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Going Global, Gradually

11.24.15

Krishna G. Palepu, senior adviser to the president for global strategy

Krishna G. Palepu, senior adviser to the president for global strategy
Photograph ©Stuart Cahill for Harvard Business School


Krishna G. Palepu, senior adviser to the president for global strategy
Photograph ©Stuart Cahill for Harvard Business School

The mid October announcement of Harvard Global Institute (HGI) and a “University-wide effort…to create a globalization strategy” elicited both a sense of promise and some puzzlement, perhaps in equal measure. The University news release observed that advisory groups had “recommended against establishing a large physical presence—such as an overseas campus,” but that “certain University activities will require a greater level of engagement with both distant regions and with academics expert in local aspects of problems and cultures.” To that end, in support of research, HGI will

provide larger grants to projects involving teams of established faculty members, as well as smaller grants to faculty members exploring more experimental topics. HGI’s grants are intended to foster research into topics that transcend disciplinary and regional boundaries, such as climate change, urbanization, education, water, and migration.

If funds become available, research proposals will be solicited from faculty members and vetted by a small group; President Drew Faust will then make the final awards (see discussion below).

HGI moved from theory to practice with the receipt of a gift from Wang Jianlin, chairman of Wanda Group, the Beijing-based company that describes itself as the world’s largest commercial real-estate enterprise (among other lines of business). (See the company account and transcript of his recent appearance at Harvard Business School here.) Accompanying the news about HGI’s formation was an announcement of its first grants. The Wang funds (to be spent within the People’s Republic of China and administered by the Harvard Center Shanghai), as reported, will initially support continuation and enlargement of research on climate change, energy, sustainable development, and associated policies in China. That work has long been pursued by Butler professor of environmental studies Michael B. McElroy; Morris University Professor Dale W. Jorgenson; and Chris Nielsen, executive director of, and many of his colleagues at, the Harvard China Project, with dozens of collaborators at Tsinghua University and elsewhere in China. A separate, smaller grant will explore from a humanities perspective how communities in China—and populations worldwide affected by China’s ecological footprint—have grappled with pollution-related diseases.

Larger questions naturally arose in the wake of these announcements: How does the institute operate generally, and how might this model apply to other Harvard research ventures around the world?

How the Global Institute Is Geared

HGI in fact is designed to thread several needles. The best guide to the University’s decisions is Walker professor of business administration Krishna G. Palepu, whom Faust appointed senior adviser to the president for global strategy in early 2012.

During a recent conversation in his office at Morgan Hall, Palepu recalled a committee that preceded his appointment, chaired by Nitin Nohria, dean of Harvard Business School (HBS). It examined Harvard’s global engagements, broadly defined: the schools’ international centers and offices, the scope of professors’ work, and the opportunities to build on those activities. Involving HBS’s leadership in the work made eminent sense: the school has an especially wide global footprint, with research and case-writing offices in Hong Kong, Shanghai, Tokyo, Mumbai, Paris, Istanbul, Buenos Aires, and São Paulo—plus smaller outposts in Singapore, Dubai, and Mexico City. (The Shanghai center also includes a full-size, theater-style classroom for HBS executive-education and other teaching, and the Mumbai center has access to such a facility nearby.) At the time of his appointment as senior adviser, Palepu was also the school’s senior associate dean for international development.

In his telling, Faust and the Harvard Corporation, aware that Yale (in Singapore) and Duke (outside Shanghai) were establishing joint-venture campuses, and that New York University appeared to be cloning itself around the world, both asked, “Are we missing something?” They charged the committee with thinking deeply about what Harvard ought to do.

After consulting with administrative leaders throughout the University and scholars active globally, Palepu said, the committee reached two conclusions. First, Harvard ought not to invest in an overseas teaching campus, given the emerging options for online outreach and the limitations of being anchored in only one place. Second, Harvard ought to focus on intellectual impact: research. The basic notion, he said, is pursuing the question, “How can we bring the entire power of the One Harvard community together and link it with intellectual capacity in the regions, with scholars in various parts of the world” to address complex problems of global import? (He noted that President Faust in 2012 laid out as a principle for Harvard's strategy, “We seek the largest intellectual footprint with the smallest physical footprint.”)

That confronted the committee with Harvard logistics. In this very decentralized institution, most potentially promising research is organized by school, individual research program, or region; cross-disciplinary work arises only by chance. For the most complex problems that might be most susceptible to the full range of Harvard’s legal, policy, public-health, social-science, engineering, and other intellectual capital, he said, there was no systematic “linking capacity,” even though some of the regional and area-studies centers do support some broader research programs. The global institute was therefore conceived as that glue, focused on facilitating and enabling such research possibilities (with teaching and other programs to follow if warranted).

What, then, is HGI, and what is its modus operandi? As Palepu described it, HGI is a Cambridge-based, virtual organization. Its role is to mobilize financial resources centrally, and then provide them to faculty leaders and groups of faculty colleagues who work on globally important problems across school boundaries. That work is to be supported through the infrastructure of Harvard’s existing regional offices and centers around the globe, like HBS’s research outposts, the [Corrected November 27, 5:15 p.m.; previously described, in error, as a Faculty of Arts and Sciences center] interfaculty David Rockefeller Center for Latin American Studies, a forthcoming Center for African Studies facility in Cape Town, South Africa [Corrected November 24, 1:45 p.m. Erroneously reported earlier as Johannesburg], and so on. Those offices—already funded by endowments or as part of their schools’ core operations—will accommodate visiting faculty researchers and graduate students, convene conferences with colleagues in the host nations, disseminate findings, and so on. The institute, as a conduit for funding, thus aims to support and scale up existing work and enable new research, without adding a new central program or entity. HGI, he said, is “bringing the whole community together.”

Wang Jianlin’s gift, Palepu continued, is the first proof of concept, “jump-starting it with one anchor gift.” The funds are “basically meant to do research on China,” but on problems salient around the world. The McElroy-Jorgenson program on climate change certainly satisfies both, and the grant ($1.25 million annually for the first three years, with two renewal years possible) very much grounds work on a global issue in an important country’s local context. Given their long history of working in this field in the People’s Republic, Palepu said, the research was “shovel-ready” for an infusion of funds under HGI’s auspices. (For more on their work, see McElroy’s “A Warming World,” from this magazine’s November-December 1997 issue; a report on the China Project’s inception; “Connecting with China,” from a 2008 research conference in Beijing; “Greening China,” by Jorgenson and colleague Mun S. Ho; and the recent feature on Jorgenson’s comprehensive work on taxing carbon and applications in the United States, China, and around the world.)

As HGI sponsorship of work in China proceeds, Palepu envisions a formal request-for-proposal process this coming spring or fall, emphasizing multidisciplinary content, faculty teams, scaling up existing projects, and salience to the People’s Republic with wider resonances. Meanwhile, HGI is at pains not to underwrite a unidirectional transmission of knowledge from Harvard to the world, Palepu said. Whatever scholars discover ought to enrich and contribute to the academic enterprise in Cambridge and Boston (much as the hundreds of cases written in centers around the world have flowed into HBS’s classrooms). 

As noted above, the general mechanism for allocating grants involves soliciting faculty research proposals, a process organized by a small group of senior, University-level officials (currently Palepu; vice provost for international affairs Mark C. Elliott, who is Schwartz professor of Chinese and Inner Asian history; vice provost for research Richard McCullough; and vice president for strategy and programs Leah Rosovsky). They consult with subject-matter experts, and make recommendations to President Faust, who makes the final decisions. This is, Palepu said, a “presidentially directed initiative.” Five to 10 years hence, he hopes to have the resources to support similar research around the world. That will happen if people who care about intractable problems in India, Latin America, Africa, and Europe—or who appreciate the potential of applying diverse Harvard research expertise in the global context—come forward with philanthropic support.

In Prospect

HGI is very much “learning how to do this” work, Palepu said, given that the China projects are the first it has been able to support. Beyond the potential to work on climate change and other issues identified in the news announcement, he can envision global research teams addressing the sources of and solutions to challenges such as inequality.

But advancing along the trajectory its University founders anticipate is not a given. HGI-backed programs are explicitly donor-funded, not an investment of unrestricted Harvard funds (like those used to start the edX online-learning venture with MIT). And as outlined so far, the programs depend on a very special species of donor: one who has an interest in her or his country, in global challenges, and in Harvard’s potential to solve them—but who is willing to entrust the funds in a relatively unrestricted way for the president and her advisers to allocate to specific research projects. Thus the search is on, presumably, for globally active business and philanthropic leaders with strong Harvard ties: one thinks of Ratan Tata, AMP ’75, of India’s Tata Group, who underwrote an HBS executive-education building, and Jorge Paulo Lemann ’61, the Brazilian investment banker who has underwritten the São Paulo office and Brazil studies, among other benefactions. (Presumably, some of those prospects are members of Harvard’s Global Advisory Council, which was organized to support global activities across the University, including HGI. It is chaired by David Rubenstein of the Carlyle Group, a co-chair of The Harvard Campaign and chair of the Kennedy School’s fund drive. Wang Jianlin, the council's vice chair, met in China with both Palepu and Faust before the announcement of his HGI-launching gift.)

Wang Jianlin’s engagement is emblematic of such philanthropy in the current decade. During the Campaign, the University has been the happy recipient of four large gifts anchored in the new fortunes created by Chinese property developers: the Evergrande Group gift that has endowed the Center for Green Buildings and Cities at the Graduate School of Design, and other programs (and thought to be in excess of $100 million over several years); a surprise $15-million scholarship fund for Chinese students studying at Harvard, from SOHO China Foundation; the $350-million naming gift for the public-health school, originating from the family of the late T.H. Chan, which established its fortune in the Hang Lung Group Limited, in Hong Kong (these two gifts are described here); and now, the HGI founding gift (thought to be larger than the SOHO fund), proceeding from the success of Wanda Group. In these cases, the confluence of new, enormous, property wealth and especially favorable relationships among the University, China’s leadership, and scholars with deep ties in the People’s Republic, have happily converged to underpin an experiment in international outreach. Except for the Evergrande funds, the gifts are relatively unconstrained, giving the University valuable flexibility to apply the proceeds to presidential or school priorities.

For Harvard scholars, the timing could not be better. Research funding is increasingly scarce. HGI dollars will not, by themselves, rescue the humanities or bail out basic medical research, but the infusion of funds across many applied disciplines and professions is welcome. Local vetting of grant proposals may be less cumbersome and fraught than the external and peer reviews that accompany, say, federal sponsored-research applications. And the mechanism of presidentially directed grants or centrally administered University research funds has become increasingly common in recent years, from Harvard Initiative for Learning and Teaching competitions, to entrepreneurship challenges at the iLab, to the president’s Climate Change Solutions Fund. In an era where permanent, or at least long-term, research funding is insecure, anything helps. The faculty will be rooting for development officers to find broad-minded, global benefactors, and for HGI to progress from experiment to a set of Crimson paths and footprints around the planet—the scope and shape of which depend, of course, on the resources that may be forthcoming.


 

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