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Simplifying the Bull: How Picasso Helps to Teach Apple’s Style

By Brian X. Chen

• Aug. 10, 2014

CUPERTINO, Calif. — Apple may well be the only tech company on the planet that would dare compare itself to Picasso.

In a class at the company’s internal training program, the so-called Apple University, the instructor likened the 11 lithographs that make up Picasso’s “The Bull” to the way Apple builds its smartphones and other devices. The idea: Apple designers strive for simplicity just as Picasso eliminated details to create a great work of art.

Steven P. Jobs established Apple University as a way to inculcate employees into Apple’s business culture and educate them about its history, particularly as the company grew and the tech business changed. Courses are not required, only recommended, but getting new employees to enroll is rarely a problem.

Although many companies have such internal programs, sometimes referred to as indoctrination, Apple’s version is a topic of speculation and fascination in the tech world.

It is highly secretive and rarely written about, referred to briefly in the biography of Mr. Jobs by Walter Isaacson. Apple employees are discouraged from talking about the company in general, and the classes are no exception. No pictures of the classrooms have surfaced publicly. And a spokeswoman for Apple declined to make instructors available for interviews for this article.

But three employees who have taken classes agreed to speak to The New York Times on the condition that they not be identified. They described a program that is an especially vivid reflection of Apple and the image it presents to the world. Like an Apple product, it is meticulously planned, with polished presentations and a gleaming veneer that masks a great deal of effort.

“Even the toilet paper in the bathrooms is really nice,” one of the employees said.

Unlike many corporations, Apple runs its training in-house, year round. The full-time faculty — including instructors, writers and editors — create and teach the courses. Some faculty members come from universities like Yale; Harvard; the University of California, Berkeley; Stanford; and M.I.T., and some continue to hold positions at their schools while working for Apple.

The program was devised by Joel Podolny, then the dean of Yale School of Management. Mr. Jobs selected him when the program was founded, in 2008, and he remains head of the effort.

On an internal website available only to Apple staff members, employees sign up for courses tailored to their positions and backgrounds. For example, one class taught founders of recently acquired companies how to smoothly blend resources and talents into Apple. The company may also offer a course tailored specifically to employees of Beats, perhaps including its founders, Dr. Dre and Jimmy Iovine. Neither Apple nor Beats would comment.

Some of the courses teach case studies about important business decisions that Apple made, one of the employees said, including the one to make the iPod and its iTunes software compatible with Microsoft’s Windows system. This was a topic of fierce debate among executives. Mr. Jobs hated the idea of sharing the iPod with Windows, but he eventually acquiesced to his lieutenants. It turned out that opening the iPod to Windows users led to explosive growth of the music player and the iTunes Store, an ecosystem that would later contribute to the success of the iPhone.

The classes are taught on Apple’s campus in a section of buildings called City Center and are as thoughtfully planned as an Apple product, the employees said. The rooms are well lit and built in a trapezoid shape; seats in the back rows are elevated so that everyone has a clear view of the instructor. Occasionally, classes are given in Apple’s overseas offices, like one in China, and the professors travel there to teach.

Randy Nelson, who came from the animation studio Pixar, co-founded by Mr. Jobs, is one of the teachers of “Communicating at Apple.” This course, open to various levels of employees, focuses on clear communication, not just for making products intuitive, but also for sharing ideas with peers and marketing products.

In a version of the class taught last year, Mr. Nelson showed a slide of “The Bull,” a series of 11 lithographs of a bull that Picasso created over about a month, starting in late 1945. In the early stages, the bull has a snout, shoulder shanks and hooves, but over the iterations, those details vanish. The last image is a curvy stick figure that is still unmistakably a bull.

“You go through more iterations until you can simply deliver your message in a very concise way, and that is true to the Apple brand and everything we do,” recalled one person who took the course.

In “What Makes Apple, Apple,” another course that Mr. Nelson occasionally teaches, he showed a slide of the remote control for the Google TV, said an employee who took the class last year. The remote has 78 buttons. Then, the employee said, Mr. Nelson displayed a photo of the Apple TV remote, a thin piece of metal with just three buttons.

How did Apple’s designers decide on three buttons? They started out with an idea, Mr. Nelson explained, and debated until they had just what was needed — a button to play and pause a video, a button to select something to watch, and another to go to the main menu.

The Google TV remote serves as a counterexample; it had so many buttons, Mr. Nelson said, because the individual engineers and designers who worked on the project all got what they wanted. But, Apple’s designers concluded, only three were needed.

“The Best Things,” another course, takes its name from a quotation by Mr. Jobs . Its purpose is to remind employees to surround themselves with the best things, like talented peers and high-quality materials, so that they can do their best work.

One of the teachers for this course, Joshua Cohen, a Stanford professor, brought up Central Park in New York. The space for the park was originally a rocky swamp. But, Mr. Cohen said, its designers wanted to transform it into an area that gave urban residents the experience of nature.

The comparison was to one of Mr. Jobs’s goals: to make complex computer technologies feel understandable and natural.

Ben Bajarin, a consumer technology analyst for Creative Strategies, said Apple University would take on more importance as Apple continued to grow.

“When you do the case studies on Apple decades from now, the one thing that will keep coming out is this unique culture where people there believe they’re making the best products that change people’s lives,” Mr. Bajarin said. “That’s all cultural stuff they’re trying to ingrain. That becomes very difficult the bigger you get.”

An article on Monday about Apple University, which teaches employees the company’s style and culture, misstated the title of Joel Podolny, who serves as dean of the in-house university. He is a vice president at Apple, but he is no longer vice president for human resources, nor is he in “in charge” of human resources. (A video frame shot that accompanied the article, with a text overlay that identified Mr. Podolny as vice president for human resources, was from 2012.)

An earlier version of a video caption with this article misquoted Mr. Jobs. He talked about being exposed to the “best things that humans have done,” not the “best things that humans have made.”

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Apple Inc. in 2020

By: David B. Yoffie, Daniel Fisher

After a decade as CEO, Tim Cook is facing one of his biggest strategic transitions of his tenure. While Apple had performed spectacularly well under Cook, Apple's core business was maturing. Sales of…

• Length: 31 page(s)
• Publication Date: Apr 6, 2020
• Discipline: Strategy
• Product #: 720454-PDF-ENG

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After a decade as CEO, Tim Cook is facing one of his biggest strategic transitions of his tenure. While Apple had performed spectacularly well under Cook, Apple's core business was maturing. Sales of iPhones, iPads, and Macs were flat or down. However, Apple's new hardware-Apple Watch and Airpods-as well as services were growing rapidly. This case explores Apple's history and Cook's strategic options for driving new hardware and services into Apple's mainstream in the next decade.

Learning Objectives

This case can be used for several purposes, including industry analysis, introduction of complementary assets, sustaining competitive advantage and expanding corporate scope.

Apr 6, 2020

Discipline:

Harvard Business School

720454-PDF-ENG

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The FBI & Apple Security vs. Privacy

How can tech companies and government organizations strike a balance between maintaining national security and protecting user privacy?

In December 2015, the FBI attained the iPhone of one of the shooters in an ISIS-inspired terrorist attack that killed 14 people in San Bernardino, California. As part of the investigation, the FBI attempted to gain access to the data stored on the phone but was unable to penetrate its encryption software. Lawyers for the Obama administration approached Apple for assistance with unlocking the device, but negotiations soon broke down. The Justice Department then obtained a court order compelling Apple to help the FBI unlock the phone. Apple CEO, Timothy Cook, publicly challenged the court in an open letter, sparking an intense debate over the balance between maintaining national security and protecting user privacy.

Apple and its supporters, including top technology companies such as Google and Facebook, made the case on several fronts that the court order threatened the privacy of all individuals. First, according to Apple, the order effectively required the company to write code, violating its First Amendment right to free speech by forcing the company to “say” something it did not want to say. Previous court cases had already established computer code as legally protected speech. Second, such a backdoor, once created, could fall into the wrong hands and threaten the privacy of all iPhone owners. Finally, it would set a dangerous precedent; law enforcement could repeatedly require businesses such as Apple to assist in criminal investigations, effectively making technology companies an agent of government.

Representatives from both sides of the political aisle offered several arguments in favor of the Justice Department’s efforts and against Apple’s stance. Their central claim was that the U.S. legal system establishes constraints on the government’s access to private information which prevent abuse of search and surveillance powers. At the same time, the law still allows authorities to gain access to information that facilitates prevention and prosecution of criminal activities, from terrorism to drug trafficking to child pornography. Critics of Apple also rejected the slippery slope argument on the grounds that, if Apple cooperated, it could safeguard the code it created and keep it out of the hands of others, including bad actors such as terrorists or criminal groups. Moreover, Apple was accused of being too interested in protecting its brand, and even unpatriotic for refusing to comply with the court order.

Ultimately, the FBI dropped the case because it was able to circumvent the encryption on the iPhone without Apple’s help.

Discussion Questions

1. What harms are potentially produced by the FBI’s demand that Apple help it open an iPhone? What harms are potentially produced by Apple’s refusal to help the FBI?

2. Do you think Apple had a moral obligation to help the FBI open the iPhone in this case because it involved terrorism and a mass shooting? What if the case involved a different type of criminal activity instead, such as drug trafficking? Explain your reasoning.

3. Apple argued that helping to open one iPhone would produce code that could be used to make private information on all iPhones vulnerable, not only to the American government but also to other foreign governments and criminal elements. Do you agree with Apple’s “slippery slope” argument? Does avoiding these harms provide adequate justification for Apple’s refusal to open the phone, even if it could reveal crucial information on the terrorist shooting?

4. Politicians from across the political spectrum, including President Obama and Senator Ted Cruz, argued that technology preventing government access to information should not exist. Do you agree with this limit on personal privacy? Why or why not?

5. Ultimately, the FBI gained access to the iPhone in question without the help of Apple. Does this development change your assessment of the ethical dimensions of Apple’s refusal to help the FBI? Why or why not? Should the FBI share information on how it opened the iPhone with Apple so that it can patch the vulnerability? Explain your reasoning.

Related Videos

Incrementalism

Referred to as the slippery slope, incrementalism describes how we unconsciously lower our ethical standards over time through small changes in behavior.

Bibliography

Apple Fights Order to Unlock San Bernardino Gunman’s iPhone http://www.nytimes.com/2016/02/18/technology/apple-timothy-cook-fbi-san-bernardino.html

How they line up on Apple vs. the FBI https://www.washingtonpost.com/graphics/business/fbi-apple/

Why Apple Is Right to Challenge an Order to Help the F.B.I. http://www.nytimes.com/2016/02/19/opinion/why-apple-is-right-to-challenge-an-order-to-help-the-fbi.html

Apple’s Rotten Core: CEO Tim Cook’s Case for Not Aiding the FBI’s Antiterror Effort Looks Worse than Ever http://www.wsj.com/articles/apples-rotten-core-1456696736

Obama, at South by Southwest, Calls for Law Enforcement Access in Encryption Fight http://www.nytimes.com/2016/03/12/us/politics/obama-heads-to-south-by-southwest-festival-to-talk-about-technology.html

U.S. Says It Has Unlocked iPhone Without Apple http://www.nytimes.com/2016/03/29/technology/apple-iphone-fbi-justice-department-case.html

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Succession Case Study: Apple

Home » Blog » Succession Case Study: Apple

SIGMA believes in ongoing learning and development. One of the most efficient ways to do this is to learn from the successes and failures of others. These cases highlight some of industry’s most powerful lessons in organizational management, drawn from the example of those who went before us.

APPLE UNIVERSITY: AN ICONIC SUCCESSION PLAN

A business case for succession planning, and how Steve Jobs launched Apple University to prepare the company to continue changing the world without him.

Download SIGMA’s case on Apple’s succession planning process to learn:

• The importance of planning ahead
• The value of creating and sharing a vision
• The necessity of developing a leadership pipeline

Sneak Peek: What’s Inside?

Steve Jobs has been widely hailed as a genius – and rightfully so. As the founder, and later-CEO of Apple, Jobs revolutionized both the design and function of personal computing devices, combining his expertise in liberal arts and technology to disrupt major industries and create entirely new ones. Jobs was a restless innovator. He led with unprecedented vision, saving Apple from bankruptcy and pushing it to become what is now the company with the highest market valuation of any business worldwide. [i]

The Problem

Few people think of Apple without immediately thinking of Steve Jobs; his fingerprints are all over the products and their design. But in October of 2011, Steve Jobs passed away after 14 years as CEO, and the company had to continue without its iconic founder.

Jobs left the company in the hands of his COO, Tim Cook, who commented on Jobs’ passing, saying, “Apple has lost a visionary and creative genius, and the world has lost an amazing human being… Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.” [ii]

After Jobs’ passing, many wondered whether the company would continue to thrive without its founder. In Apple’s case, the answer was ‘yes.’

What Happened

After Jobs’ passing in October 2011, Apple continued to thrive. It’s brand valuation more than tripled from 2011 to 2014, giving it the highest market value of any company worldwide. Gross revenues also continued to increase dramatically year over year, from $65 billion in 2010, to $108 billion in 2011, $157 billion in 2012, and $171 billion in 2013. In 2014 Brand Finance declared Apple the most valuable billion-dollar brand in the world and Fortune/CNN Money named Apple the world’s most admired company in their top 50 list. All this without Jobs at the helm. 1

The kind of growth Apple experienced following the loss of Jobs is the mark of a robust succession plan. The company not only maintained its position in the industry, it continued on its trajectory of success. Let’s take a look at how they got there.

How They Got There

The key to Apple’s continued success was an iconic succession plan that sustained Jobs’ vision beyond his time as a leader. This succession plan took the form of a close relationship with Tim Cook, Apple’s COO and primary succession candidate, as well as the establishment of a world-class executive education system known as ‘Apple University.’

Steve Jobs became the official CEO of Apple in 2000, at which point he immediately hired Tim Cook as head of operations. [iii] Cook streamlined Apple’s facilities and supply chain, dramatically increasing margins. He formed a strong partnership with Steve Jobs and acted as his right-hand-man for nearly a dozen years. Cook had a test-run as CEO in 2009, and again in 2011 while Jobs was managing his health.1 All of these opportunities were intentionally facilitated to give Cook a wealth of experience and equip him to step into the role of CEO when the time came. 

Perhaps more incredible than the effort Jobs put into preparing Cook was the establishment of Apple University. This institution was the mark of a succession plan that went beyond a single successor. Apple University was intended to retain top talent and help Apple employees think like Steve Jobs. It was created in 2008 under the oversight of Joel Poldony (former Dean of Yale Business School) and inspired by Hewlett Packard’s “The HP Way” (core values which Jobs was exposed to during his time as an intern at HP). After his appointment, Poldony hired other academics including Morten Hansen from UC Berkeley’s School of Information, and Richard Tedlow, Professor of Business Administration at Harvard Business School. Guest speakers at the school have also included Apple executives such as Tim Cook (CEO, 2011-present) and Ron Johnson (VP Retail Operations, 2000-2011). The university uses case studies based on important decisions the company has made over the years, and the curriculum includes courses such as “What Makes Apple Apple.”1

At the core of Apple University is the goal to keep Jobs’ vision for Apple alive, and to train others in how he achieved it. Jobs used the institution to deeply ingrain his tenants of innovation and sustained success throughout the entire company: accountability, attention to detail, perfectionism, simplicity, and secrecy.1 In this way the university served to make Jobs’ management philosophy accessible to everyone, capturing it in a curriculum that continues to teach even though the teacher has gone.

Apple University bears the mark of exemplary coaching and development. Here, Jobs created a system that allows him to personally, albeit indirectly, continue to mentor his leaders and develop Apple’s top talent. The university also ensures that Jobs’ mission and vision are kept at the forefront of Apple’s operations. Of all Apple’s employees, 90% have never met Steve Jobs, but Jobs’ design and “feel” for the brand is shared across the organization. [iv]   Combined with his mentorship of Tim Cook, Apple University makes Steve Jobs’ succession plan unlike any other, because he not only raised up a leader, but an entire institution to continue building the legacy he began at Apple.

Succession Planning at Apple Today

Today, succession planning is still one of Apple’s top priorities. Apple University has grown over the years, and Tim Cook has publicly declared his commitment to ensuring there will be someone equipped to take on his role when the time comes.

“I see my role as CEO to prepare as many people as I can to be CEO,” Cook said in an interview with Buzzfeed. “And that’s what I’m doing. And then the board makes a decision.” Many have speculated that Angela Ahrendts, former CEO of Burberry, now Senior VP of Apple, may be the most promising successor, but so far both Cook and Ahrendts have denied the rumors. [v] What is certain, however, is that Apple remains a prime example of a company that prioritizes succession planning and is reaping the benefits of the internal talent that process fosters.

Key Takeaways

• Plan Ahead – Jobs hired Tim Cook almost immediately after he became CEO. This allowed him to work alongside Cook throughout Apple’s revitalization, ensuring that the company’s ins and outs were not only understood, but in part created by its future leader.
• Share the Vision – After his diagnosis, Jobs immediately began developing Apple University. This is another example of how Apple planned ahead, but it also demonstrates a model for how leaders must share their vision in order for others to one day carry it forward. Sharing the vision is especially difficult for founders because they are intimately involved with the identity of their brand. The thought of handing the reigns to someone else can be difficult to accept, but the reality is that no leader lasts forever. An organization’s mission and vision must therefore be ingrained throughout the entire management team, particularly among prospective leaders.
• Train Your Team – One of the keys to succession planning is developing a leadership pipeline. This pipeline requires organizations to attract and retain top talent, usually by providing professional development and opportunities for advancement. Apple University did a formidable job of developing the company’s leaders, training their team so that they could protect their culture and promote from within.

How SIGMA Can Help

Like Apple, you can get succession planning right. We’re here to help. Over the last 50 years SIGMA has worked with more than 8,500 private and public organizations to develop people potential and increase organisational effectiveness. We provide full-service succession planning, custom consulting, and a range of templates and resources. We also offer a number of succession planning workshops. To learn more about our solutions, click here , or contact us directly for more information.

[i] Best College Reviews. (2020). What is Apple University and Why More Companies Should Follow Suit. Best College Reviews. Retrieved from https://www.bestcollegereviews.org/apple-university/ .

[ii] Financial Post Staff. (October 6, 2011). Full Text: Tim Cook’s letter to Apple employees about Steve Jobs death. Retrieved from https://financialpost.com/technology/full-text-tim-cooks-letter-to-apple-employees-about-steve-jobs-death.

[iii] Ferracone, R. (2011). An Outsider’s View of Apple’s Succession Plan. Forbes. Retrieved from https://www.forbes.com/sites/robinferracone/2011/09/13/an-outsiders-view-of-apples-succession-plan-3/#7b946b92cdba.

[iv] Viticci, F. (May 7, 2011). “Inside Apple” Reveals Steve Jobs Anecdotes, Apple’s Little Known Facts. MacStories. Retrieved from https://www.macstories.net/news/inside-apple-reveals-steve-jobs-anecdotes-apples-little-known-facts/.

[v] Balakrishnan, A. (October 24, 2017). Apple CEO Tim Cook says he plans to groom as many successors as possible. CNBC. Retrieved from https://www.cnbc.com/2017/10/24/apple-ceo-tim-cook-talks-succession-plan.html .

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Case Study: Enhancing portfolio performance with long-term options

Koen Hoorelbeke

Options Strategist

Summary:  This case study explores how using long-term options instead of direct stock purchases can enhance investment efficiency. It features a fictitious investor, Sarah, who utilizes a two-year call option on Apple Inc. to control more shares with less capital. This approach offers reduced capital outlay, enhanced potential returns, and flexibility in managing investments, demonstrating a strategic advantage for traditional investors.

Introduction :

Investing in stocks through traditional buy-and-hold strategies is a proven path to wealth accumulation. However, savvy investors are continually exploring more efficient methods to maximize their returns and manage risks. Long-term options offer a strategic advantage by providing the potential for high returns with less capital compared to direct stock purchases. In this case study, we will explore how long-term options can be utilized to optimize investment returns through the experience of a fictitious investor, Sarah, who is looking to refine her investment strategy.

Important note: the strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.

Background:

Meet Sarah , a seasoned buy-and-hold investor with a diversified portfolio. Her strategy traditionally involves purchasing blue-chip stocks and holding them for long periods, relying on their stable dividends and steady appreciation. However, Sarah is eager to optimize her investment strategy to enhance her returns and manage her capital more efficiently.

Sarah wants to maintain exposure to her favorite stock, Apple Inc., which she believes has strong long-term growth potential. However, she is also keen on preserving capital for other investment opportunities that might arise. Buying additional Apple shares outright would require a significant capital outlay.

Solution: Using long-term options:

Instead of purchasing additional shares of Apple directly, Sarah decides to invest in long-term options. She chooses a call option with a strike price close to the current market price but expiring in two years. This option gives her control over a much larger amount of stock than she could afford to buy outright.

Financial comparison:

• Cost: Apple is trading at $150 per share.
• Sarah considers buying 100 shares, requiring a capital outlay of $15,000.
• Cost: A two-year call option with a $150 strike price costs $3 per share (option premium).
• Sarah buys 10 contracts (each contract representing 100 shares), controlling 1,000 shares.
• Total cost: $3,000 (10 contracts x 100 shares x $3 premium).
• Sarah spends only $3,000 to control 1,000 shares, compared to $15,000 to own 100 shares outright, freeing up $12,000 for other investments.
• If Apple stock rises to $200 over the next two years, the value of her options would significantly increase. Her options could potentially be worth $50 per share (the difference between the market price and the strike price), equating to a total of $50,000 (1,000 shares x $50), minus the initial $3,000 premium paid.
• If Apple's stock price falls, Sarah's maximum risk is the $3,000 premium paid, compared to a potentially larger loss had she purchased the stock outright.
• Sarah retains the flexibility to exercise her options to acquire the shares if beneficial or to sell the options as they appreciate in value. She can also let them expire if the stock underperforms, minimizing her losses.

Conclusion:

By integrating long-term options into her buy-and-hold strategy, Sarah efficiently leverages her capital, enhances her potential returns, and retains flexibility in her investment approach. This case study exemplifies how long-term options can be a powerful tool for traditional investors looking to maximize their financial strategies without compromising their long-term investment goals.

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Helping to solve economic disparity in China through online entrepreneurship

Dr Wei Miao (UCL Faculty of Engineering Sciences) used UCL-Zhejiang University Strategic Partner Funds to understand the impact of regional promotional strategies on large e-commerce platforms.

10 May 2024

The Covid-19 pandemic revealed a range of socio-economic inequalities across the world, when government-imposed restrictions impacted the ability of some individuals to earn money. This was heightened in less economically developed countries. However, there are opportunities for entrepreneurs and small and medium-sized businesses to use e-commerce platforms such as Amazon and eBay to sell goods and earn a living. This is a particularly beneficial option during a mass crisis such as a pandemic because business can continue more or less as usual. However, the visibility of sellers on these platforms can vary, and in some instances, sellers and their products don’t get enough attention to make a living.

In response to this, Dr Wei Miao wanted to explore whether promoting whole regions – and not just individual sellers – on e-commerce platforms could improve the economic prospects for entrepreneurs. Following a successful application to the UCL-Zhejiang University Strategic Partner Funds, he partnered with Professor Liqiang Huang from Zhejiang University in China, to explore the topic in depth.

Wei and Liqiang in front of Qiushi Lecture Hall (the iconic building of ZJU)

Wei and Liqiang in front of Zhejiang University's main gate

Wei and Liqiang in Zhejiang University School of Management

The power of collective promotions online

“Taobao is the largest e-commerce platform in China,” Wei explained. “Our partners at Zhejiang University have contacts there, so through this project, we were able to collect very detailed sales data on a large scale. This covered many provinces and regions in China. Although this project is China-specific, we believe our findings could also be generalised to other developing economies.”

When buyers browse e-commerce platforms such as Taobao, Amazon or eBay, they commonly see endorsements. However, these endorsements are pitched at the level of products from individual sellers – using terminology such as ‘Amazon’s choice’ or ‘eBay bestseller’. Wei and his collaborators wanted to explore the benefits of endorsing whole geographical regions instead – known as a collective promotional strategy. Fortuitously, Taobao implemented a strategy like this in 2014 and is the only known large e-commerce platform that has done so. The platform would calculate the total sales of all sellers in a particular rural town. If the total sales exceeded certain thresholds, an endorsement called ‘Taobao Town’ would be given. As a result, this collective would be promoted to buyers across the whole Taobao platform.

“It means that we, as consumers, will know that a rural town might be under-developed in terms of its economy. But it produces some unique items that customers like,” Wei said. “We thought this type of promotion could be quite effective. We conducted causal inference econometric analyses to compare uncertified towns with certified ‘Taobao Towns’. The certified towns experienced an almost 32% increase in their sales because of this endorsement. That was our first major finding – collective promotion strategies can indeed help rural towns boost their sales.”

The team also found that the collective promotion strategy can help mitigate regional disparities between richer areas and underdeveloped areas. It is the least developed areas that have the most to gain from the ‘Taobao Town’ endorsement. And when a town gets the endorsement, people are more motivated to pursue an e-commerce career. This was particularly the case for female entrepreneurs and younger entrepreneurs, who tend to be underrepresented in entrepreneurship.

In addition, the research dispelled concerns that a ‘Taobao Town’ certification in one town might negatively impact the economy in neighbouring towns, or exacerbate inequalities in a region as a whole. “Our analysis shows that towns neighbouring certified towns also benefit from the endorsement of the focal town,” Wei said. “We believe this is due to the ‘encouraging effect’. People in neighbouring towns see the successes, learn how to do e-commerce well, and then thrive in their own businesses. It's a win-win situation for both the certified towns and the neighbouring towns.”

Improving regional economies in a changing world

Wei and his collaborators want to share the findings from this study to policymakers across the world, particularly in developing economies. “Regional economic disparity issues are common in other countries,” Wei explained. “Rolling out similar collective promotion strategies on other platforms can boost the visibility of remote locations and rural towns. This can help local entrepreneurs to develop their businesses and succeed in this post-Covid world.”

Together with his collaborators at Zhejiang University and Professor Christopher Tang from the University of California Los Angeles (UCLA), Wei has also recently completed a paper about these findings, which will be submitted to leading academic management journals for publication. The team is attending a range of academic conferences to share their findings with other academics. Crucially, Taobao has reacted very positively to the results, and the company is in the process of allocating more resources to work on its collective promotion strategy. Taobao also plans to run more training programmes to the sellers in certified ‘Taobao Towns’ so they can maximise the benefits of this endorsement.

Next, the team plans to analyse the data further to understand pre-Covid and post-Covid experiences. As there have been concerns that some demographic and ethnic groups were impacted differently by Covid-19, this information could help governments plan better for future crisis situations. Protecting the income and earning potential of everyone could be crucial in the future.

“Our successes so far mean we are trying to deepen this collaboration between UCL and Zhejiang University,” Wei said. “We want to involve more academics from each side, plus launch some joint teaching programmes and PhD programmes. I would really encourage other academics at UCL to apply for funding through UCL Global Engagement. Getting this funding is not the end of the story for us, it’s really the starting point.”

• The UCL-Zhejiang University Strategic Partner Funds is one of UCL's Partner Funds . It opens for applications on September 6, 2024.
• A Rising Tide that Lifts All Boats: The Effects of Collective Recognition Programs on E-Commerce Sellers and Regional Economic Development  (working paper)
• Dr Wei Miao's academic profile  
• UCL Faculty of Engineering Sciences
• UCL in East Asia
• UCL and China
• Aerial View of Rural Chinese Town and Farmland
• Credit: iStock

• Harvard Business School →
• Faculty & Research →
• December 2020
• Teaching Note
• HBS Case Collection

Apple Inc. in 2020

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About The Author

David B. Yoffie

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Pathways to Space: A case study of the UAE

Michele scataglini.

Marc Ventresca

Evidence from recent research on the UAE space ecosystem, strategic investments and private sector development.

By Michele Scataglini, Marc Ventresca and Fatema Al Hajri , Many thanks also to our collaborators in this Pathways to Space article: Laura Edwards , Elizabeth Filippouli and Bosco Lai .

Government activity is intensifying globally and in the Middle East.

Today’s renewed interest in the modern state occurs in a time of institutional and social turmoil - making newly visible questions about who builds the future and how. This involves understanding the many ways that states reshape legacy institutions, transform existing institutions and support, fund, and imagine new institutional arrangements. This, in addition to the more regularly recognised work by firms and civil society agencies.

The rise of the space sector is the ultimate frontier for the economic growth and power of nations. In our research on Pathways to Space we outline the scale and diversity of actors, innovations and activities that we are seeing in the global space economy.   This article is one more in a series of research updates on space ecosystems taking shape across the world.

Our research argues, supported by relevant research on ecosystem and on national space strategies, that four key elements are critical in the early days of these initiatives:

• States making markets, including regulation but also through other means
• Resources available, both domestic and global
• Growth of expertise in relevant agencies, firms and communities
• Some linkages with established space-faring nations

Across the Middle East space activity has intensified over the past decade with the emergence of government led space programmes including in the United Arab Emirates (UAE), Saudi Arabia, Oman, Qatar, Bahrain, Turkey and Egypt. Najmonauts is the newest word in the space lexicon alongside astronauts, cosmonauts and taikonauts. It is derived from the Arabic word for star – ‘najm’.  Overall trends intensifying activities in space can be linked to the push towards economic diversification and the creation of new national capabilities, advancing defence priorities, and more traditional measures of soft power. Euroconsult forecasts the value of the middle east space economy will reach $75 billion in 2032 .

Najmonauts photo credit - Lisa La Bonte

Headline findings on the nascent UAE space sector.

For this case study we are focusing on one of those players – the United Arab Emirates  - which has been involved in the space sector from as far back as 1970s, when  President Nixon gifted the UAE a sliver of moon rock  collected during the Apollo 17, and where today there is a new wave of sovereign government agencies involved in building the country’s space market. The key takeaways from our analysis show:

• The UAE’s aspirations for the space sector are visible both in the commercial expansion efforts and in its space exploration missions - current activities that are testament to the country’s long-term ambition in space. 
• The UAE has established the UAE Space Agency with overall responsibility for  policies and strategic goal setting, developing the regulatory framework, and for implementing the agreed measures either directly or via the national operating companies.
• This approach has contributed to rapid development of the space sector, scientific advancements, talent development, and international partnerships.
• We also start to see spillovers into adjacent sectors of the economy with government agencies claiming a stake in space and entrepreneurial activity.

To understand how the UAE is building its space sector, we analysed three dimensions:

• The regulatory and institutional framework (rules of the game)
• The ecosystem actors and the relation between them (relationships)
• The public and private funding overlapping, developing and supporting the first two dimensions (resources)

1) UAE has a robust regulatory and policy framework for space.

The UAE has established a clear framework for activities in space, starting with the establishment in 2014 of the UAE Space Agency as national coordinating body, followed by the approval in 2017 of a National Space Strategy 2030.

The Strategy encompasses six main goals, implemented via 20 programmes and 80 initiatives, many of which are underway. 

Examples of some of the achievements include:

• scientific missions to the Asteroid Belt, Moon and Mars
• significant agreements with leading international space organisations, such as NASA, JAXA, Roscosmos and the Indian Space Research Organization.
• the extensive focus on space at EXPO2020 and at the Museum of the Future
• the space pavilion at Dubai Airshow 2023

And the convening power and leadership displayed by the UAE was visible in the Space Agencies Leaders’ Summit organised at the COP28 UN Climate Conference, where we witnessed participation from more than 20 international space agencies. (Pictured here is Bosco Lai, co-founder of Little Place Labs and Oxford Saïd alumnus, with colleagues at COP28.)

The UAE is also part of, and chairs, the Arab Space Cooperation Group, a regional space-focused entity established in 2019, for coordinating regional space activities, including harmonising regulations among space authorities, adopting a unified position at regional and international forums, and harnessing scientific research  and innovation to develop advanced space capabilities.

2) The UAE space ecosystem is growing in scale and scope

We used an analytical framework from entrepreneurial and innovation ecosystems, adapted to the space sector stakeholders, to take stock of the plurality of actors, relationships and roles emerging in the UAE space ecosystem.

Government agencies and state companies are leading growth.

While the UAE Space Agency  is the federal agency organising, regulating and advancing the UAE space industry, there are other notable agencies and companies.

The Mohammed bin Rashid Space Centre (MBRSC) was established in 2006, with the task of building, developing, and operating a number of Earth observation satellites, providing imaging services, analysing them, and producing relevant scientific data. Over time its scope of activities expanded to include the UAE Astronaut Programme, the Mars 2117 Programme and the Mars Mission Hope Probe which will provide a complete picture of Martian atmosphere.

Space42, is the new entity from the proposed merger of two national space champions -  Yashat and Bayanat. Yashat, incorporated in 2007, offers multi-mission satellite services reaching more than 80% of the world’s population, enabling critical communications including broadband, video broadcasting, mobile voice and data solutions. Bayanat, an AI powered geospatial solutions company developing a constellation of seven earth observation satellites, captures data from Earth and provides services to incumbent industries including logistics, supply chains, mobility and autonomous ride hailing.

Thuraya Telecommunications Company was established in 1997 becoming the mobile satellite services. In 2018, it became a subsidiary of Yahsat. It is UAE’s first home grown satellite operator and offers communications solutions to a variety of sectors including energy, government, broadcast media, maritime, military, aerospace and NGOs.

UAE Space Agency stand at Abu Dhabi sustainability week 2020. Credit UAE Space Agency.

Industry incumbents and national champions are present

Corporates generally provide resources to enable the innovation ecosystem. In the case of the UAE this includes foreign aerospace incumbents working in the UAE defence and aerospace sector (eg Lockheed, Boeing, Airbus, Thales). But there are also national champions such as EDGE, a technology group established to develop solutions for defence. It has been selected by the UAE Space Agency as the prime contractor for the new Sirb programme (Arabic word for a flock of Birds) which seeks to enhance the country’s  capabilities in developing and manufacturing various satellite components, including payloads. The three initial satellites will provide a better understanding and management of the Earth's resources and environment. This initiative signifies the first space capabilities development programme undertaken by a consortium of local industries in the UAE.

Research and technology activity fields are burgeoning

Critical to the space ecosystem is a vibrant R&D sector. Examples include:

• The Propulsion and Space Research Centre (PSRC) and Directed Energy Research Center (DERC) part of the  Technology Innovation Institute (TII) , are premier global research hubs with teams of scientists, researchers, and engineers, focusing on new and ground-breaking directed energy systems and propulsion ideas.
• The Khalifa University Space Technology and Innovation Lab (KUSTIL) builds on the current space-related capabilities developed within Khalifa University to support the space industry.
• The National Space Science and Technology Centre (NSSTC) is developing innovative space activities and research programmes. 
• The Sharjah Academy For Astronomy, Space Sciences and Technology is developing and promoting education about astronomy and space sciences in the UAE and across the Arab world.

And supporting the R&D there is investment in education and talent. In November 2023 the National Space Academy was launched for young Emiratis, and during COP28 educational sessions were held focussing on space and remote sensing for students of different ages.

The venture support for innovation and entrepreneurship

In the UAE there is a substantive number of programmes dedicated to innovation and entrepreneurship, but it is early days for those with a focus on space. There are promising signals coming from mature ventures such as Sadeem (engineering services), 971Space (control and management of spacecraft operations), and Stellaria (geospatial solutions). MBSRC is again a player here providing support for startups both downstream and upstream in the space sector.

The establishment of the Masdar Space Economic Zone comes with the promise of supporting space entrepreneurs in growing their ventures through incubators and accelerator services. It has already announced the establishment of 10+ space ventures and there is a growing professional services industry with space competencies. But the potential is much bigger with organisations like Hub71 and DIFC Innovation Hub which have strong expertise in running startup  support programmes around emerging technologies and new markets.

The 2020 Space Investment Promotion Plan outlines strategies for growing an innovation ecosystem for space ventures, with the ability to attract deal flow at various stages, vetting opportunities, connecting them with private capital as well as providing entrepreneurship support services for early-stage ventures. A key actor in the private capital space is Mubadala Investment Company, which has recently confirmed its commitment to further investments in SpaceTech.

And innovation is not limited to the private sector. The Dubai Electricity and Water Authority (DEWA) is running its own space programme, Space-D, using technologies such as remote sensing to improve the operations, maintenance, and planning of its networks.

3) Playing and investing for the long-term.

‘Pathway to Space’ to date in the UAE is visible in the role the government has played in setting strategic priorities and in nurturing a growing ecosystem of actors across the economic value chain. The country also has the necessary financial resources to support the growth of the sector, which in turn brings private funding into the wider ecosystem. According to various news outlets, UAE’s investments in space-related industries have already surpassed $6 billion and government investments look set to continue through vehicles such as the $820 million National Space Fund.

The Strategic Development Fund (fully owned by EDGE) is investing in early-mid and growth stage companies with strong technology which add value to the businesses and potentially benefit the UAE space economy (for example SDF investments in international space companies like HawkEye 360, an American geospatial analytics).

The variety and volume of activity across the space sector in turn generates more anticipatory attention and innovation across expected and unexpected areas both nationally, regionally and globally. A clear illustration of this is the ‘Courts of Space’, an initiative launched by the Dubai International Finance Centre and Dubai Future Foundation, signalling the intent of the UAE to play a leading role in advancing its judicial systems to specifically direct capacity and capability to commercial space-related disputes. The initiative has produced a set of guidelines to support space-related disputes and is training judges to become space-related dispute experts with courses on space regulations by international bodies and regional agencies. 

Conclusions in policy and practice 

The UAE space sector is growing rapidly and key elements are present to sustain this growth: critical to this is the stable support of UAE leaders and the growth of governance, but also milestones that ‘pace’ growth in capacity, and national linkages across the UAE agencies and firms that also explore international linkages.

The UAE is betting on space as one of drivers of its future economies. While the development of a national space economy is inevitably linked to global developments in technologies and regulatory frameworks as well as to security and defence, today the UAE pathway remains clear and promising. 

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