News from the IPL
RESEARCH
Reshoring Production and Restoring American Prosperity: A Practical Policy Agenda
American Affairs, Dan Breznitz & David Adler
This article is co-authored by IPL co-director Dan Breznitz. The article develops a practical policy agenda for reshoring production in the United States. The article asserts that the United States needs to rebuild its production capabilities and reintroduce market competition in ways that support domestic production. The article puts forth three principles that should guide the strategy to foster onshoring and reshoring. The first principle is competition—that is, all such policies should aim to increase competition. The second principle is correcting market failure in the supply of public and semipublic goods—that state action should be focused toward areas in which we cannot expect the private market to come up with optimal solutions. The third and last principle is the guiding idea of “no taxation without representation”—if taxpayers’ money is used to subsidize private companies, we should ensure that the fruits of such subsidies are shared by all taxpayers and that the voice of all Americans—not only of those with the most expensive lobbyists—is heard with regards to how this money is spent, by whom it is spent, and toward what goals.
Editor's Pick
Business Innovation and Growth Support, 2018
Statistics Canada
The federal government manages program streams offering Business Innovation and Growth Support (BIGS) through its departments and agencies. This support can vary by enterprise size, industry and other characteristics. In this analysis, BIGS program streams administrative data are linked to the Linkable File Environment. The Linkable File Environment facilitates the creation of microdata files that pertain to Canadian enterprises. In order to better understand the beneficiaries of this support, the following analysis presents the distribution of federal support in 2018 by enterprise size and industry. The data show that, in general, the larger the enterprise, the higher the average value of support received per enterprise. Over four-fifths of the businesses that received support from the Government of Canada’s BIGS in 2018 were small enterprises. While relatively few large enterprises received innovation and growth-related federal support, they accounted for over two-fifths of the total value of support in 2018. By sector, manufacturing businesses received the largest share (29.0%) of the total value of support in 2018, while professional, scientific and technical services accounted for the largest share of businesses (28.0%) that received support.
Cities, Clusters & Regions
Deyu Li, Gaston Heimeriks, & Floor Alkemade, Regional Studies
This paper explores the emergence of new combinations of unrelated technologies at the regional level. The analyses show that for solar photovoltaic inventions, such unrelated technologies are more likely to be recombined when they strongly co-locate in the same region rather than in different regions. Furthermore, the authors show that this pattern is common to renewable energy inventions, although different dynamics are observed in different types of renewable energy technology. The results highlight the importance of place-based capabilities in facilitating breakthrough inventions in renewable energy technologies.
Statistics
The Next Wave: Automation and Canada’s Labour Market
Rosalie Wyonc, C.D. Howe Institute
This report examines automation in Canada’s labour market. The report assesses the likely impact of technological automation on Canada’s labour market and compares these results to past predictions. The author finds a lower proportion of employment at high risk of automation (about 22 percent) than most previous estimates. However, key demographic groups, like Black and Indigenous individuals, are more susceptible to job loss depending on their occupations.
Microenterprise R&D Performance by State
Colin Edwards, SSTI
Stemming from a collaboration between the Census Bureau and the National Center for Science and Engineering Statistics (NCSES) within the National Science Foundation (NSF), a new data set aims to untangle the dynamics of research and development (R&D) performed by private companies. Specifically, the new Annual Business Survey incorporates previously experimental data on the R&D performance by microenterprises — businesses that employ between one and nine people. SSTI’s analysis of this new data shows the total R&D performed by microenterprises in each state, and the portion of that R&D which the companies paid for themselves. The post includes interactive maps visualizing data on microenterprise R&D performance by state. California ($1,884 million); New York ($409 million); and Massachusetts ($384 million) were the top three states for R&D performance by microenterprises in 2017.
Deloitte
New research from Deloitte, “Automation with Intelligence: Pursuing Organization-wide Reimagination,” reveals that the number of organizations deploying automation at scale has tripled in the space of two years. COVID-19 accelerated the need for automation solutions – particularly those that offer options for scalability and rapid deployment – within enterprise organizations. The survey, now in its fifth year, polled 441 executives from 29 countries to examine C-suite and leadership perspectives on the state of automation within organizations today, how IA is impacting employees and the effect of COVID-19 on automation strategies. 73% of organizations worldwide are now using automation technologies – such as robotics, machine learning and natural language processing – up from 58% in 2019
Declining Industrial Disruption
James E. Bessen, Erich Denk, Joowon Kim, & Cesare Righi, Boston Univ. School of Law, Law and Economics Research Paper
Recent research finds that markups are rising, suggesting declining competition. But does less price competition mean less Schumpeterian “creative destruction”/industry dynamism? This paper reports the first recent estimates of trends in the displacement of industry-leading firms. Displacement hazards rose for several decades since 1970 but have declined sharply since 2000. Using a production function-based model to explore the role of investments, acquisitions, and lobbying, the authors find that investments by dominant firms in intangibles, especially software, are distinctly associated with greater persistence and reduced leapfrogging. Software investments by top firms soared around 2000, contributing substantially to the decline. Also, higher markups are associated with greater displacement hazards, linking rents positively with industry dynamism. While technology is often seen as disrupting industry leaders, it now appears to help suppress disruption.
Innovation Policy
Challenge-driven economic policy: A new framework for Germany
Rainer Kattel, Mariana Mazzucato, Keno Haverkamp, & Josh Ryan-Collins, UCL Institute for Innovation and Public Purpose
German government is stepping into a new era with its COVID-19 recovery support measures. It is leaving behind its ordo-liberal foundations which see the role of the state as making sure policy conditions enable markets to function properly. In this view, the state should fix market failures and leave the rest to industry. Already before the pandemic, German policy makers were showing increasing appetite to go beyond market-fixing and experiment with a more overt activist state. With the handling of COVID-19, Germany has taken another step in this direction– it is now at the forefront of taking bold policy action to reshape its economy in the face of the pandemic. Yet, this paper argues Germany’s public funding of R&D supports mostly incremental advances and its financial system is largely still funding carbon lock-in and value extraction rather than transforming the economy to deal with 21st century challenges. Germany needs to build on its recent economic policy initiatives, and successful institutions such as the KfW, and develop a bold new industrial strategy that encompasses science, technology and innovation, financial and procurement policies. The new industrial strategy is not about ‘more state’ or ‘less state’, but a different type of state. One that is able to act as an investor of first resort, catalysing new types of growth, and in so doing crowd in private sector investment and innovation which represent expectations about future growth areas. This requires a new form of collaboration between state and business – more about picking the willing than picking winners.
Policy Digest
Official Launch of the Innovation Asset Collective
Innovation Asset Collective
Wednesday December 9th marked the launch of the Innovation Asset Collective (IAC), Canada’s first patent collective program. IAC is focused on supporting SMEs in the data-driven clean technology sector with their IP needs. The IAC is supported by a $30 million federal contribution from the Department of Innovation, Science and Economic Development under the 4-year Patent Collective Pilot Program, one of the key initiatives of the federal government’s Intellectual Property (IP) Strategy, announced in 2018.
IAC aims to help Canadian firms “maximize the value of their intangible assets, while benefiting from the services of the collective and setting the stage for international growth.” IAC will also “purchase and license patents on behalf of its members, who maintain control and ownership of their own IP.”
The launch event included a panel discussion and a special address by The Honourable Navdeep Bains, Minister of Innovation, Science and Industry, as well as discussion from the following panelists:
- Lally Rementilla, Managing Partner, IP-Backed Financing, Business Development Bank of Canada
- Dana O’Born, Strategic Initiatives Director, Council of Canadian Innovators
- Daniela Roeper, Founder & CEO, Borealis Wind
- Peter Cowan, Co-Founder, IAC
The IAC provides four types of services to member firms:
Education, Advisory, and Best Practices
World class education and bespoke advisory services so members can develop effective and strategic IP portfolios. IAC’s curriculum is created by global experts and delivered by qualified professionals focused on best practices. Member companies are supported as they develop tailor-made IP strategies.
IP Patent Generation
Strategic IP solutions for members who are working to generate ideas and build patent portfolios to remain competitive as they scale. IAC will assist in this solution through financing, funding, or subsidizing patent filings and IP portfolio creation for members.
Freedom to Operate
Cost-effective solutions to access IP (patent). IAC will do this through Freedom to Operate (FTO) acquisitions or access to defensive patents for member use based on patents that are within the scope of technology that members may be interested in.
Prior Art Library, IP Intelligence
Access to a prior art library for both defensive use and to increase the quality of members’ patent filings. Litigation strategy assistance. SMEs can continue to work with their chosen law firm. IAC membership will act as a complement to this partnership; it will not replace it. Member companies will also have ongoing access to IP intelligence and market data to develop their own individual business and IP strategies.
Links to recent IPL webinars
Inclusive Innovation: COVID and After
This is a recording of the December 10th 2020 webinar discussing the importance of inclusive innovation; policies needed to bring it about; opportunities and prospects for doing so in the era of COVID-19; and new initiatives for measuring and tracking progress – including GDP 2.0 and the Innovation Policy Lab’s Inclusive Innovation Monitor. Speakers: Dan Breznitz, Susan Helper, Daniel Munro, & Anjum Sultana
Urban Leadership & Innovation During Times of Crisis
This is a recording of the Dec 3rd 2020 webinar discussing how urban leaders are the frontlines of crisis response, from the COVID-19 the pandemic and its associated economic, social and fiscal challenges to the growing protests over racial and economic justice and the looming reality of climate change. This session highlights the way urban leaders can best respond to build more inclusive, just and resilient cities and generate the policy innovations that can shape enduring change. Speakers: Richard Florida, Anita McGahan, Shauna Brail, & Supriya Dwivedi
Canada’s Innovation Imperative
This is a recording of the November 9, 2020 event. Innovation contributes to regional and national prosperity and is a well-established economic concept. To succeed in building capacity and strength in this technical realm, government policies must be deliberate, systematic and rooted in expertise. Data shows that Canada missed the shift from the tangible to intangible economy. Moving forward, how can we make sure Canada builds competitive advantage through policy that leverages innovation for tomorrow’s economy? Speakers: Jim Balsillie, Dan Breznitz, Meagan Simpson (moderator).
This is a recording of the November 12, 2020 event. Bank of Canada Senior Deputy Governor Carolyn A. Wilkins outlines how the COVID-19 crisis has damaged economic potential and discusses what will be needed to thrive in the post-pandemic world. Speakers: Carolyn Wilkins, Michael Sabia, Shauna Brail (moderator).
Policymaking Under Uncertainty
This is a recording of the Oct. 14th, 2020 event focused on Policymaking Under Uncertainty. Policymaking is a challenging endeavour under the best of times, as politicians and bureaucrats seek to juggle the need for rapid and innovative interventions on the one hand with democratic accountability on the other. Speakers: Uri Gabai, Darius Ornston, Sylvia Schwaag Serger, and Dan Breznitz
This is a recording of the Jul 16th, 2020 event focused on exploring the short and long term impacts of the COVID-19 pandemic on innovation and entrepreneurial ecosystems. Panelists included Catherine Beaudry, Ben Spigel, Tara Vinodrai, and David Wolfe.
Will COVID-19 Bring Us Together or Blow Us Apart? The Global Security Implications of the Pandemic
This is a recording of the July 7th, 2020 event focused on the national and international security implications of the COVID-19 pandemic. Janice Stein discusses the historical security lessons of previous pandemics and depressions, Jon Lindsay considers emerging military and strategic dangers exacerbated by COVID-19, and Ron Deibert discusses the cybersecurity and surveillance threats associated with the unprecedented relocation of life online.
This is a recording of the June 11, 2020 event focused on how will COVID-19 shape the future of our cities. Join experts Anita McGahan, Shauna Brail (School of Cities), and Nathalie des Rosiers (Massey College), Richard Florida (School of Cities Professor) as they discuss cities after COVID with Marcia Young, host of CBC’s World Report.
This is a recording of the June 11, 2020 event focused on the impact of COVID-19 on higher education. Speakers: Shiri Breznitz, Heike Mayer, Donald Siegel and Elvira Uyarra.
The Future of (Decent?) Work After COVID-19
This is a recording of the May 26, 2020 Munk School / Innovation Policy Lab / CIFAR event focused on the future of work after COVID-19. Speakers: Dan Breznitz, Zabeen Hirji and Peter Warrian.
This is a recording of the May 11th 2020 event focused on “what will the world look like in the wake of COVID-19?” Speakers: Shauna Brail, Anita McGahan, Tara Vinodrai and Shiri Breznitz.
COVID-19 and the World’s Grand Challenges
This is a recording of the May 8th 2020 event focused on “what impact will COVID-19 have on the achievement of the Sustainable Development Goals (SDGs)?” Speakers: Anita McGahan, Joseph Wong and Karlee Silver.
How is COVID-19 affecting global supply chains?
This is a recording of the April 29th 2020 event focused on “how is COVID-19 affecting supply chains in Canada and around the globe?” Speakers: Dan Breznitz, Shauna Brail and Steven Denney.
Events
Regional Innovation Policies Conference
Aalborg, Denmark, 25-26 March 2021 CANCELLED
Due to the COVID-19 outbreak the conference scheduled for March 25 and 26, 2021 in Aalborg, Denmark has been cancelled. The next RIP Conference is scheduled for Prague in August, 2021. The conference will focus on regions in transformation – as well as transformations in regional innovation policy and new developments in methods for defining and analyzing regions. Submission deadline: 30th November 2020.
May 10-13, 2021 | May 10 – Pre-conference Summer School
Virtual conference
The Partnership for the Organization of Innovation (4POINT0) is organizing the first ‘‘Policies, Processes and Practices for Performance of Innovation Ecosystems” (P4IE) international conference on 10-13 May 2020. Organized around eight highly relevant tracks, the conference offers participants the opportunity to discuss the impact of various technologies, practices, processes and policies, on innovation ecosystems, and the best means by which to design collaborative environments. The goal of the conference is to explore ways to strengthen Canada’s innovation through innovation ecosystems.
Subscriptions & Comments
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe