The IPL newsletter: Volume 24, Issue 498

January 15, 2023

News from the IPL

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RESEARCH

Quantum Potential: The Expert Panel on the Responsible Adoption of Quantum Technologies

Council of Canadian Academies (CCA)
This new expert panel report from the Council of Canadian Academies (CCA) outlines a responsible approach to quantum-technology adoption. The report explores the commercialization potential of quantum technologies, articulates Canada’s position within the global quantum value chain, and examines those conditions and policy levers that might promote their responsible adoption. IPL Affiliated Faculty Member Darius Ornston served on the expert panel. IPL Affiliate Dan Munro served as a reviewer. IPL Co-Director David Wolfe supervised the review process.

Editor's Pick

How Clean Will US Hydrogen Get? Unpacking Treasury’s Proposed 45V Tax Credit Guidance

Ben King, John Larsen, and Galen Bower, Rhodium Group
The US Internal Revenue Service (IRS) released proposed guidance on the Inflation Reduction Act's clean hydrogen production tax credit on December 22. This post summarizes the IRS’s guidance, which lays out clear rules for how to achieve the emissions-based credit tiers all the way up to $3/kg for the cleanest producers. The authors find that key provisions of the proposal can help to prevent adverse emissions outcomes, including a transition to hourly temporal matching in 2028 and incrementality and regionality requirements. The post also unpacks some open questions in the IRS’s proposal, notably around whether or how existing zero-emitting generators could qualify for the credit.

Cities & Regions

Understanding Regional Branching: Knowledge Diversification via Inventor and Firm Collaboration Networks

Dieter F. Kogler, Adam Whittle, Keungoui Kim & Balázs Lengyel, Economic Geography
The diversification of regions into new technologies is driven by the degree of relatedness to existing capabilities already present in the region. In cases where opportunities for diversification are rather limited, external knowledge that spills over from neighboring regions or from farther away might become an important driver of regional diversification. Despite the relative importance of interregional knowledge flows via collaborative work, we still have a very limited understanding of how collaboration networks across regions might facilitate diversification processes. The present study investigates the diversification patterns of European metropolitan and nonmetropolitan regions into new knowledge domains via technology classes reported in patent applications to the European Patent Office. The findings indicate that externally oriented inventor collaboration networks increase the likelihood that a new technology specialization enters a region, but this external orientation is less important for related diversification than for unrelated diversification. Further, the results demonstrate that interregional collaboration networks help diversification into unrelated technologies if external knowledge sourcing is based on a diverse set of regions and if collaboration is intense within companies located in distinct regions. Within-firm collaborations across regions can compensate for missing related skills in metropolitan and in nonmetropolitan regions alike but are especially important in nonmetropolitan regions. These results provide new evidence about the importance of knowledge flows within multilocation firms in the technological knowledge diversification of regions.

Statistics

Spending on research and development in the higher education sector, 2021/2022

Statistics Canada
In 2021/2022, the higher education sector in Canada spent $16.6 billion on R&D, an increase of 4.5% from the previous year. This marked the 12th consecutive annual increase in R&D spending by the sector. Higher education R&D is funded through multiple channels, including institutional or internal resources, and external sources such as government grants, partnerships with businesses or foreign entities, and non-profit organizations.

Patsnap releases 2023 Global Innovation report

Patsnap
While innovation is driven by a wide array of individuals, organizations, and institutions, a significant portion of groundbreaking innovations can be attributed to a select group of tech giants. Patsnap releases the annual report “2023 Global Innovation Report”, to identify the leaders and disruptors, as well as to illustrate the dynamic landscape of innovation. Utilizing Patsnap’s’ Innovation Capability Evaluation Model, the report demonstrates the 100 top-performing companies as the “2023 Global Innovation 100”, celebrating excellence in innovation, they also discover 50 rapidly growing companies with groundbreaking innovations as our “2023 Global Disruption 50.”

2024 Global Cleantech 100 Report

Cleantech Group
The Cleantech Group is a company that provides research, consulting and events to catalyze opportunities for sustainable growth powered by innovation. This report provides a list of innovators with "the technologies and determination to take us from commitments to actions in the sprint to net-zero." The report also outlines the changing market trends "that give us hope of a sustainable future and the drivers behind the progress of each sector." Also see BetaKit's article discussing the 13 Canadian firms that have made the list.

Innovation Policy

Update on federal innovation policies and initiatives

Department of Finance Canada
The Government of Canada recently provided an update on federal support for Canada’s innovation ecosystem, with a focus on improving existing programs that support Canadian businesses. The government will launch consultations in January 2024 on a cost-neutral modernization of the Scientific Research and Experimental Development (SR&ED) tax incentive program. The update also noted that the transition of NRC IRAP to the Canada Innovation Corporation (CIC) will now take place following the full implementation of the CIC no later than 2026-2027. The government will be seeking advice from leading Canadian investors, including pension funds, about the launch of the CIC.

Innovation policy as an instrument for driving transformation – lessons from practice

Sofia Avdeitchikova, Sylvia Schwaag Serger, Papers in Innovation Studies Lund University, CIRCLE - Centre for Innovation Research
In recent years, countries, regions, municipalities and the EU Commission have introduced a
significant number of innovation policy initiatives under the banner of ‘missions’, ‘societal
challenges’, sustainability and ‘transformation’, or systemic change. In parallel, there has been a
rapidly growing body of literature seeking to analyze or assess these real-world manifestations of
attempts to pivot innovation policy towards environmental and societal challenges. The aim of this chapter is to provide a reflexive overview of state of the art of the knowledge on transformative innovation policy design and implementation. To contribute real-world, real-time learning for planned or ongoing policymaking, the article also synthesize lessons and insights from recent policy initiatives in Sweden, Finland and the Netherlands, with the purpose of distilling them into policy-relevant observations. Based on these, the authors draw conclusions on what recent experiences from trying to design and implement transformative innovation policies in the respective national and institutional contexts tell us about the role of innovation policy, and implicitly, the role of the state, in driving transformation.

'Seized the moment': Watershed year for EVs paving way for billions in new investment, Champagne says

Naimul Karim, Financial Post
This recent interview with Innovation Minister Francois-Philippe Champagne summarizes the Government of Canada's efforts during 2023 to build out the EV supply chain. The interview discusses the multi-billion-dollar deals with battery and automakers Stellantis NV, LG Energy Solution Ltd., Volkswagen AG and Northvolt AB to build three battery plants. The interview also touches on policy approaches regarding foreign investment in critical mineral companies.

Biden-Harris Administration Announces CHIPS Preliminary Terms with Microchip Technology to Strengthen Supply Chain Resilience for America’s Automotive, Defense, and Aerospace Industries

The White House
The Biden-Harris Administration recently announced that the U.S. Department of Commerce and Microchip Technology Inc. have reached a non-binding preliminary memorandum of terms (PMT) to provide approximately $162 million in federal incentives under the CHIPS and Science Act to support the onshoring of the company’s semiconductor supply chain. This investment would enable Microchip to significantly increase its U.S. production of microcontroller units (MCUs) and other specialty semiconductors built on mature-nodes critical to America’s automotive, commercial, industrial, defense, and aerospace industries and create over 700 direct construction and manufacturing jobs.

Gen-AI: Artificial Intelligence and the Future of Work

International Monetary Fund
Artificial Intelligence (AI) has the potential to reshape the global economy, especially in the realm of labor markets. Advanced economies will experience the benefits and pitfalls of AI sooner than emerging market and developing economies, largely due to their employment structure focused on cognitive-intensive roles. There are some consistent patterns concerning AI exposure, with women and college-educated individuals more exposed but also better poised to reap AI benefits, and older workers potentially less able to adapt to the new technology. Labor income inequality may increase if the complementarity between AI and high-income workers is strong, while capital returns will increase wealth inequality. However, if productivity gains are sufficiently large, income levels could surge for most workers. In this evolving landscape, advanced economies and more developed emerging markets need to focus on upgrading regulatory frameworks and supporting labor reallocation, while safeguarding those adversely affected. Emerging market and developing economies should prioritize developing digital infrastructure and digital skills

Policy Digest

Seizing Canada’s Opportunity: Perspectives from Business Leaders

Accelerate
This report from Accelerate, Canada’s Zero Emission Vehicle (ZEV) industrial alliance draws together perspectives from the CEOs and the most senior executives from 20 companies across the broad Canadian supply chain on what could constitute a successful ZEV industry for Canada and recommends four steps to achieve this goal. The accompanying Policy Options article emphasizes the need to "evolve ZEV policy to focus on building our supply chain – specifically industrial plans that position Canada to capture as much value as possible from the global shift to zero-emission mobility, including through the sustainable extraction and processing of critical minerals, the development of battery materials and technologies, and the manufacturing and assembly of electric vehicles and their components."

The report summarized the four recommendations to help frame an integrative industrial policy discussion aimed at building a thriving ZEV sector as follows:

1. Because Canada is uniquely positioned globally to be relevant in many parts of the ZEV industry, significant public investment should be distributed across the entire supply chain, including mid-stream sectors that can process and refine Canadian natural resources instead of having them simply leave the country as raw material.

2. Canada is best-positioned if it views the opportunity before it as one primarily focused on North America, given the existing critical mass of vehicle production within the USMCA free trade region and a growing consensus that the EV sector’s heavy reliance on China represents a significant source of both geopolitical and supply chain risk.

3. What gets measured gets done. Key performance indicators are critical to establishing an industrial plan and to understand if Canada is achieving what it sets out to do. Such KPIs could include setting targets for Canadian-sourced inputs into North American-produced ZEVs, production-related greenhouse gas reductions, or jobs created by the broad mining-to-mobility ZEV industry.

4. A ZEV industrial policy for Canada should drive production and propel Canadian innovation primarily focused on scaling new technologies that can make the production of ZEVs and their constituent components more sustainable and thus suited to their promise of reducing global emissions.

Events

EVENTS

ISS2024

June 9-11, 2024, Gothenburg, Sweden
ISS2024 is the 20th biennial conference of The International Joseph A. Schumpeter Society. The conference takes place in Gothenburg, Sweden, between Sunday 9th June and Tuesday 11th June, 2024. The ISS2024 conference theme is "Transformation: Creative Accumulation and Creative Destruction in the Economy". The Deadline for submitting abstracts is Jan. 15th 2024.

2024 Industry Studies Association Annual Conference

June 13-15, 2024, Sacramento, CA, USA
This year's ISA conference is titled Empowering Community Wellbeing: Clean Energy, Sustainability and Industrial Strategy and will be held at California State University, Sacramento. In the heart of the world’s largest subnational economy, California, the Industry Studies Association proudly presents its annual conference with a theme that resonates with the future of our planet and communities. The conference will explore the dynamic interplay between California's pioneering efforts in clean energy and sustainability and their profound impacts on industrial strategy and community wellbeing around the world. Call for Paper and Panel Submissions

Technology Transfer Society Annual Meeting 2024

September 11-13, 2024, Brussels, Belgium
The conference theme is 'Blurring Boundaries and Ambiguous Roles: Universities and the Entrepreneurial Ecosystem.' The deadline for abstract submissions is February 15, 2024.

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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe