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
Government of Canada Helps Science and Engineering Graduates Enter the Workforce
An investment by the Government of Canada will give young researchers in universities across the country an opportunity to expand their skills and help them transition from trainees to productive employees in the Canadian workforce.The projects are being funded through the Natural Sciences and Engineering Research Council of Canada (NSERC)’s Collaborative Research and Training Experience (CREATE) Program. Eighteen projects will receive a total of $29.6 million over six years to help science and engineering graduates add job skills to their academic expertise. The projects explore a variety of research areas, including neurotechnology, clean energy, freshwater conservation and bionanotechnology.
Governments Invest in Technology Advancements in Saskatchewan
Recently the Minister of State for Western Economic Diversification Canada, the Ministry of Advanced Education, Employment and Immigration, the University of Saskatchewan and Canadian Light Source annouced an investment of $3.1 million dollars towards two innovative projects in Saskatchewan’s science and technology sector.
New Governors Look to Regional Economic Development to Boost Job Creation
Many of America’s 37 new governors elected last November came into office with bold proposals to create jobs in the sluggish economy by developing regional plans. New York’s recently enacted budget provides $130 million in funding and $70 million in tax credits to establish 10 regional economic development councils expected to debut this month. The councils will compete for the funds and prioritize economic development projects in their respective regions. Meanwhile, the re-vamped Michigan Economic Development Corporation plans to distribute a portion of its funds directly to the state’s SmartZone network — 15 regional economic development organizations that focus on helping entrepreneurs. Other initiatives were proposed in Tenessee, Virginia, Colorado and Ohio.
Editor's Pick
Canada’s Innovation Imperative
Institute for Competitiveness and Prosperity
Canada faces an innovation imperative. Its lackluster innovation record stands in the way of all Canadians realizing their full prosperity potential. As new governments take the helms federally and in several provinces this year, the Institute for Competitiveness & Prosperity urges all Canadians to step up their innovation capabilities to achieve a long-term Prosperity Agenda. As the economy slowly recovers from the recession, policy makers need to do what is necessary to achieve a strong recovery in the short term and to begin repairing the fiscal situation federally and provincially. But a long-term challenge remains – raising productivity, which is synonymous with improving innovation capabilities and performance. Robust innovation results can be achieved through more key business investments and by the right government policies and strategies for innovation.
Manufacturing and the Economy
A couple of issues ago thte OREDI newsletter featured the ITIF paper “The Case for a National Manufacturing Strategy” as the Policy Digest. Since then the ITIF has compiled a list of reports released since 2009 calling for increased policy attention to the manufacturing sector. This special issue includes a selection of these reports and analysis.
A Framework for Revitalizing American Manufacturing
Executive Office of the President
America’s manufacturers are at the heart of thecountry’s economy, providing good-paying jobs for millions of American families. The U.S. manufacturing sector is today the world’s largest; indeed, by itself it would represent the 9th largest economy in the world. Nevertheless, manufacturing today faces enormous challenges. Manufacturing workers have paradoxically often been victims of their sector’s own success, as rapid productivity growth has meant that goods can be produced with fewer workers, contributing to a several decades-long trend of declining employment. Despite these challenges, many sectors of American manufacturing have the potential to enjoy significant growth and success. With the right policies, America can foster successful industries like biotechnology, wind power, nanotechnology, aerospace, next generation automobiles, and perhaps more importantly the industries of the future that we do not even know about today. Although the talent and hard work of America’s entrepreneurs, innovators, and workers will drive these businesses, there is a critical role for sound government policy. This report analyzes the cost drivers in each step of the manufacturing process and suggests a framework for designing appropriate government support in each of these areas.
Association for Manufacturing Technology (AMT)
A solid economic recovery has been slow to take hold, and that has been especially true in the manufacturing sector where credit remains tight and uncertainty over the future has prevented companies from retooling, diversifying, and investing in R&D. AMT believes its national manufacturing mandate is necessary to cement this recovery and create a strong foundation for sustained economic growth. It is possible for the government, industry, and academic communities to work together, using an infrastructure already in place, to revitalize the manufacturing sector and promote real economic growth.
White Paper on Advanced Manufacturing Questions
IDA Science and Technology Policy Institute
This set of white papers was prepared at the request of the Office of Science and Technology Policy as input for the Advanced Manufacturing Workshop of the President’s Council of Advisors on Science and Technology Study on Creating New Industries Through Science, Technology and Innovation. These papers are meant to present issues, stimulate thought and frame discussion. This paper defines advanced manufacturing and addresses ten key questions about the future of the industry.
Rationales and Mechanisms for Revitalizing U.S. Manufacturing R&D Strategies
Gregory Tassey
The race to economic superiority is increasingly occurring on a global scale. Competitors from different countries are employing new types of growth strategies in attempts to win that race. The United States cannot, therefore, continue to rely on outdated economic growth strategies, which include an inability to understand the complexity of the typical industrial technology and the synergies among tiers in high-tech supply chains. In this context, a detailed rationale is provided for maintaining a viable domestic technologybased manufacturing capability. In the United States, the still dominant neoclassical economic philosophy is at best ambivalent on the issue of whether a technology-based economy should attempt to remain competitive in manufacturing or let this sector continue to offshore in response to trends in comparative advantage, as revealed through shifts in relative prices. The paper argues that the neoclassical view is inaccurate and that a new innovation model is required to guide economic growth policy. Specifically, the paper provides (1) a rationale for why an advanced economy such as the United States needs a manufacturing sector; (2) examples of the process of deterioration of competitive positions for individual industries and, more important, entire high-tech supply chains; (3) an explanation of the inadequacy of current economic models for rationalizing needed new policy strategies; and (4) a new economic framework for determining both policy mechanisms and targets for those mechanisms, with emphasis on the systems nature of modern technologies and the consequent requirement for public–private innovation ecosystems to develop and deliver these technologies. Several targets are suggested for major policy mechanisms.
Translating Innovation into U.S. Growth: An Advanced Manufacturing Perspective
James Manyika, Daniel Pacthod and Michael Park, McKinsey & Company
Is America losing its innovation edge? For decades, the country has debated this question in the halls of Washington, on the nightly news, and in corporate boardrooms. Pundits have looked abroad for signs—from the Soviets during the Cold War to the Japanese in the late 1980s to the Asian Tigers in the early 2000s—that the United States was losing its economic advantage. Pessimists point to startling statistics, such as the rise in the number of patents filed by foreign inventors or the growing corps of engineers graduating overseas. These statistics are indeed alarming. Yet despite the historical challenges, the United States has remained the home of innovation. From the Internet to mainframe servers to pharmaceuticals, major innovations are still “Made in the USA.” So what is the disconnect? The authors think that looking solely at innovation and leadership in basic research is far too narrow. The key question is whether the United States has been losing its ability to translate innovation into economic leadership.
Cities, Clusters & Regions
Educated Service Workers are Concentrated in Canadian Cities
Martin Prosperity Institute
Researchers at the Martin Prosperity Institute have asked three preliminary questions related to the education levels of various occupational groups: in what occupational class is an educated (BA or higher) individual most likely to work? How educated is each occupational class? And are educated workers evenly distributed geographically? Overall, they find the co-location of educated workers in major CMAs, where accounting for population effects, there are higher concentrations of educated workers. This concentration of educated workers in regional centres (or major CMAs) may have consequences for smaller/rural areas, which see the sorting of educated people out of these areas, resulting in ‘brain drain.’
Statistics & Indicators
Manufacturing and Logistics 2010 National Report
Conexus
The Manufacturing and Logistics 2010 National Report grades states in several areas of the economy that underlie the success of manufacturing and logistics. These specific measures include: manufacturing and logistics health; human capital; the cost of benefits; the global position and diversification of the industries; state level productivity and innovation; the tax climate; and venture capital activities.
Global Manufacturing Competitiveness Index 2010
Deloitte
This study provide unique insight inot the new state of 21st century manufacturing. Today, manufacturing spans ideas, products and services – well beyond the sole production of goods, as in the 20th century. The post-industrial manufacturing ecosystem represents a complex and highly integrated globalized value web. This web includes cutting-edge science and technology, innovation, talent, sustainable design, systems engineering, supply chain excellence and a wide range of smart services, as well as energy-efficient, sustainable and low-carbon manufacturing. The findings of this study confirm that the global competitive landscape for manufacturing is undergoing a transformational shift that will reshape the drivers of economic growth, wealth creation, national prosperity, and national security. Manufacturing is and will continue to be an essential path for attracting investments, spurring innovation, and creating high-value jobs. Developed and emerging nations are in heated competition to create the most compelling opportunities to innovation, build a highly-skilled workforce, and improve standards of living.
Policy Digest
Shifting into High Gear – JOBS: Promoting Growth in the Toronto Region and the Province
The Toronto Borad of Trade
The conundrum of the Toronto regions’ strong economic fundamentals, but not world-leading productivity, GDP and disposable income growth, is one that will confront the next Ontario government. Coming out of the global recession, the economy will be a key issue in the 2011 provincial election. But what is the ideal version of the Ontario economy in 5–10 years’ time that will lead to economic success and sustainable job creation? Where should efforts be focused to achieve this desired outcome? In this paper, the Toronto Board of Trade, informed by extensive consultation with and input from our members and stakeholders, sets out a number of necessary economic foundations, such as stronger regional coordination and an economic cluster strategy, to reach our goal of globally competitive job creation, economic growth and innovation.
Opportunities and the Core Compotents of Global Competitiveness
Regional economic growth will be fostered by:
1. Coordinating regional economic development among the many municipalities in the GTA, including united international investment promotion efforts.
Currently, economic development in the Toronto region is fragmented and ineffective. The GTA’s municipalities spend $25 million annually and employ about 160 people in at least 20 different organizations. This lack of coordination is wasteful and makes the region less attractive to global businesses and investors.
Benefits of regional economic coordination include:
• More attractive business environment;
• Stronger economic performance and attract greater investment;
• Efficient and effective use of tax dollars;
• More potent international presence — promote region with one voice;
• Less red tape for conducting business;
• Better infrastructure to support business operations.
2. Strengthening cluster strategies as part of a comprehensive economic development strategy that strengthens existing assets, networks and relationships, and promotes a more dynamic and innovative economy.
Economic cluster strategies have been proven to increase GDP growth, job growth and productivity, foster innovation, increase income and exports and access to capital. Cluster strategies grow the industries that compete in global markets, bring wealth into the region and create jobs and prosperity across the broader economy, by focusing on strengthening their assets, networks and inputs. Cluster strategies typically:
• Focus on sectors with a clear competitive advantage;
• Get government to work collaboratively with the private-sector to identify and remove obstacles to global competitiveness.
Many jurisdictions are pursuing cluster strategies, including the three top ranking economic performers in the past two editions of the Scorecard on Prosperity — San Francisco, Boston and Seattle. Cluster strategies must be driven by private sector leadership, make use of data analysis tools to thoroughly study their sector’s challenges and opportunities and devise working groups comprised of sector members and experts to create strategies for economic growth.
3. Enhancing a pro-competitive business environment that enables private sector economic growth and attracts increased levels of investment.
Many factors shape a region’s attractiveness to businesses and investors. A regional economic development strategy, combined with a comprehensive cluster approach to economic development, must be underpinned by a competitive pro-business environment. Several factors that are of critical importance to the future competitiveness of the Toronto region:
- Access to Capital, Innovation and Commercialization: Ready access to capital to fund businesses from start-up to initial public offering (IPO) is a strong driver of a productive and innovative economy. One of the biggest challenges that the region’s start-up companies and entrepreneurs face is a lack of access to the venture capital they need to move their business and product to the next stage. In the absence of available capital, coupled with relatively weak Canadian intellectual property rights, many promising and innovative companies based in the Toronto region have been either unable to continue operations or sold to foreign companies;
- Tax Rates: Provincial tax reforms in the 2009 Budget are set to improve Ontario’s cost competitiveness. By 2020, these reforms are expected to have increased incomes by 10 per cent and add $47-billion in capital investment by Ontario companies. It is important to the Toronto region’s global competitiveness that these tax reforms are maintained or enhanced;
- Trade: Ontario’s economy depends on trade. The Toronto region has the largest market potential in North America and the fifth largest globally. Its has preferential trade agreements with the U.S. and Mexico and is currently negotiating free trade agreements with the European Union and India. It is imperative that Toronto region companies continue to leverage this diversity to build global networks and to gain access to lucrative markets for our innovative products and ideas;
- Energy: The cost and reliability of our energy supply has a significant impact on our business competitiveness. Businesses are concerned about the security and supply of energy into the Toronto downtown core. As a result of blackouts, aging infrastructure and rising prices it is important to focus on greater transparency in energy pricing, ongoing investment into rapidly ageing infrastructure and the creation of a long-term, integrated energy system plan outlining future prices, system costs and investments;
- Health and Wellness: Ontario’s health-care system has been a competitive advantage over the U.S., but as health-care spending consumes more of the provincial budget, as business spend more on health-care benefits and rising employee absenteeism, this advantage is eroded. A large part of the solution can be found in driving future health-care dollars towards more appropriate community-based resources, using technology to better coordinate access to health-care practitioners, and focusing on education to prevent chronic diseases in the first place. Taking these steps will not only help to bend down the health-care cost curve in the province, but will also advance the quality of health-care available to the region’s citizens;
- Infrastructure: The region’s infrastructure deficit is significant and is impeding the region’s ability to attract global business. This issue is the focus of the Board’s next Challenge Paper;
- Human Capital and Education: The most important asset of a competitive region is a highly educated workforce. A high quality education system attracts business investment. At the same time, the Toronto region need to do a better job of integrating skilled newcomers into the economy.
Events
Innovation, Strategy and Structure: Organizations, Institutions, Systems and Regions
Copenhagen, Denmark, 15-17 June, 2011
DRUID 2011 intends to map theoretical, empirical and methodological advances, contribute with novel insights and stimulate a lively debate about how technologies, economic systems and organizations evolve and co-evolve. The conference will include targeted plenary debates where internationally merited scholars take stands on contemporary issues within the overall conference theme.
Great Lakes – St. Lawrence Region Summit
Windsor, ON, 21-22 June, 2011
The Mowat Centre at the University of Toronto and the Brookings Institution Metropolitan Policy Program have convened this conference to discuss the future of the Great Lakes – St. Lawrence Region and help craft a collaborative vision for the region. This conference will identify opportunities for regional collaboration, including how governments can facilitate cross-border partnerships by improving governance, policy, or regulation. This is an opportunity for you to network with senior leaders from across the region and contribute to a vision for the region’s future prosperity and sustainability.
The Innovation Policy Sage 2006-2016
Washington, DC, 23 June, 2011
ITIF is celebrating its 5th anniversary this year. Whatever contributions ITIF has made in enhancing public awareness of innovation’s central role in our economic health and in shaping public policies to improve U.S. capacity to innovate and compete, we have just begun. Whether the U.S. can marshal its formidable resources and talent to prevail in today’s innovation-driven and competitive world remains an open question. Please join ITIF as we mark our 5th anniversary with a special policy forum on this question.
Regional Studies Association – Third Global Conference on Economic Geography
Seoul, Korea, 28 June – July 2, 2011
In the wake of the economic downturn of 2007-, the debate about the causes of the crisis and recession has focused upon the unbalanced nature of its economic models and geographies. Explanations have been concerned with the imbalances in international trade and currency flows, sectoral structures between especially financial and other services and manufacturing, the relative sizes and roles of the public and private sectors, the composition of demand between consumption and production as well as its domestic or external orientation, and its socially and spatially uneven geographies. Following this diagnosis of the problems, debate about recovery has focused upon the idea of ‘rebalancing’ as a means of rebuilding new economic models that somehow correct the problematic and disruptive imbalances that generated the crisis. ‘Rebalancing’ has become an international concern for high-income economies such as Australia, UK and Japan, middle-income economies such as Portugal and South Korea as well as emerging economies such as Brazil and China. Yet it is not clear what ‘rebalancing’ might mean, whether and how it can be achieved and how it relates to currently dominant ‘new economic geographical’ models promoting greater spatial agglomeration and concentration of economic activities. These sessions will engage this debate on rebalancing regional and national economies.
Experience the Creative Economy
Toronto, 21 June, 2011
Experience the Creative Economy is a unique conference which allows scholars new in their careers to experience notions of the creative economy in a small and focused setting. This conference will bring together up to 25 individuals with similar research interests to share their work, receive feedback, foster the development of effective research methods and to establish an ongoing framework of collaborative learning and mutual exchange for years to come.
Re-imaginging Place Leadership for the 21st Century – Your toolkit for effective
Birmingham, UK, 4-7 July, 2011
The program emerged from the 2010 European Commission ‘Open Days’ event ‘Re-thinking Leadership for 21st Century European Cities and Regions’ held in Brussels in October 2010. It also draws on the learning from the Regional Studies Association international research network “Leadership in Urban and Regional Development”. This introductory Summer School, the first in a series, presents and debates the changing leadership tasks associated with new and emerging issues around place-based policy agendas. This practice-orientated Leadership Summer School will enable participants from across Europe to explore effective leadership approaches for integrated policy and will develop leadership skills for collaborative working across economic development, planning, housing, regeneration, education, health, crime and security for neighbourhoods, towns, cities and regions.
CALL FOR PAPERS – Building Capacity for Scientific Innovation and Outcomes
Atlanta, GA, 15-17 September, 2011
The ability of science and innovation systems to deliver depends on continually improving capacity. Yet, capacity is multidimensional and has interrelated characteristics and related challenges. The Atlanta Conference on Science and Innovation Policy 2011 will explore the research base that addresses the broad range of capacity related issues central to the structure, function, performance and outcomes of the science and innovation enterprises. The conference will include a variety of sessions: plenaries to discuss critical questions, contributed paper sessions and a young researcher poster competition.
The Impact of the Global Economic Crisis on Capital Cities 
Warsaw, Poland, 23 September, 2011
Numerous studies and surveys from across Europe demonstrate that in ‘old EU’ the biggest cities are suffering the most from recession, while in new EU members and in Eastern Europe it is rural areas that suffer while cities and capital cities in particular are able to sustain their growth (or to minimise decline). Thus we are proposing to create a Regional Studies Association Research Network which will look at various cases of capital cities’ reactions in the wake of global economic crisis and will come up with the tentative summary of different trends and types of responses which would be useful for further regional socio-economic analysis.
Lund, Sweden, 13-14 October, 2011
The conference offers two days of plenaries, presentations and intense discussions on preconditions and strategies for regional innovation policy and regional development in Europe. It is organized around five key themes: (1) Preconditions for sustainable development (economically, socially and environmentally) in European regions: (2) the role of universities in the promotion of regional development; (3) sectoral specificities (resource based and cultural/creative industries) and their impacts on regional competitiveness; (4) Southern European regions and their strategies to grow out of the global economic crisis; (5) the growth of emerging economies in Asia and Latin America and consequences for European regions. Confirmed keynote speakers include Meric Gertler (University of Toronto), Claire Nauwelaers (OECD), Staffan Laestadius (Royal Institute of Technology KTH), Dominic Power (Uppsala University), Mario Rui Silva (University of Porto) and Cristina Chaminade (Lund University).
Culture, Place and Identity at the Heart of Regional Development
St, John’s, 13-15 October, 2011
This conference will examine the relationship between the arts, cultural heritage and regional development in islands and in rural and remote regions. It will bring together representatives from academia, government, the arts community, the cultural heritage community, the knowledge economy, the tourism industry, and organizations dealing with regional development. It will examine global trends in tourism, technology and demographics, and will feature global best practices in cultural tourism.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.