiquitous network society" or "collective intelligence" is emerging from the Internet and Web 2.0, allowing for better and quicker response to crises and problems. The use of crowd sourcing is one such example. With so much information out there, will the global economy begin to put a higher premium on other skills, such as empathy? (BusinessWeek has made this argument, too.)

2. The Web is allowing companies and operations to move from an international model to a multinational model to a truly global model in which data are processed in multiple places, through cloud computing, for example. As John Ruggie mentioned at the Carnegie Council this week, the speed and scope of business has surpassed traditional governing organizations like states. How do we keep up

3. Web 2.0 can help mitigate risk (as well as create new risks) in many areas, including supply chain, brand, and public relations. Lines between competition and cooperation are blurred as are those between friends and enemies. How do we better facilitate these interactions, for example to boost the "integrity of the crowds," as I would put it. This point was brought up by Andrew Zolli at our Web 2.0 panel at the Carnegie Council.

4. Finally, ethical leadership or "courageous leadership," as Kurihara put it, will be needed to resolve the paradoxes and ethical dilemmas posed by Web 2.0. Zolli made a similar point at our panel by saying that ethical leadership is the fastest mover affecting brand value. The others are about stewardship--social and environmental.

(Photo collage from Japan Society of Kurihara, Griffy-Brown, Pearson, and me.)

Democratic Wealth Funds?

This morning, I visited the Japan Society in NYC to listen to a talk on sovereign wealth funds with John Green of the Eurasia Group, Edwin Truman of IIE, Ann Wyman of Citigroup, and Japanese politician Kotaro Tamura (pictured left). A lot of interesting ethical issues surround sovereign wealth funds.

Some of the common questions people often ask include: how transparent are the investments made by the funds? Will the investments be made for the purpose of wealth generation or for political purposes? Is investment in strategic industries fair? If governments are undemocratic but have funds, are they investing on behalf of the people, and are those investments being made at the expense of projects that should take place in the home country? This point relates to some very interesting points that Tamura made.

Tamura is a member of the Japanese House of Councilors and of the ruling Liberal Democratic Party (LDP). He is also leading a group that is seeking to establish a sovereign wealth fund for Japan. When people think about governments investing in assets and potentially making decisions on boards, a gut reaction that it is not fair for governments to have this kind of power when they did not have a role in the entrepreneurial generation of wealth. Governments can print money, collect foreign reserves, tax its people, conduct currency interventions, and other activities. I might not think of these things as giving governments the authority to have stakes in a company. But Tamura put it a different way:

If a government is democratically elected and represents its people, it can act on behalf of its people, as Tamura put it. In Japan, an economy with some socialist characteristics (as Tamura admitted), the government could bring about positive corporate change through the investments it makes--at least in theory. Sure, Japanese society often thinks of government to provide the solution to problems and needs. But Tamura's remarks made me think about the relationship between companies and their stakeholders.

If stakeholders are broadly defined as the society in which a company operates, then in a way, the government might indeed have a role to play in pushing for positive change in corporations. It is sometimes said that if everyone owned a little part of the whole economy, then there would be more incentives for shareholders to push companies to act on behalf of society at large. Well, what if a representative government owned part of many companies? Is there a case for democratic wealth funds?

Craig Newmark on Digital Social Responsiblity

Craigslist Founder Craig Newmark (his blog cnewmark is here) just finished speaking on "Digital Social Responsibility: Searching for Ethics on the Internet" this afternoon at the Japan Society in New York City. Dan Rosenblum and his team at the Japan Society put together this event as part of their corporate program's Tech Epoch series. New York Times correspondent Brad Stone was moderating. Policy Innovations got to listen to Newmark's insightful comments.

Newmark's main theme was that his business has worked on the basis of shared values, specifically trust, in the U.S. society. The biggest problem at craigslist? "Misinformation gangs" spreading lies about political candidates. The reason this problem is more serious than spamming, housing scams, etc. is because billions of dollars are at stake.

I paraphrase some more of Newmark's highlights here:

• Craigslist works based on trust and universal values in the U.S.--these are based on Judaism, Christianity, and Islam (Abrahamic religions). It works on the premise that most people treat people the way they would like to be treated. There are few bad guys but they are noisier than their numbers would suggest.
• The company's moral imperative is to work with the victims of scams and the police to catch the bad guys. But you have to balance this effort with the privacy rights of bad guys. Sometimes we have to operate on an internal moral compass or what "feels right."
• Jon Stewart and Stephen Colbert are pioneers in speaking truth to power, helping the health of our democracy. Another pioneer is blogger and writer Dan Gillmore. While craigslist is for the now, wikipedia is for the ages--it allows history to be written by all people, not just the victors of history.
• The Internet started with Johannes Gutenberg and the "blogger" Martin Luther came up with the first killer app. known as the Reformation.
• While Tim O'Reilly advocates an ethical code of conduct for bloggers, Craig agrees that bloggers should at least disclose their affiliations. (Devin says: I agree with the code that anonymous postings should be avoided. As O'Reilly puts it, "When people are anonymous, they will often let themselves say or do things that they would never do when they are identified.")
• The Web can help remind us where society is supposed to be going and it can help to expose crimes like corruption. (The Internet can help create a more ethical society.)
• Not sure what web 3.0 means but it has something to do with collaborative filtering and trustworthiness metrics. Finally, he joked despite its emergence, Craig is disappointed we still don't fly around with jet packs.