News from the IPL
ANNOUNCEMENTS
Newly Redesigned U.S. Cluster Mapping Website Launched
U.S. Cluster Mapping recently relaunched their website with new content and design. This website will allow policy makers, economic development professionals, and researchers will find powerful data and tools to understand clusters, improve institutions, and locate appropriate partners across the country.
Editor's Pick
Declining Business Dynamism in the United States: A Look at States and Metros
Ian Hathaway and Robert E. Litan
Business dynamism is the process by which firms continually are born, fail, expand, and contract, as some jobs are created, others are destroyed, and others still are turned over. Research has firmly established that this dynamic process is vital to productivity and sustained economic growth. Entrepreneurs play a critical role in this process, and in net job creation. But recent research shows that dynamism is slowing down. Business churning and new firm formations have been on a persistent decline during the last few decades, and the pace of net job creation has been subdued. This decline has been documented across a broad range of sectors in the U.S. economy, even in high-tech. While the reasons explaining this decline are still unknown, if it persists, it implies a continuation of slow growth for the indefinite future, unless for equally unknown reasons or by virtue of entrepreneurshipenhancing policies (such as liberalized entry of high-skilled immigrants), these trends are reversed.
Innovation Policy
Turning it Around: How to Restore Canada’s Trade Success
The Canadian Chamber of Commerce
This paper examines Canada’s lagging trade performance and the case for strengthening trade promotion and economic diplomacy. Based on consultations with member companies and other stakeholders, it reviews what Canada is already doing in this area and provides a menu of recommendations for improvement.
Exports and American Information and Communications Technology Companies and Workers
Technology CEO Council
The information and communications technology (ICT) industries are a vital part of the American economy, employing 4.2 million U.S. workers in 2012. Every sector of the economy relies on ICT hardware, software and services to some degree. In addition, over 70 percent of ICT spending occurs outside of the United States. In 2012, U.S. ICT exports exceeded $270 billion, or more than $1 out of every $8 in total U.S. exports. They include $201 billion of domestically manufactured goods like Intel or Micron semiconductors; $72 billion of ICT services such as consulting services provided by companies like IBM and Xerox; data and computer processing services like those provided by EMC; and royalties collected by U.S. companies for software purchased by customers around the world. This study explores the importance of ICT exports to states and congressional districts across the United States.
Innovation and Innovation Policy in the Nordic Region
Jan Fagerberg and Morten Fosaas, MPRA
This paper reports on a desk-study on innovation performance and policies influencing it in four Nordic countries.The first section introduces the study and deals with conceptual issues. Section two contains a descriptive analysis of innovation activities in the Nordic area and a broader set of countries with which the Nordic countries may be compared with the help of data from the Community Innovation Survey (CIS) and other relevant sources. Section three of the paper, then, presents – for four Nordic countries – an analysis of their innovation policies and how these have evolved towards their present stance. Lessons and questions for further research are discussed in the fourth and final section.
Cities, Clusters & Regions
Are Cities the New Growth Escalator?
Enrico Moretti, The World Bank
Urban areas tend to have much more productive labour and higher salaries than rural areas, and there are vast differences across urban areas. Areas with high salaries and high productivity tend to have employers that invest in much more research and development than areas with low salaries and low productivity. This paper addresses two questions. First, it discusses the causes of these vast geographical differences in wages, human capital, and innovation. The second part of the paper discusses regional economic development policies. The European Union has an even more ambitious program transferring its development funds to regions with below average incomes. Asian countries, especially China, have a variety of special economic zones, designed to attract foreign investment to specific areas. Such regional development policies, often called place-based economic policies, are effectively a form of welfare, targeting cities or regions, not individuals. While such policies are widespread, the economic logic behind them is rarely discussed and even less frequently understood. This paper clarifies when these policies are wasteful, when they are efficient, and who the expected winners and losers are. Understanding when government intervention makes sense and when it does not is a crucial first step in setting sound economic development policies. Local governments can certainly lay a foundation for economic development and create all the conditions necessary for a city’s rebirth, including a business climate friendly to job creation.
Arizona’s Bioscience Roadmap 2014-2015
Flinn Foundation
The Arizona Bioscience Roadmap is a long-term plan to make the state’s bioscience sector globally competitive. Building on an initial strategic document released in 2002, the updated strategy offers 77 potential actions the state could pursue to support bioscience entrepreneurship, research translation, talent development, institutional connectivity and collaborations. Risk capital plays a key role in the updated strategy, which challenges Arizona to attract an annual share of national venture capital investment equal to its share of population by 2025. A review of the roadmap’s 19 original goals found that the state has made progress on all 19, including substantial progress on 10. Academic research expenditures in the biosciences more than doubled by 2011, funding from the National Institutes of Health grew faster than the national average and the state’s number of bioscience firms increased by more than 30 percent.
John Healy (MP) and Les Newby, The Smith Institute
The UK economy is the sum of many elements, powered in part by functioning local and regional economies based around big cities and their catchments, labour markets, clusters of businesses, trade flows, natural resources, transport and infrastructure. In a country where the economic divisions between London and the South East and other regions further from the capital are wide and widening, active policies to promote economic development at local and regional levels are essential. This report provides the basis for a new generation of economic policies designed to boost local and regional economic development. It reviews the evidence and experience of the Regional Development Agencies (RDAs), which operated throughout the last decade, and the Local Enterprise Partnerships (LEPs) which were created in 2010 and operate today.
Henning Kroll, Technopolis
The objective of this thematic paper is to focus attention not only on the question of how local, place-based strategies can be formally conceived and documented but on how they can be filled with life and put into practice. Furthermore, it will ask how the “process of entrepreneurial discovery” can be developed from a one-off exercise into a continuous and sustainable process that creates a reliable basis for policy making throughout the next support period.
Towards the Societal System of Innovation: The Case of Metropolitan Areas in Europe
Serder Turkeli and Rene Wintjes, UNU-MERIT
Innovation serves many purposes. In this paper we study new varieties of innovation and innovation policy which address societal challenges in the largest cities in Europe. These metropolitan areas consistently show resounding characteristics in terms of multiplicities of innovation, governance and societal challenges. They serve as ‘living labs’ and ‘lead-markets’ for solutions to societal challenges. The identified and analysed cases of social innovation initiatives in these metropolitan areas organize for new resourceful interactions between the demand for social innovations and the capacities to generate multi-domain solutions. The authors construct an overarching yet deepened concept: “the societal system of innovation”, a theoretical-analytical framework based on empirical background.
Statistics & Indicators
2ThinkNow
Silicon Valley beat previous winners Boston, New York and Vienna to become the world’s most innovative city in 2014, in the 8th annual Innovation Cities Index. Behind the San Francisco – San Jose area, this year’s winners for the global innovation economy in order were New York, London, Boston (past winner), Paris, Vienna, Munich, Amsterdam, Copenhagen and Seattle in the global top cities. Regionally, San Francisco – San Jose won in the Americas, Seoul won for the first time in Asia, London won in Europe and Dubai came first in the Emerging region for the second time. Sydney beat long time Australian winner Melbourne for first place overall, and 17th globally. According to the analysts, this year’s ranking reinforces the power of Silicon Valley, just when many voices are questioning the Valley’s role in both tech and non-tech innovation.
New Evidence on the Determinants of Industrial Specialization
Asa Johansson and Eduardo Olaberria, OECD
Industrial specialization has important implications for economic performance; therefore, understanding its determinants is of key policy relevance. This paper quantifies the relationship between factor endowments, policies and institutions and patterns of industrial specialization in production using a new cross-country dataset compiled by WIOD that includes 37 OECD and non-OECD countries and 26 sectors. An advantage of this database –as compared with those used by previous studies- is that makes it possible to look at industrial specialization in terms of value added instead of gross exports, covering both services and manufactures in a panel of advanced and developing economies. The empirical methodology is based on the idea that industries vary in the conditions that they need for production, and countries differ in their ability to provide for these industry-specific requirements. The report finds that not only cross-country differences in factor endowments, such as capital and labour, but also differences in investment in R&D and policies or institutions, such as financial development, tariffs and taxes, and product and labour market regulation, can explain cross-country differences in industrial structure.
Policy Digest
Making Innovation Policy Work: Learning from Experimentation
OECD
This book explores emerging topics in innovation policy for more inclusive and sustainable growth, building on concrete examples. It develops the notion of experimental innovation policy – which integrates monitoring and feedback at the policy design stage, and occurs continuously to improve impact and implementation. This approach should help improve the quality and efficiency of public expenditures supporting innovation policy. Experimental policy making is particularly important for new and emerging innovation domains, where the scope for learning and improvement is the greatest. To make the discussion as concrete and relevant as possible for practitioners and policy makers, three emerging domains of innovation policy are explored in greater detail: innovative entrepreneurship, green innovation, and pro-poor or base-of-the-pyramid (BoP) innovation.
Key Finding and Policy Recommendations
- Modern approaches to innovation (and industrial) policy require search, experimentation, monitoring, learning and adaptation, all of which need to occur in the context of international openness;
- These new policy approaches also require close cooperation with private and non-governmental actors, who are often better placed than governments to identify barriers to innovation, and point to areas for productive investment or policy action;
- Policy makers should incorporate monitoring and evaluation already at the design stage to improve the quality and efficiency of public expenditures supporting innovation policy;
- Government can achieve results in the innovation area by involving agencies and actors on the periphery of policy making, which can limit capture by vested interests and may enable more creative and cooperative policies than those emerging from more central agencies. Such agencies may also be able to do more with less;
- Learning about innovation policies would benefit from early and periodic sharing of lessons from policy experimentation at the global level, which will require strengthened mechanisms to identify and diffuse good practices, including through specific knowledge platforms and networks.
Events
RSA Workshop on the Evaluations of EU Cohesion Policy in 2014+
Prague, 10 June, 2014
In recent years, we have witnessed a significant increase in the use of rigorous research methods in the evaluations of the EU Cohesion Policy. The main objective is to identify the actual impacts and how to increase policy efficiency. The rationale behind a workshop on evaluations is the need to assemble academics investigating the issues’ effectiveness, impacts and added value of EU Cohesion Policy as well as practitioners working with this policy. The goal of the workshop is to improve knowledge and the application of evaluation results in practice. It will achieve this objective through the sharing of experience with evaluations, methods and the combination of qualitative and quantitative methods as well as the application of theory-based evaluations. At the beginning of the new policy cycle 2014-2020, many questions arise regarding the reformed Cohesion Policy. This workshop, hosted jointly by the University of Economics and the Czech Evaluation Society at the Charles University and organized in collaboration with the partner institutions of the RSA Research Network on EU Cohesion Policy, will provide a forum for debating some of the most salient and burning of those questions.
Creative City Summit 2014: Love Your City – Transforming Communities Through Culture
Hamilton, Ontario, 11-13 June, 2014
Through interactive sessions, case studies and keynote addresses, experts will share real world projects that are transforming cities across the country. The 2014 Summit theme focuses on communities that are creating conditions in which culture can thrive. Presenters will explore how leadership, innovative thinking, partnership building, and simply doing things differently can lead to a creative community. Delegates will gain insight into integrating culture within other local planning initiatives; encouraging and stimulating “eventful” cities; planning community wide participatory events; initiating creative placemaking projects; and creating cultural hubs in their community.
DRUID Society Conference 2014: Entrepreneurship-Organization-Innovation
Copenhagen, Denmark, 16-18 June. 2014
he conference will include a number of distinguished plenary presenters and intends to map theoretical, empirical and methodological advances, contribute with novel insights, clarify and develop intellectual positions and help identify common grounds and lines of division in selected current scientific controversies within the field. In 2014, the DRUID Special Flavor will be on Food Innovation. During the last decade, the food industry has seen notable innovation and entrepreneurship throughout its value chain, including, for example, search for original raw materials, adaption of advanced process technologies, exploration of new cooking methods and development of unique restaurant models. DRUID2014 will feature scientific as well as social activities reflecting Food Innovation, including paper sessions on innovation and entrepreneurship in the food industry, talks by leading chefs, and samples of innovative food and drink. With its New Nordic Cuisine, a burst of new Michelin-starred restaurants, and capturing the World’s Best Restaurant as well as Bocuse d’Or awards for several consecutive years, Copenhagen has established itself at the heart of food innovation. In addition, there is a broader movement around the notions of regional and modernist cuisine. The DRUID Society will of course take advantage of its local connections to present conference participants with samples of just how innovative the local food scene can be.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.