News from the IPL
INTRODUCTION
This newsletter is published by The Innovation Policy Lab at the Munk School of Global Affairs, University of Toronto, and sponsored by the Ministry of Research and Innovation. The views and ideas expressed in this newsletter do not necessarily reflect the views and policies of the Ontario Government.
ANNOUNCEMENTS
Canadian Government Announces $75 Million for $300 Million Late-Stage Venture Capital Fund
Recently, the Honourable Tony Clement, Minister of Industry, annouced that the government would provide the Business Development Bank of Canada (BDC) with $75 million in support of a new $300 million growth capital fund. The Tandum Expansion Fund will support the growth and expansion of tech companies by helping them penetrate new markets, expand production capacoty and provide additional working capital.
Legislation to Develop Science Parks Advances
Recently, the Senate Commerce, Science and Transportation Committee unanimously passed the Building a Stronger America Actdesigned to spur innovation and economic development through the development of science parks. The Act allows the Secretary of Commerce to guarantee up to 80% of loans exceeding $10 million for the construction of science parks, which seek to encourage new startup businesses, generate student interest in science and technology fields, and encourage relationships between universities and industry.
Editor's Pick
Innovation and Growth: Chasing a Moving Frontier
OECD
Innovation is crucial to long-term economic growth, even more so in the aftermath of the financial and economic crisis. In this volume, the OECD and the World Bank jointly take stock of how globalization is posing new challenges for innovation and growth in both developed and developing countries, and how countries are coping with them. The authors discuss options for policy initiatives that can foster technological innovation in the pursuit of faster and sustainable growth. The various chapters highlight how the emergence of an integrated global market affects the impact of national innovation policy. What seemed like effective innovation strategies (e.g. policies designed to strengthen the R&D capacity of domestic firms) are no longer sufficient for effective catch-up. The more open and global nature of innovation makes innovation policies more difficult to design and implement at the national scale alone. These challenges are further complicated by new phenomena, such as global value chains and the fragmentation of production, the growing role of global corporations, and the ICT revolution. Where and why a global corporation chooses to anchor its production affects the playing field for OECD and developing economies alike.
Innovation Policy
Higher Education to 2030: Volume 2, Globalization
OECD
Growing flows of knowledge, people and financing cross national borders and feed both worldwide collaboration and competition. These effects of globalization increasingly impact higher education. How then might the future higher education scene look at the global level? What are the challenges and opportunities brought by globalization? How can countries and institutions best cope with and benefit from future changes? Through both quantitative and qualitative analysis, this book provides a comprehensive and structured look at these essential questions. It explores the topic of cross-border higher education in terms of student, faculty and institutional mobility, providing a specific focus on academic research. Other issues addressed include higher education provision, financing, governance and quality assurance, with an emphasis on the use of market-like mechanisms. The book covers most OECD countries as well as many non-OECD countries and offers the reader specific reflections on China, India and European co-operation.
The Impact of the Economic Crisis on Innovation
Minna Kanerva and Hugo Hollanders, PRO INNO EUROPE
The financial crisis which started in 2007 has triggered a global economic downturn. This has resulted in at first falling economic growth rates followed by a real economic decline in many countries. Indicators of innovation performance, including those used in the European Innovation Scoreboard, have a time lag of one or more years and, therefore, do not yet reveal the full impact of the crisis that reached its height in the second half of 2008. This thematic paper is based on an analysis of the Innobarometer 2009 survey of innovating firms.
Outputs of Innovation Systems: A European Perspective
Charles Edquist and Jon Mikel Zabala, CIRCLE
This paper focuses upon the performance of innovation systems from an output perspective. It tries to characterize some European countries according to seven innovation output indicators in the manufacturing and service sectors. Innovation performance measurement is an important basis for the design and implementation of innovation policies as international comparison allows policy failures to be detected.
Incentives and Creativity: Evidence from the Academic Life Sciences
Pierre Azoulay, Joshua S. Graff Zivin, and Gustavo Manso
Despite its presumed role as an engine of economic growth, little is known about the drivers of scienti c creativity. In this paper, we exploit key di erences across funding streams within the academic life sciences to estimate the impact of incentives on the rate and direction of scientic exploration. This paper tracks the careers of investigators of the Howard Hughes Medical Institute (HHMI), which tolerates early failure, rewards long-term success, and gives its appointees great freedom to experiment; and grantees from the National Institute of Health, which are subject to short review cycles, pre-defined deliverables, and renewal policies unforgiving of failure. Using a combination of propensity-score weighting and difference-in-differences estimation strategies, it finds that HHMI investigators produce high-impact papers at a much higher rate than two control groups of similarly-accomplished NIH-funded scientists. Moreover, the direction of their research changes in ways that suggest the program induces them to explore novel lines of inquiry.
Cities, Clusters & Regions
Regions Matter: Economic Recovery, Innovation and Sustainable Growth
OECD
Why do some regions grow faster than others, and in ways that do not always conform to economic theory? This is a central issue in today’s economic climate, when policy makers are looking for ways to stimulate new and sustainable growth.OECD work suggests that there is no one-size-fits-all answer to regional growth policy. Rather, regions grow in very varied ways and the simple concentration of resources in a place is not sufficient for long-term growth. This report draws on OECD analysis of regional data (including where growth happens, country-by-country), policy reviews and case studies. It argues that it is how investments are made, regional assets used and synergies exploited that can make the difference. Public investment should prioritize longer-term impacts on productivity growth and combine measures in an integrated way. This suggests an important role for regional policies in shaping growth and economic recovery policies, but also challenges policy makers to implement policy reforms.
Cities, Towns and Renewable Energy
OECD
Local governments have the power to influence the energy choices of their citizens. Many cities and towns have already encouraged energy efficiency measures. Even so, as demand for energy services continues to grow, the energy infrastructure that every city and town depends on will need to be expanded, upgraded or replaced. This provides the opportunity to increase the deployment of renewable energy technologies and decentralised energy systems, and hence gain the multi-benefits of increased energy security, climate change mitigation and sustainable development, but also the social benefits of reduced air pollution, such as improved health and employment. Many combinations of policies have been employed to stimulate local renewable energy development. These policies include: local governance by authority; providing resources; enabling private actors; leading by example; allowing self-governance. Mega-city mayors, down to small-town officials, have successfully introduced such policies, although these vary with location, local resources and population.This report includes several case studies chosen to illustrate how enhanced deployment of renewable energy projects can result, regardless of a community’s size or location.The goals of this report are to inspire city stakeholders by showing how renewable energy systems can benefit citizens and businesses, assist national governments to better appreciate the role that local municipalities might play in meeting national and international objectives, and help accelerate the necessary transition to a sustainable energy future.
Annamaria Fiore, Maria Jennifer Grisorio and Francesco Prota, Universita degli Studi Bari
Increasing globalization, if properly exploited, can provide interesting opportunities for regional economies. Nevertheless, when they are not managed with a far-sighted approach, regions, and particularly those at an intermediate level of development, can lose their competitive advantages compared to regions of developing countries. Innovation is the main instrument for improving and ensuring competitiveness to enterprises and growth opportunities to local economies. The aim of this paper is to discuss the importance of public policies in reinforcing regional innovation systems, and the role of regional innovation agencies. It discusses the policies implemented by the Regional Agency for Technology and Innovation (ARTI) of Apulia, a region in Southern Italy. The paper also provides the first assessment of ARTI’s activities and some suggestions on how to improve regional R&D policies.
Statistics & Indicators
OECD Science, Technology and Industry Scoreboard 2009
OECD
At a time when world economy is in the midst of the most severe economic downturn since the Great Depression, the Scoreboardprovides the statistical information necessary to define a response to these global challenges. This edition of the Scoreboard illustrates and analyses a wide set of indicators of science, technology, globalisation and industrial performance in OECD and major non OECD countries (notably Brazil, Russia, India, Indonesia, China and South Africa). Indicators are organized around five issues: responding to the economic crisis, targeting new growth areas, competing in the world economy, connecting to global research, and investing in the knowledge economy.
The Brookings Institution
Nationwide, the recession is over—at least in the view of most economists in light of third quarter 2009 indicators. They revealed a real U.S. gross domestic product (GDP) increasing at a 2.8 percent annual rate, after four consecutive quarters of contraction. Most interpreted that rate of output growth, along with other signals such as increasing housing prices, as indication that the economic recovery is underway. Yet the recovery seems fragile. The output increase may have resulted largely from the replenishment of manufacturing inventories and from temporary federal policies: the “cash-for-clunkers” program (already over), the first-time homebuyer tax credit (now extended through April 2010), and the American Recovery and Reinvestment Act’s economic stimulus. As the effects of these policies recede, the recovery could slow or give way to yet another recession or a prolonged period of economic stagnation. This edition of the Monitor examines indicators through the third quarter of 2009 (ending in September) in the areas of employment, unemployment, output, home prices, and foreclosure rates for the nation’s 100 largest metropolitan areas.
Regional Innovation Scoreboard 2009
Hugo Hallanders, Stegano Tarantola, and Alexander Lozchky, PRO INNO EUROPE
This edition of the European Regional Innovation Scoreboard (RIS) provides a comparative assessment of innovation performance across the NUTS 2 regions of the European Union and Norway. As the regional level is important for economic development and for the design and implementation of innovation policies, it is important to have indicators to compare and benchmark innovation performance at regional level. Such evidence is vital to inform policy priorities and to monitor trends.
Bronwyn H. Hall, Jacques Mairesse, and Pierre Mohnen, NBER
This paper reviews the econometric literature on measuring the returns to R&D. The theoretical frameworks that have been used are outlined, followed by an extensive discussion of measurement and econometric issues that arise when estimating the models. The paper then provides a series of tables summarizing the major results that have been obtained and conclude with a presentation of R&D spillover returns measurement. In general, the private returns to R&D are strongly positive and somewhat higher than those for ordinary capital, while the social returns are even higher, although variable and imprecisely measured in many cases.
Policy Digest
Innovation in American Regions
The US Economic Development Administration commissioned this research project to put tools into the hands of local civic leaders and economic development practitioners so that they can more effectively compete in a global context where knowledge and innovation are vital to competitive advantage. The result of the research is a set of practical analytical tools that regional leaders can use to assess their workforce, human capital and capacity to innovate within their region. The project is the first of its breadth and depth. But this report does more than provide tools to evaluate “where we are.” The project also has a strategic component. It presents a framework for regional leaders to collaborate to achieve mutual regional development goals. Using the results of the analytical tools, the framework helps guide the discussions of regional leaders in selecting sound strategies and in identifying the united efforts required to achieve common goals.
Globalization has profoundly changed how the most successful local leaders and economic development practitioners think about economic development:
1. Scale has changed, shifting from a local to a regional development policy level:
Metropolitan and rural areas alike now act regionally to compete globally. Individual localities collaborate as regions to gain the size or clout to compete. This may mean overcoming a history of localized competition and even distrust. Successful local leaders reach beyond their parochial interests to link assets and competitive advantages throughout their broader region. Indeed, many of today’s best economic opportunities emerge only at the scale of the broader region.
2. Economic development success is nolonger achieved primarily through traditional industrial recruitment
In a global economy, trying to compete based on cost alone will have limited success. Rather than emphasizing incentives, subsudues and low-cost, low-skill labour, the new race is won by regions with the capacity to innovate and with the brainpower – education and skills – needed to create and sustain a competitive advantage over the long run. Successful regions build on thier own unique qualities and advantages.
Local leaders and economic development practitioners who adapt to the new economic world will:
1. Adopt a whole new approach to economic development;
2. Effectively use an improved set of tools to craft a regional strategy;
3. Set sound investment priorities that put a practical regional strategy into action quickly.
Regional Collaboration
A basic premise of this report is that data, tools and analysis are essential, but not enough. Regional development requires public and private leaders who collaborate, who share a strategic vision and who build enduring partnerships to achieve that vision. To be truely useful, analytical tools should facilitate a dialogue. The tools should be integrated into the process of building trust among regional leaders.
In regional collaboration, the process is the product.
This process may not be smooth at first, but with time, energy and dedication, a thriving community of economic development leaders will emerge. Leaders must have the knowledge, tools, and desire to adjust their region’s direction to meet the challenges of the future.
Four tools
These tools may be especially helpful to practitioners who do not have the luxury of a sizeable staff of economic development analysts, planners and other professionals. The four tools are:
Industry Clusters are regional groups of businesses that are linked in the production process and may have similar needs for technology, infrastructure, support services and a shared pool of labor. This analysis shows how the regional economy is working and where the critical linkages are to maintain or build that economy.
Occupation Clusters are grouped according to similar knowledge and skill requirements. The occupation clusters are indispensible to link regional industries with workforce requirements, available human capital, education and training needs, and new directions.
An Innovation Index presents an overall picture of a region’s capacity to innovate and transform its economy. Like the industry and occupation cluster tools, this index helps assess a region’s competitive advantages and weaknesses, and gauges how adept the region may be in exploiting new and emerging industries.
A Regional Strategy and Investment Framework that uses the information gained from these three analytical tools to guide regional leaders toward a common regional vision, strategy and action. The process of developing a regional strategy will likely require several group discussions with a coach action as a catalyst and guide. Using a tool for prioritizing public investment, the coach would also guide leaders through the discipline of prioritizing investments that best align with the region’s development strategy.
Events
Innovation, Knowledge and Entrepreneurship: DRUID-DIME Academy Winter Conference
Aalborg, Denmark, 21-23 January, 2010
The conference is open for all PhD students working within the broad field of economics and management of innovation and organizational change. We invite papers aiming at enhancing our understanding of the dynamics of technological, structural and institutional change at the level of firms, industries, regions and nations. DRUID is the node for an open international network – new partners are always of interest (we of course encourage DRUID Academy PhD students and students connected to the ETIC PhD program to submit an abstract as well). Do not hesitate to apply even if you have not been in contact with DRUID previously.
Clusters in Europe II – Mobilizing Clusters of Competitiveness
Budapest, Hungary, 27-28 January, 2010
The conference will discuss the European cluster development practice and will give a worldwide overview, as well. The main objective of the conference is to share the different local challenges and responses of the national cluster policies regarding the economic crisis. In addition to the representatives of the European Commission, speakers from the following countries will share their experience: UK, Germany, Czech Republic, China, Greece, Japan, Russian Federation among others.
Cultural Mapping and Cultural Planning: Making the Connection 
Toronto, 2-3 March, 2010
Join cultural planning practitioners from across Ontario for an informative workshop on cultural planning and mapping. Presentations on Creative City Network of Canada’s cultural planning and mapping toolkits, panel discussions from those in the field and a facilitated discussion on what’s next will give you the knowledge and connections to move the cultural planning agenda forward in your community. This facilitated discussion will focus on potential policy links between cultural mapping and cultural planning. Knowledge generated from this session will be incorporated into Municipal Cultural Planning Incorporated’s forthcoming Municipal Cultural Mapping guidebook.
CALL FOR PAPERS – The Organization, Economics and Policy of Scientific Research
Torino, Italy, 23-24 April, 2010
The aim of the workshop is to bring together a small group of scholars interested in the analysis of the production and diffusion of scientific research from an economics, historical, organizational and policy perspective. The workshop does not have a narrow focus; it aims to include papers form the various streams of research developed in recent years in and around the area of public and private scientific research. To submit a contribution and for further information contact: Aldo Geuna (aldo.geuna@unito.it)
and Francesco Quatraro (brick@carloalberto.org).
Pecs, Hungary, 24-26 May, 2010
An increasingly complex array of actors is involved in today‟s regional development agendas. They range from private firms and labour organizations to government and non-government institutions. Despite the growing awareness in the public and academic domains of the multi-actor nature of regional development, we still often struggle to fully comprehend the mutually interactive strategies and practices which cut across regions and countries. In light of recent upheavals in the global economic and financial system, such an understanding will be critical to future studies of regional development. Indeed this interest in actors, institutions and organizations in regional development needs to be properly grounded in the wider contexts of global change in economic imperatives, transnational working and cooperation and environmental concerns. To some regions, these contexts provide favourable and timely frameworks for action and initiatives. Other regions may find these contexts increasingly challenging and threatening. Taken together, understanding better these broader contexts can provide important insights into regional development potential, planning and practices and establish the agenda for research and policy. We welcome papers from all – academics, students and those working in policy and practice. The event is inclusive and offers major networking opportunities for scholars in our field.
Opening Up Innovation: Strategy, Organization and Innovation
London, 16-18 June, 2010
The DRUID Summer Conference 2010 intends to explore new theoretical, empirical and methodological advances in industrial dynamics, contributing novel insights and stimulating a lively debate about how economic systems and organizations evolve. The conference will include an exciting programme of plenary debates where internationally leading scholars take stands on contemporary issues within the overall conference theme. Both senior and junior scholars are invited to participate and contribute to the conference with a paper.
Aalborg, Denmark, 21-24 June, 2010
Schumpeter 2010 serves as an opportunity for both established scholars and young researchers to present research that has a Schumpeterian perspective. The major topic of the conference is “Innovation, Organisation, Sustainability and Crises”. But the conference more generally embraces micro-studies of the innovation, routine and selection as well as studies of the macro-problems of Schumpeterian growth and development as a process of “creative destruction”. The broad range of issues implies that both economists, business economists, and other social scientists can contribute to the conference and that evidence may be provided by statistical and historical methods as well as other methods.
Madrid, Spain, 20-22 Oct, 2010
Innovation is understood as a resultant of a complex and dynamic process related to interactions between University, Industry and Government, in a spiral of endless transitions. The Triple Helix approach, developed by Henry Etzkowitz and Loet Leydesdorff, is based on the perspective of University as a leader of the relationship with Industry and Government, to generate new knowledge, innovation and economic development. The main theme of our conference is “Triple Helix in the Development of Cities of Knowledge, Expanding Communities and Connecting Regions”. Submissions on Triple Helix related topics are encouraged and shall focus on the following subthemes: S1 Economic growth and social development in knowledge-based cities and connecting regions: challenge and future; S2 Triple Helix study; S3 Triple Helix in action: unlocking economic and social crises; S4 University in regional innovation and social development; S5 Government and public policy in the Triple Helix era; S6 Enterprises and industrial development in a knowledge-based city or region.
Subscriptions & Comments
Please forward this newsletter to anyone you think will find it of value. We look forward to collaborating with you on this initiative. If you would like to comment on, or contribute to, the content, subscribe or unsubscribe, please contact us at ipl.munkschool@utoronto.ca.
This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.